EMPLOYMENT AGREEMENT BETWEEN ASAHI TEC CORPORATION AND TIMOTHY LEULIETTE
Exhibit
10.1
EMPLOYMENT
AGREEMENT BETWEEN ASAHI TEC CORPORATION AND ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
This
Agreement is made by and between Asahi Tec Corporation, a Japanese corporation
(“Company”),
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (“Executive”),
effective as of the Effective Time (as defined in the Agreement and Plan of
Merger, dated as of August 31, 2006, among Company, Argon Acquisition Corp.
and
Metaldyne Corporation ("Metaldyne")
(the
“Merger
Agreement”))
(hereinafter, the “Effective
Date”).
This
Agreement replaces and supercedes the Employment Agreement between Metaldyne
and
Executive with an Effective Date of January 1, 2001, as amended
July 31, 2003, March 31, 2004, September 10, 2004, and
February 9, 2006 (as so amended, the “Original
Employment Agreement”).
In
order to induce Executive to be employed as described herein, Company enters
into this Agreement with Executive to set out the terms and conditions that
will
apply to Executive’s employment. 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
and Directorship. (a)
Company
agrees to (i) employ Executive, and shall appoint Executive, as its Co-Chairman
and Co-Chief Executive Officer (for clarification, such position shall be
shikko-yaku
(executive officer) under the Japanese Corporation Act), (ii) cause Metaldyne
to
continue to employ Executive as President and Chief Executive Officer of
Metaldyne and (iii) appoint Executive as a director of Company, subject to
shareholder approval. In his capacity as Co-Chairman of Company, Executive
shall
be primarily responsible for establishing, together with the Board of Directors
of Company (the "Board"),
strategies, business goals and other long-term plans for the business and
operations of Company and its subsidiaries (including Metaldyne) and such other
duties commensurate with his position as directed from time to time by the
Board, except that the other Co-Chairman of Company shall be primarily
responsible for matters relating to technology and research and development
and
shall participate in matters relating to sales efforts on key global accounts.
In his capacity as Co-Chief Executive Officer of Company and as President and
Chief Executive Officer of Metaldyne, Executive shall be responsible for the
day-to-day management and operations of Metaldyne and its subsidiaries and
their
businesses and such other duties commensurate with his position as directed
from
time to time by the Board. In each capacity, Executive shall report to the
Board. 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, subject at all times to review and control
of
the Board; provided
that
Company hereby acknowledges that Executive will enter into an agreement with
RHJ
International, S.A. or one of its affiliates ("RHJI")
to
provide services to RHJI as an industrial partner and Company agrees that
Executive shall be permitted under this Agreement to provide such services
to
RHJI and that the provision of such services shall not constitute Cause (as
defined below) or violate any provision of this Agreement. During the Term
of
Employment (as defined below), Executive also agrees to serve, if elected,
as an
officer or director, or both, of Company or any subsidiary, limited liability
company or other
business
entity of which Company or Metaldyne holds at least a fifty percent (50%)
ownership interest, without the payment of any additional compensation therefor,
provided
that if
Executive serves as an officer or director of Company or any such subsidiary,
limited liability company or other business entity, Executive shall be entitled
to the same director and officer liability protections as the other officers
or
directors, as applicable, of Company or such subsidiary, limited liability
company or other business entity.
(b)
Nothing
in this Agreement shall preclude Executive from engaging in charitable and
community affairs, from 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) made by him in publicly
traded equity securities or other property (provided that no such investment
may
exceed five percent (5%) of the equity of any entity, without the prior approval
of the Board) or from serving, subject to the prior approval of the Board,
as a
member of boards of directors or as a trustee of any other corporation,
association or entity, to the extent that any of the above activities do not
conflict with any provision of this Agreement.
(c)
During
the Term of Employment, Executive's principal place of employment shall be
at
such location or locations as determined from time to time by agreement of
the
Board and Executive, consistent with the needs of Company and Metaldyne and
as
required in connection with the performance of Executive's duties and
responsibilities hereunder; provided
that
Executive may be required to spend up to 50% of his business time in Japan
as
required in connection with the performance of his duties and responsibilities;
provided,
however,
that
Executive shall not be required to establish a permanent residence in Japan.
