Exhibit 10.1
January 13, 2009
CONFIDENTIAL
Mr. Grant H. Beard
Dear Grant:
The purpose of this letter
(“Agreement”) is to confirm our understanding and
agreements regarding your separation from employment with TriMas
Corporation (“Company” or “TriMas”).
For purposes of this Agreement, TriMas or Company includes all of
its subsidiaries and affiliates.
1.
Employment and Severance
Benefits
Your employment with TriMas will end on
January 13, 2009 (the “Termination Date”), and the
termination of your employment is intended to constitute a
“separation from service” as defined under Internal
Revenue Code Section 409A and Treasury regulations issued
under that section (collectively
“Section 409A”). Effective as of the
Termination Date, TriMas will discontinue your compensation and
benefits, and you shall cease to accrue additional benefits under
any qualified or nonqualified retirement or incentive plans of the
Company.
In exchange for the agreements contained herein
and after this Agreement becomes binding, TriMas will, subject to
the six month delay and separation pay limitation described in
Paragraph 15 below, pay you the following severance benefits
(“Benefits”):
(a)
Base salary continuation for
twenty-four (24) months at your annual base salary rate in effect
on the Termination Date, subject to all applicable withholding and
reporting requirements. Payment of this benefit will commence
on the first regular payroll date following Termination Date and
will be paid in accordance with the Company’s usual payroll
practices.
(b)
An amount equal to one
(1) year’s bonus under the Annual Value Creation Plan
(“AVCP”) at your target level for 2009 of Eight Hundred
and Seventy-Five Thousand Dollars ($875,000) paid in equal
installments over the twenty-four (24) month period described in
Item (a) above, in accordance with the Company’s usual
payroll practices, subject to all applicable withholding and
reporting requirements. In addition, you will receive the
AVCP bonus payment for 2008 if such bonus is declared but not paid
before the Termination Date.
(c)
The amount of Thirty-One Thousand
One Hundred and Sixty-Four Dollars ($31,164), representing one
(1) year’s AVCP bonus at your target level for 2009,
prorated for the number of days that you were employed during
2009. The amount is calculated by multiplying the full year
target bonus by a fraction, the
numerator of which is the number of
days during 2009 that you were employed and the denominator of
which is 365. This amount will also be paid in equal
installments over the 24-month period described in Item
(a) above, in accordance with the Company’s usual
payroll practices, subject to all applicable withholding and
reporting requirements.
(d)
Executive level outplacement
services, as determined by the Company, will be provided to you by
an outplacement firm selected by the Company until the earlier of
the 12-month anniversary of the Termination Date or the date on
which you accept an offer of employment.
(e)
Provided that you timely elect to
continue health care coverage under COBRA and subject to the
Company’s COBRA policies, reimbursement of COBRA premiums to
the extent described below for medical benefits under Company group
benefits (including health, dental and prescription plans) as
defined by the plan documents, until the earliest of:
i.
the termination of the COBRA
period;
ii.
24-months following the Termination
Date; or
iii.
the date on which you become
eligible to receive any medical benefits under any plan or program
of any other employer.
You will be responsible for payment
of the COBRA premium and will be reimbursed monthly by the Company
for the portion of the premium that the Company would have paid if
you had continued to be an employee of the Company. If you do
not become eligible for medical benefits of another employer and
the COBRA period expires before 24 months have lapsed, during the
remaining portion of the 24-month period, the Company shall monthly
pay you an amount in cash equal to the amount that the Company
would have paid for your coverage if you had continued as an
employee of the Company.
(f)
The amount of Two Hundred and
Fifty-One Thousand One Hundred and Seventy-Eight and 59/100 Dollars
($251,178.59), adjusted for gains and losses from January 13,
2009 to the date of distribution, plus any contributions for the
fourth quarter of 2008 or for 2009 to the Termination Date to be
paid as full satisfaction of all your rights and benefits under the
Executive Retirement Program, subject to all applicable withholding
and reporting requirements; which amount shall be paid by the
Company to you in a lump sum on the first payroll date that occurs
on or after the date six (6) months and one (1) day
following your Termination Date.
