EXHIBIT
10.15
CONFIDENTIAL
SEPARATION AGREEMENT AND RELEASE
THIS AGREEMENT is made
between Spartan Motors, Inc. (the "Employer"), as defined below and
Richard J. Schalter (the "Associate"). For the purposes of this
Agreement, the "Employer" shall include any and all predecessor
corporations or organizations, any and all successor corporations
or organizations, and any and all parent, subsidiary or related
organizations.
RECITALS
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A.
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On December 22, 2008 Employer's subsidiary Spartan Motors
Chassis, Inc. entered into a plea agreement (the "Plea Agreement")
and settlement agreement (the "Settlement Agreement") with the U.S.
Government settling criminal and civil charges related to making a
false statement.
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B.
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During Employer's investigation and defense of the charges
stated in Recital A. above, Employer, at its cost, provided
independent legal counsel for Associate, incurring fees of
approximately $1,500,000. By entering into this Agreement, Employer
intends to waive and forego any action seeking reimbursement from
Associate for certain legal fees as defined below in Section 4A, to
the extent they are otherwise recoverable under the law.
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C.
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Associate's employment with Employer ended effective
December 29, 2008. Wholly independent from this Agreement,
Associate resigned effective 29 December 2008. Regardless of
whether Associate decides to enter into this Agreement and/or
revoke the Agreement after signing it, Associate will no longer be
an active employee of Employer as of December 29, 2008. This
Agreement merely is intended to provide additional benefits to
Associate, should he decide to voluntarily enter into this
Agreement.
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D.
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The Employer and Associate desire to enter into this Agreement
in order to provide certain benefits
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to the Associate, as specified in this Agreement, to provide for
an orderly conclusion of employment, and to release and waive
potential claims against each other.
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The parties therefore agree as follows:
TERMS AND
SETTLEMENT
1.
Termination of Employment . The Associate's
employment with the Employer ended effective December 29,
2008. Associate will be paid his regular wages and benefits earned
from the Employer through the end of the payroll period in which
that day falls. Such consideration includes:
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a.
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Regular compensation
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b.
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Payment of $44,899.00, representing 50% of the Mandatory
Deferred Balance under the Employer's SPAR Management Incentive
Bonus Plan at the time provided in the Plan (including, if
applicable, the provision for the delay in payment to certain
"Specific Employees" under section 409(a)(2)(B)(i) of the Internal
Revenue Code of 1986, as amended).
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c.
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Accrued but unused vacation accrued as of December 29,
2008, and determined from Employer's records.
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d.
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Restricted stock, stock options and stock appreciation rights
(SARs) - Share-based awards previously granted to Associate
pursuant to the terms and conditions of Employer's equity
compensation plans.
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In consideration for the agreement of the parties as set forth
herein, the Associate hereby waives any and all rights to
reemployment with Employer and further waives any rights to any
other compensation, bonus, or payment relating to his employment
with Employer, other than those set forth in this Agreement.
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2. Release Payment
. As consideration for the promises and releases contained in
this Agreement, the Employer shall pay to the Associate the
following:
A.
$305,000 payable during calendar year 2009 in equal weekly
installments in accordance with Employer's normal payroll practices
less applicable income and employment tax withholding. The first
weekly
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installment shall be paid on
the first payroll date that is at least seven days after the
Associate executes and delivers this agreement to the Employer. The
first payment will be made retroactive to the payroll period
beginning 1 January 2009, and the last payment will be made
for the period ending 31 December 2009.
B.
In full satisfaction of any and all rights which Associate
may have under the Employer's SPAR Management Incentive Bonus Plan
("Plan"), the Employer shall pay to the Associate an amount equal
to the following:
Base Salary ($305,000.00) x Target Bonus Percentage (40%) x 2008
Spartan Chassis SPAR Multiple. "2008 Spartan Chassis SPAR Multiple"
shall mean the SPAR Multiple used to compute SPAR Annual Incentive
Bonuses for all other Spartan Chassis participants in the Plan. If
the 2008 Spartan Chassis SPAR Multiple exceeds 2.6, all incentive
in excess of 2.6 will be paid in the form of Spartan Motors stock.
The price of the stock that will be used to calculate the number of
shares is the market closing price on the date that the bonus is
paid. The cash and Spartan Motors stock payable under this
paragraph B shall be paid to the Associate on the sixth month
anniversary of his separation for service (as such term is defined
in section 409A of the Internal Revenue Code of 1986, as amended).
Such payment shall be made net of all applicable income and
employment tax withholding.
3.
Health Benefits . Employer-provided health
benefits for the Associate will be discontinued effective
December 31, 2008 in accordance with Employer policy. When
health benefits are discontinued, COBRA rights will be extended to
the Associate, as provided by law. The Employer will pay all
premiums on behalf of the Associate for COBRA continuation coverage
for up to 12 months or until Associate gains new employment.
4.
Legal Fees and Other Fees.
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A.
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Legal Fees in Connection with Government Charges . As
recited above, Employer incurred and paid for independent legal
counsel for Associate in connection with investigation and
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defense of the charges stated in Recital A. "Legal Fees" as
intended herein includes only legal fees incurred and paid in
connection with the investigation and defense of charges stated in
Recital A, but expressly excludes any legal fees incurred on behalf
of Associate by Associate's counsel between 1 December 2008
and 22 December 2008 and paid related to suspension and
debarment issues. For the avoidance of doubt, to the extent that
legal fees are incurred on behalf of Associate by Associate's
counsel between 1 December 2008 and 22 December 2008 and
paid related to suspension and debarment issues, such fees shall be
the responsibility of Associate. Effective on 22 December 2008
Employer shall cease to be responsible for Legal Fees on
Associate's behalf. Accordingly, Employer shall pay for all Legal
Fees incurred to such date and Associate shall pay for any Legal
Fees incurred after such date. Employer further waives and releases
all claims for reimbursement relating to the Legal Fees already
incurred. Except as provided in this Section 4(A), Employer agrees
to indemnify Associate as set forth in Article VII of Employer's
By-Laws.
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B.
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Other Fees . Employer also agrees to pay Associate $6,000
for legal and miscellaneous fees incurred in connection with the
review and Associate's obtaining advice regarding this
Agreement.
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5. Payments in Excess of
Pre-Existing Obligations . The parties agree that the
payments and benefits provided to the Associate under paragraphs 2,
and 3 of this Agreement, except as set forth below, are being paid
as consideration to support the promises and releases contained in
this Agreement. Such payments and benefits exceed any pre-existing
obligations of the Employer to the Associate (including, without
limitation, continued salary, benefits, or bonuses), and are not
being paid for services rendered or to be rendered by the Associate
to the Employer. The consideration being paid under paragraph 2B is
being paid as consideration to support the promises and releases
contained in this agreement with the exception of the promises
contained in paragraph 7. For the avoidance of doubt, the
consideration being paid under paragraph 2B is not conditioned
on
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Associate's compliance with
paragraph 7.
6.
Non-disparagement and Confidentiality .
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