Executive acknowledges that his duties and responsibilities hereunder shall
require him to travel on business, including to Japan, to the extent necessary
to perform such duties and responsibilities.
(d)
Effective
as of the Effective Time, this Agreement shall become effective and the parties
hereto shall be bound hereby and the Original Employment Agreement shall
terminate and have no further force or effect. Without limiting the generality
of the foregoing, Executive shall not be entitled to, and Company and Metaldyne
shall have no obligation to provide, any payments, benefits, gross-ups or other
entitlements pursuant to Sections 6(d) or 8 of the Original Employment
Agreement.
(e)
For
the
avoidance of doubt, Executive acknowledges and agrees that, during the Term
of
Employment, he is not an “employee” of Company for purposes of the Labor
Standard Law of Japan and as such he does not have the rights of an “employee”
for purposes of the Labor Standard Law of Japan.
SECTION
2. Term
of Employment.
The term
of Executive's employment under this Agreement (“Term
of Employment”)
shall
commence on the Effective Date and, subject to the terms hereof, shall terminate
on the earlier of the fifth anniversary of the Effective Date (“Initial
Period”)
and
the date that either party terminates Executive’s employment under this
Agreement; provided
that the
Term of Employment shall automatically renew on the fifth anniversary of the
Effective Date and on each
2
subsequent
anniversary thereof for one year (“Renewal
Period”),
unless either party terminates Executive's employment or Company delivers to
Executive or Executive delivers to Company written notice at least 180 days
in
advance of the expiration of the Initial Period or any Renewal Period that
the
Term of Employment shall not be extended, in which case the Term of Employment
shall end at the end of the Initial Period or the Renewal Period in which such
notice was delivered and shall not be further extended except by written
agreement of Company and Executive. The expiration of the Term of Employment
under this Agreement shall not be a termination of this Agreement to the extent
that other provisions of this Agreement by their terms survive the Term of
Employment. At the expiration of the Term of Employment, Executive shall resign
from all employment and director positions with Company, Metaldyne and their
subsidiaries and affiliates, unless otherwise requested by Company.
SECTION
3. Compensation.
(a)
Salary.
As of
the Effective Date, Company shall pay Executive, for all services rendered
hereunder, at the rate of One Million Five Hundred Thousand Dollars ($1,500,000)
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.
(b)
Metaldyne
Annual Value Creation Plan (“AVCP”).
During
the Term of Employment, Executive shall continue to 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. For purposes of the 2006 AVCP, Executive’s award shall be subject to the
terms of any communication previously provided by Metaldyne to Executive
regarding Executive’s participation in the AVCP. For purposes of the AVCP for
Company’s subsequent fiscal years, Executive’s target bonus opportunity shall be
100% of Base Salary, which shall be payable based on achievement of a
consolidated business plan that reflects both Company’s and Metaldyne’s
performance, subject to such other terms and conditions as the Board may
establish from time to time.
(c)
Special
Bonus.
On the
Effective Date, Company shall pay Executive a one-time bonus consisting of
(i)
$2,000,000 in cash and (ii) a number of fully vested shares of common stock
of
Company with an aggregate value of $2,000,000, based on the Purchase Price
(as
defined in the Parent Stock Purchase Agreement (as defined in the Merger
Agreement)). Executive shall be responsible for the payment of all taxes
required to be deducted or withheld or otherwise paid with respect to such
bonus.
SECTION
4. Employee
Benefits.
(a)
Employee
Retirement Benefit Programs, Welfare Benefit Programs, Plans and
Practices.
Company
and Metaldyne shall provide Executive with retirement and welfare benefits
that
are commensurate with the benefits that are provided on the date of this
agreement.
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(b)
Vacation.
During
the Term of Employment, 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 and Metaldyne's general policies regarding vacation days,
as such policies may be modified from time to time.
(c)
Perquisites.