(g)
The benefits to which you are
entitled under the defined benefits portion of the Benefits
Restoration Plan, to be paid in the form and at the time permitted
under the Benefits Restoration Plan. The net present value of such
benefit as of
2
December 31, 2008 is $24,684. A
payment of Sixteen Thousand Eight Hundred and Seventy-Eight Dollars
($16,878), adjusted for gains or losses in 2009, in accordance with
the terms of the Benefits Restoration Plan for partial years, which
amount shall be paid by the Company to you in a lump sum on the
first payroll date that occurs on or after the date six
(6) months and one (1) day following your Termination
Date. The payments under this provision shall be in full
satisfaction of all your rights under the TriMas Benefits
Restoration Plan and shall be subject to all applicable withholding
and reporting requirements.
(h)
It is agreed that on the Termination
Date, you will be vested in 16,082 of the restricted shares granted
to you under the 2006 Long Term Equity Incentive Plan. If the
applicable performance targets for 2008 were satisfied, you will
also vest on the Termination Date in a portion of the performance
units granted to you under the 2006 Long Term Equity Plan.
Your rights with respect to such restricted shares and units shall
be in accordance with the terms of the 2006 Long Term Equity
Plan. All other grants of restricted shares or performance
units by the Company under any plan have lapsed or will lapse as of
the Termination Date.
(i)
The amount of Twenty Five Thousand
Dollars ($25,000), which shall be paid on the next normal payroll
date following the Termination Date, as consideration for your
surrender, effective as of the Termination Date, of any and all
rights to stock options, whether vested or unvested, granted to you
under the 2002 Long-Term Equity Incentive Plan and all agreements
evidencing awards of such options; provided that this consideration
shall not be paid unless this Agreement is signed within the time
period set forth is Section 10(a) and is not revoked
under Section 10(b) below. If stock options are not
surrendered in accordance with this section, they will expire 90
days following the Termination Date. In addition, the Company
will pay you Five Thousand Six Hundred and Nine Dollars ($5,609)
for your accrued and unused vacation time for calendar year
2009. This payment will be made at the next normal payroll
date following the Termination Date, subject to all applicable
withholding and reporting requirements.
The amount, time and form of Benefits described
in this Paragraph 1 are subject to the terms and conditions set
forth in this Agreement, including adjustments described in
Paragraph 15 to the extent required to comply with
Section 409A.
2.
Resignation as Officer and
Director; Termination of Other Benefits . You agree to sign a written letter of
resignation as an officer and director in a form acceptable to the
Board. Your rights to any accrued and vested benefits under a
qualified retirement plan shall be determined in accordance with
the applicable plan document. Except as provided herein, you
will not receive any other payments or benefits and your right to
participate in or to receive any and all TriMas benefits will
terminate on the Termination Date. No amounts paid
under this Agreement shall constitute compensation for purposes of
any benefit plan. Notwithstanding the foregoing or anything
else in this Agreement to the contrary, that certain
Indemnification Agreement between
3
you and the Company, dated November 1,
2006, shall remain unmodified and in full force and
effect.
3.
Taxes . Any payments made by TriMas hereunder
are subject to applicable federal, state and local tax
withholding. You agree that you are exclusively liable for
the payment of any federal, state, local or other taxes that may be
due as a result of any benefits received by you as provided in this
Agreement.
4.
Confidentiality
. Upon the Termination Date,
you will return to TriMas all originals and copies of TriMas
documents and all TriMas property. You will continue to treat
as strictly confidential all Confidential Information. You
acknowledge that TriMas would be immediately and irreparably harmed
by an unauthorized disclosure of Confidential Information in such
manner and extent that it would be difficult or impossible to
ascertain with certainty the exact financial or economic
damages. For purposes of this Agreement, “Confidential
Information” includes, but is not limited to, information
(whether in tangible form or oral) relating to TriMas’
business, finances, customers, suppliers, property, employees,
technical information, concepts, ideas, trade secrets, plans,
formulas, drawings, designs, processes, procedures, inventions,
specifications, prototypes, samples, parts, data, and manufacturing
techniques.
5.
Non-Competition
. You accept the following
covenants restricting competition with the Company:
(a)
You acknowledge and recognize the
highly competitive nature of the business of Company and
accordingly agree that for the duration of the twenty-four (24)
month period following the Termination Date you shall not engage,
either directly or indirectly, as a principal for your own account
or jointly with others, or as a stockholder in any corporation or
joint stock association, or as a partner or member of a general or
limited liability entity, or