During
Metaldyne’s 2006 fiscal year and, subject to review and approval by the
Compensation Committee of the Board (the “Compensation
Committee”),
during the remainder of the Term of Employment, Company or Metaldyne shall
provide Executive (i) the annual costs of a country club membership in the
Detroit area; (ii) tax preparation and financial planning assistance; (iii)
an
annual physical examination; (iv) participation in Metaldyne’s Executive Vehicle
Program, as such program exists on the date of this Agreement; (v) use of a
corporate chartered aircraft; (vi) life insurance coverage equal to two and
one-half (2-1/2) times Base Salary; and (vii) long-term disability insurance
coverage. Executive acknowledges that some portion of his benefits or his
personal use of perquisites will represent additional personal income to him
and
will be reported to him as such.
(d)
Stock
Options.
All
stock options with respect to Metaldyne stock that Executive holds as of the
Effective Date shall be treated in the manner provided in the Merger Agreement;
provided
that
Executive acknowledges and agrees that (i) each of his Metaldyne Options will,
in accordance with the Merger Agreement and the terms of the 2001 Long Term
Equity Incentive Plan, be converted on the Effective Date into a right to
receive the excess, if any, of the Common Merger Consideration (as defined
in
the Merger Agreement) over the exercise price per share of Metaldyne common
stock subject to such Metaldyne Option, and (ii) both before and after the
adjustment of the exercise price of each of his Metaldyne Options to reflect
the
decrease in the fair market value of Metaldyne common stock as a result of
the
distribution of all the TriMas shares held by Metaldyne to its shareholders,
as
provided for in the Merger Agreement, the excess referred to in clause 4(d)(i)
will be $0. Accordingly, Executive agrees that, contingent on the Closing (as
defined in the Merger Agreement) and effective on the Effective Date, each
of
his Metaldyne Options will be cancelled and Executive will not, at any time,
be
entitled to any payment in respect of, or arising out of, such cancellation
and
he will not otherwise have any right or claim relating in any way to, or arising
out of, any of his Metaldyne Options. In addition, on the Effective Date,
Executive shall be granted stock options with respect to Company common stock
in
an amount and subject to the terms set forth in the Merger Agreement and the
schedules thereto.
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SECTION
5. Expenses.
Subject
to prevailing Company policy or such guidelines as may be established by the
Board, Company will reimburse Executive for all reasonable expenses incurred
by
Executive in carrying out his duties.
SECTION
6. Termination
of Employment.
Executive’s employment during or after the Term of Employment shall be
terminable at will by either party at any time for any reason; provided
that any
termination of employment, whether by Company or Executive, shall apply to
Executive's employment with both Company and Metaldyne.
(a)
Termination
Without Cause or for Good Reason.
If Executive’s employment is terminated during the Term of Employment (i)
by Company for any reason other than Cause (as defined in Section 6(c) hereof),
Disability (as defined in Section 6(d) hereof) or death or (ii) by
Executive for Good Reason (as defined in Section 6(a)(ii) hereof) on or after
the first anniversary of the Effective Date, then, in each case, Company shall
pay Executive the Severance Package. A termination by Executive without Good
Reason, or with Good Reason prior to the first anniversary of the Effective
Date, shall be deemed to be a termination under Section 6(b) below and not
a
termination under this Section 6(a).
(i)
For
purposes of this Agreement, “Severance
Package”
shall
mean:
(A)
Base
Salary continuation for twenty-four (24) months (the “Severance
Period”)
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)
A
bonus
equal to two hundred percent (200%) of the target bonus opportunity under AVCP,
payable in equal installments over the Severance Period, subject to the same
withholding and reporting requirements described in Section 6(a)(i)(A). In
addition, Executive shall receive the bonus for the most recently completed
bonus term if a bonus has been earned and declared for such term but not paid,
which bonus shall be paid in accordance with customary practices for payment
of
bonuses under AVCP;
(C)
Continuation
of benefits under any life, group health, and dental insurance benefits
substantially similar to those which Executive was receiving immediately prior
to termination of employment until the earlier of:
(1)
the
end
of the Severance Period and
(2)
the
date
on which Executive becomes eligible to receive any benefits under any plan
or
program of any other employer.
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The
continuing coverage provided under this Section 6(a)(i)(C) is subject to
Executive’s eligibility to participate in such plans and all other terms and
conditions of such plans, including Company’s and Metaldyne's ability to modify
or terminate such plans or coverages. Company may satisfy this obligation in
whole or in part by paying the premium otherwise payable by Executive for
continuing coverage under Section 601 et seq. of the Employee Retirement Income
Security Act of 1974, as it may be amended or replaced from time to time, or
under any similar provision of non-United States law. If Executive is not
eligible for continued coverage under one of the benefit plans noted in this
paragraph (C) that he was participating in during his employment, Company shall
pay Executive the cash equivalent of the insurance cost for the duration of
the
applicable period at the rate of Company’s or Metaldyne's cost of coverage for
Executive’s benefits as of the date of termination. Any obligation to pay the
cash equivalent of such cost under this item may be settled, at Company’s
discretion, by a lump-sum payment of any remaining premiums; and
(D)
If
Executive’s employment is terminated under this subsection, Company shall pay to
Executive a lump sum in the amount of his account under the ▇▇▇▇▇▇▇ Industries
Deferred Compensation Plan, or any successor plan to that plan, whether vested
or unvested, reduced by the amount of any benefits paid or payable to Executive
out of such plan on account of such termination.
(ii)
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)
Removal
from the position of Co-Chairman or Co-Chief Executive Officer of Company or
President or Chief Executive Officer of Metaldyne (other than as a result of
a
promotion or a change in position which is not material);
(B)
Any
material and permanent diminution in Executive’s duties or responsibilities
hereunder as set forth in Section 1(a);
(C)
A
material reduction in the aggregate value of Base Salary or bonus opportunity
or
a material and permanent reduction in the aggregate value of other benefits
provided to Executive by Company and Metaldyne; or
(D)
A
permanent reassignment of Executive, without his advance written consent, to
another primary office, or a relocation of the office that is Executive’s
primary office as of the Effective Date, unless Executive’s primary office
following such reassignment or relocation is within a thirty-
6
five
(35)
mile radius of Executive’s primary office before the reassignment or relocation
or Executive’s permanent residence on the date of the reassignment or
relocation; provided
that no
such reassignment or relocation shall be deemed to have occurred as a result
of
Executive's travel to and from, or provision of services in, Japan in accordance
with Section 1(c).
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; Nonrenewal of Agreement.
If
Executive terminates his employment with Company without Good Reason during
or
after the Term of Employment (or with Good Reason prior to the first anniversary
of the Effective Date), or if the Term of Employment expires following notice
of
nonrenewal by either party under Section 2, 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 earned
and
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
or
Metaldyne in which Executive is participating at the time of Executive’s
termination of employment shall be paid, distributed or settled, or shall
expire, in each case in accordance with their terms, and Company and Metaldyne
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:
(i)
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, a crime under
Japanese law with respect to which imprisonment is the
7
minimum
prescribed penalty or any similar crime in any other jurisdiction in which
Company or Metaldyne conducts business;
(ii)
Executive’s
willful misconduct in the performance of his duties hereunder;
(iii)
Executive’s
willful and continued failure to follow the reasonable and lawful instructions
of the Board; or
(iv)
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 (iii) or (iv) 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)
Disability.
In the
event that Executive is unable to perform his duties during the Term of
Employment on account of a disability which continues for one hundred eighty
(180) consecutive days or more, or for an aggregate of one hundred eighty (180)
days in any period of twelve (12) months, Company may, in its discretion,
terminate Executive’s employment hereunder. Company’s obligation to make
payments under this Agreement shall, except for earned but unpaid Base Salary
and earned and declared but unpaid AVCP awards and the payment described in
the
next sentence, cease on the first to occur of (i) the date that is six (6)
months after such termination or (ii) the date Executive becomes entitled to
benefits under a long-term disability program of Company or Metaldyne. If
Executive’s employment is terminated under this subsection, Company shall pay to
Executive a lump sum in the amount of his account under the ▇▇▇▇▇▇▇ Industries
Deferred Compensation Plan, or any successor plan to that plan, whether vested
or unvested, reduced by the amount of any benefits paid or payable to Executive
out of such plan on account of such termination. For purposes of this Agreement,
“Disability”
shall
be defined by the terms of Metaldyne’s long-term disability policy, or, in the
absence of such policy, as a physical or mental disability that prevents
Executive from performing substantially all of his duties under this Agreement
and which is expected to be permanent. Company may only terminate Executive
on
account of Disability after giving due consideration to whether reasonable
accommodations can be made under which Executive is able to fulfill his duties
under this Agreement. The commencement date and expected duration of any
physical or mental condition that prevents Executive from performing his duties
hereunder shall be determined by a medical doctor selected by Company. Company
may, in its discretion, require written confirmation from a physician of
Disability during any extended absence.
(e)
Death.
In the
event of Executive’s death during the Term of Employment, all obligations of
Company to make any further payments, other than an
8
obligation
to pay any accrued but unpaid Base Salary to the date of death and any earned
and declared but unpaid bonuses under AVCP to the date of death and the payment
described in the next sentence, shall terminate upon Executive’s death. If
Executive’s employment is terminated under this subsection, Company shall pay to
Executive a lump sum in the amount of his account under the ▇▇▇▇▇▇▇ Industries
Deferred Compensation Plan, or any successor plan to that plan, whether vested
or unvested, reduced by the amount of any benefits paid or payable to Executive
out of such plan on account of such termination.
(f)
No
Duplication of Benefits.
Notwithstanding any provision of this Agreement to the contrary, if Executive’s
employment is terminated for any reason, in no event shall Executive be eligible
for payments under more than one subsection of this Section 6.
(g)
Payments
Not Compensation.
Any
participation by Executive in, and any terminating distributions and vested
rights under, retirement or savings plans, regardless of whether such plans
are
qualified or nonqualified for tax purposes, shall be governed by the terms
of
those respective plans. For purposes of determining benefits and the amounts
to
be paid to Executive under such plans, any salary continuation or severance
benefits other than salary or bonus accrued before termination shall not be
compensation for purposes of accruing additional benefits under such
plans.
(h)
Executive’s
Duty to Provide Materials.
Upon the
termination of Executive’s employment for any reason, Executive or his estate
shall surrender to Company all correspondence, letters, files, contracts,
mailing lists, customer lists, advertising material, ledgers, supplies,
equipment, checks and all other materials and records of any kind that are
the
property of Company or any of its subsidiaries or affiliates, that may be in
Executive’s possession or under his control, including all copies of any of the
foregoing.
SECTION
7. Notices.
All
notices or communications hereunder shall be in writing, addressed as
follows:
|
To
Company:
|
Asahi
Tec Corporations
▇▇▇-▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇
Fax:
▇▇-▇▇▇-▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
with
a copy to:
|
▇▇▇▇▇▇▇▇
Mori & Tomotsune
Izumi
▇▇▇▇▇▇ ▇▇▇▇▇
▇-▇-▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇,
▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇
Fax:
(▇▇) ▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
|
9
|
To
Executive:
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
[omitted]
|
Any
such
notice or communication shall be delivered by hand or by courier or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a
notice duly delivered as described above), and the third (3rd) business day
after the actual date of mailing shall constitute the time at which notice
was
given.
SECTION
8. Separability;
Legal Fees.
If any
provision of this Agreement shall be declared to be invalid or unenforceable,
in
whole or in part, such invalidity or unenforceability shall not affect the
remaining provisions hereof which shall remain in full force and effect. In
the
event of a dispute by Company, Executive or others as to the validity or
enforceability of, or liability under, any provision of this Agreement, Company
shall reimburse Executive for all reasonable legal fees and expenses incurred
by
him in connection with such dispute if Executive substantially prevails in
the
dispute, but in all other cases Executive shall be responsible for such fees
and
expenses.
SECTION
9. Assignment
and Assumption.
This
contract shall be binding upon and inure to the benefit of the heirs and
representatives of Executive and the assigns and successors of Company, but
neither this Agreement nor any rights or obligations hereunder shall be
assignable or otherwise subject to hypothecation by Executive (except by will
or
by operation of the laws of intestate succession) or by Company, except that
Company may assign this Agreement to any successor (whether by merger, purchase
or otherwise) to all or substantially all of the stock, assets or business
of
Company.
SECTION
10. Amendment.
This
Agreement may only be amended by written agreement of the parties
hereto.
SECTION
11. Non-Competition;
Non-Solicitation; Confidentiality. (a)
Executive
represents that acceptance of employment under this Agreement and performance
under this Agreement are not in violation of any restrictions or covenants
under
the terms of any other agreements to which Executive is a party.
(b)
Executive
acknowledges and recognizes the highly competitive nature of the business of
Company and accordingly agrees that, in consideration of this Agreement, the
rights conferred hereunder, and any payment hereunder, Executive shall not
engage, either directly or indirectly, as a principal for Executive’s 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 as an employee, officer, director, agent, consultant or in any other
advisory capacity, (i) while employed by Company and for the 18-month period
following the termination of Executive’s employment for any reason
(“Non-Compete
Term”),
in
any business (other than Company, Metaldyne or their respective subsidiaries)
which designs, develops,
10
manufactures,
distributes, sells or markets the type of products or services sold, distributed
or provided by Company, Metaldyne or any of their respective subsidiaries during
the two (2) year period prior to the date of termination of Executive’s
employment (the “Business”)
or
(ii) while employed by Company and for the six-month period following the
termination of Executive’s employment for any reason, in any private equity firm
(the activities described in clauses (b)(i) and (ii), collectively,
“Competitive
Activities”),
it
being understood that the activities and business of a private equity firm
shall
be deemed to include, without limitation, researching, analyzing and evaluating
portfolio companies (including any such companies that Company, Metaldyne or
any
of their respective subsidiaries have previously evaluated for possible
investment by or on behalf of Company, Metaldyne or any of their respective
subsidiaries) with the intent to acquire, make an investment in and/or dispose
of such companies or assets thereof for the benefit of Executive or any other
person.
Nothing
herein shall prevent Executive from owning, directly or indirectly, not more
than five percent (5%) of the outstanding shares of, or any other equity
interest in, any entity engaged in Competitive Activities and listed or traded
on a national securities exchange or in an over-the-counter securities
market.
(c)
During
the Non-Compete Term, Executive shall not (i) directly or indirectly employ,
solicit or receive or accept the performance of services by, any active employee
of Company, Metaldyne or any of their respective subsidiaries who is employed
primarily in connection with the Business, except in connection with general,
non-targeted recruitment efforts such as advertisements and job listings, or
directly or indirectly induce any employee of Company, Metaldyne or any of
their
respective subsidiaries to leave Company, Metaldyne or any of their respective
subsidiaries, or assist in any of the foregoing, or (ii) solicit for any
business that is engaged in the Business any person who is a customer or former
customer of Company, Metaldyne or any of their respective subsidiaries, unless
such person shall have ceased to have been such a customer for a period of
at
least six (6) months.
(d)
Executive
shall not at any time (whether during or after his employment with Company)
disclose or use for Executive’s own benefit or purposes or the benefit or
purposes of any other person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise other than
Company, Metaldyne or any of their respective subsidiaries, any trade secrets,
information, data or other confidential information of Company, Metaldyne or
any
of their respective Subsidiaries, including but not limited to information
relating to customers, development programs, costs, marketing, trading,
investment, sales activities, promotion, credit and financial data, financing
methods, plans or the business and affairs of Company, Metaldyne or any of
their
respective subsidiaries generally, unless required to do so by applicable law
or
court order, subpoena or decree or otherwise required by law, with reasonable
evidence of such determination promptly provided to Company. The preceding
sentence of this paragraph (d) shall not apply to information which is not
unique to Company, Metaldyne or any of their respective subsidiaries or which
is
generally known to the industry or the public other than as a result of
Executive’s breach of this covenant. Executive agrees that upon termination of
employment with Company
11
for
any
reason, Executive will return to Company immediately all memoranda, books,
papers, plans, information, letters and other data, and all copies thereof
or
therefrom, in any way relating to the business of Company, Metaldyne or any
of
their respective subsidiaries, except that Executive may retain personal notes,
notebooks and diaries. Executive further agrees that Executive will not retain
or use for Executive’s account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of Company, Metaldyne or any of their respective subsidiaries.
(e)
It
is
expressly understood and agreed that although Executive and Company consider
the
restrictions contained in this Section 11 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or
territory or any other restriction contained in this Agreement is an
unenforceable restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as to such
maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any
tribunal of competent jurisdiction finds that any restriction contained in
this
Agreement is unenforceable, and such restriction cannot be amended so as to
make
it enforceable, such finding shall not affect the enforceability of any of
the
other restrictions contained herein.
(f)
As
a
condition to the receipt of any benefits described in this Agreement, Executive
shall be required to execute an agreement pursuant to which Executive releases
any claims he may have against Company, Metaldyne or any of their respective
subsidiaries and agrees to the continuing enforceability of the restrictive
covenants of this Agreement.
(g)
This
Section 11 will survive the termination of the Term of Employment and the
termination of this Agreement.
SECTION
12. Remedies.
Executive acknowledges and agrees that Company’s remedies at law for a breach or
threatened breach of any of the provisions of Section 11 would be inadequate
and, in recognition of this fact, Executive agrees that, in the event of such
a
breach or threatened breach, in addition to any remedies at law, Executive
shall
forfeit all payments otherwise due under this Agreement and shall return any
Severance Package payment made. Moreover, Company, without posting any bond,
shall be entitled to seek equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.
SECTION
13. Survivorship.
The
respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations. The provisions of this Section
13
are in addition to the survivorship provisions of any other section of this
Agreement.
SECTION
14. Governing
Law; Revenue and Jurisdiction.
If any
judicial or administrative proceeding or claim relating to or pertaining to
this
Agreement is
12
initiated
by either party hereto, such proceeding or claim shall and must be filed in
a
state or federal court located in ▇▇▇▇▇ County, Michigan and such proceeding
or
claim shall be governed by and construed under Michigan law, without regard
to
conflict of law and principals.
SECTION
15. Dispute
Resolution.
Except
with respect to enforcement actions brought under Section 12, any dispute
related to or arising under this Agreement shall be resolved in accordance
with
the Metaldyne Dispute Resolution Policy in effect at the time such dispute
arises. The Metaldyne Dispute Resolution Policy in effect at the time of this
Agreement is attached to this Agreement.
SECTION
16. Effect
on Prior Agreements.
This
Agreement contains the entire understanding between the parties hereto and
supersedes in all respects any prior or other agreement or understanding, both
written and oral, between Company, Metaldyne, any affiliate of Company or
Metaldyne, any predecessor of Company or Metaldyne or any affiliate of any
such
predecessor and Executive, including the Original Employment Agreement;
provided
that
this Agreement shall have no force or effect, and the Original Employment
Agreement shall remain in effect, unless and until the Effective Time occurs.
SECTION
17. Withholding.
Company
shall be entitled to withhold from payment any amount of withholding required
by
law.
SECTION
18. Section
Headings and Construction.
The
headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to “Section”
or “Sections” refer to the corresponding section or sections of this Agreement
unless otherwise specified. All words used in this Agreement will be construed
to be of such gender or number as circumstances require.
SECTION
19. Counterparts.
This
Agreement may be executed in one (1) or more counterparts, each of which will
be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same Agreement.
13
Intending
to be legally bound hereby, the parties have executed this Agreement on the
dates set forth next to their names below.
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August
31, 2006
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ASAHI
TEC CORPORATION,
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by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
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August
31, 2006
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▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇,
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by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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