EXHIBIT 10.2
DURA AUTOMOTIVE SYSTEMS, INC.
SECTION 16 OFFICER/SENIOR EXECUTIVE EMPLOYMENT TERM SHEET AGREEMENT
Dura Automotive Systems, Inc. (“Company”) hereby employs the individual(s) listed on the attached
Exhibit A (“Executive”) in the job positions listed in the same Exhibit, subject to the terms set
forth in this document, as well as all other documents referenced herein.
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Job Position: Executive’s employment with Company shall commence on the date
reflected next to his/her name in the attached Exhibit A. Executive shall be employed and
shall work in a full-time capacity in the job position reflected next to his/her name in
the attached Exhibit A. Except for the position of President & Chief Executive Officer,
all other Executives shall report to the Company’s President & Chief Executive Officer;
the Company’s President & Chief Executive Officer shall report directly to the Board of
Directors. Executive shall be based out of Company’s global headquarters office,
currently located in Rochester Hills, MI, unless otherwise agreed. Executive’s job duties
shall be similar to those of similarly-situated executives in public companies, including
but not limited to the duties of his/her immediate Dura predecessor, and as otherwise
directed from time to time by the Company’s President & Chief Executive Officer and/or
Board of Directors. Executive shall devote all of his/her time, attention, knowledge, and
skill solely and exclusively to the business and interests of the Company, and the Company
shall be entitled to all benefits and profits arising from or incident to any and all
work, services, and advice of Executive; provided, however, that Executive shall not be
precluded from devoting personal time to personal investments or from serving in outside
director and/or advisory positions, as long as such positions do not conflict with
Executive’s ability to fully perform his/her duties for the Company and as long as such
positions are approved in writing in advance by the Company’s Board of Directors. |
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Base Salary: Executive shall be paid a gross annual base salary of the
amount reflected next to his/her name in the attached Exhibit A, less customary and
statutory withholdings and deductions (“Base Salary”). The Base Salary shall be paid in
accordance with the Company’s normal payroll practices and cycles, and may be reviewed and
adjusted from time to time by the Company’s Board of Directors. |
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Sign-On Bonus: At the sole discretion of the Company’s Board of Directors,
Executive may be offered a one-time lump sum sign-on bonus in the gross amount reflected
next to his/her name in the attached Exhibit A; provided, however, that this sign-on bonus
is being paid as an advance and is not earned or accrued until Executive completes the
first twelve (12) calendar months of employment without his/her employment ending for any
reason (including Executive voluntarily resigning) other than the Company terminating
him/her without Cause (as Cause is later defined in this document), and if Executive’s
employment ends prior to the conclusion of this first twelve (12) month period (other than
if the Company terminates him/her without Cause), then Executive shall be immediately
obligated to repay the full gross amount of this sign-on bonus to the Company within one
(1) month of the employment cessation, unless the Company in its sole discretion forgives
this obligation via a signed, written document. Executive agrees and permits the Company
to deduct this amount from his/her final paycheck and any additional compensation amounts
owed to Executive by the Company. |
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Annual Performance Bonus: For each calendar year commencing on or after
January 1, 2009, Executive will be eligible to earn an annual performance-based cash bonus
(“Annual Performance Bonus”) based upon achievement of the Company’s performance plan,
with a target award potential as indicated in Exhibit A as a percent of Base Salary upon
achievement of 100% of the Company’s performance plan. The terms of the Annual
Performance Bonus shall be as set forth in the Company’s written bonus plan (attached
hereto as Exhibit B), as amended by the Company from time to time. The Annual Performance Bonus, if any, will
be paid to Executive following the end of the relevant calendar year, and no later than
March 15 immediately following the end of the calendar year in which the Annual
Performance Bonus was earned. |
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Flexible Perquisites: Executive shall be paid an annual flexible perquisite
in the gross amount reflected next to his/her name in the attached Exhibit A, less
customary and statutory withholdings and deductions (provided, however, that business use
of the auto and club shall be treated as direct reimbursement and thus non-taxable, unless
current tax law changes and requires the Company to treat it otherwise). This flexible
perquisite shall be paid and administered in accordance with the Company’s written
flexible perquisite plan (attached hereto as Exhibit C), as amended by the Company from
time to time. This program provides reimbursement for expenses, such as company auto,
country club membership or other memberships, financial counseling, auxiliary life
insurance, and a short list of other allowable expenses. |
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Equity: Executive shall be eligible to participate in the Company’s Equity
Incentive Plan, subject to and in accordance with its terms. |
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Change of Control: Executive shall be entitled to Change of Control rights
and benefits identical to those set forth in existing Change of Control agreements between
the Company and existing Section 16 officers/senior executives, and which were previously
approved and adopted by the Company’s Board of Directors upon the Company’s May 13, 2008
approved exit from bankruptcy restructuring. To the extent that the terms of such Change
of Control Agreements vary from Section 16 officer/senior executive to Section 16
officer/senior executive, then each Section 16 officer/senior executive shall be deemed to
have the best of terms between the variances. |
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Vacation and Holidays: Executive shall accrue paid vacation/personal time
and shall be entitled to paid holidays pursuant to the Company’s vacation and holiday
policy (attached hereto as Exhibit D), as amended by the Company from time to time.
Currently, Executive shall accrue paid vacation/personal time off at the pro rata rate of
fifteen (15) days per year and shall be entitled to ten (10) paid holidays per year on the
dates listed in Exhibit D. |
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Benefits: Executive will be entitled to participate in the Company’s
customary executive employee benefits, including but not limited to all benefits and group
insurance provided by the Company to similarly-situated executives. |
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At-Will Employment: Executive’s employment with the Company is and shall be
at all times at-will in nature. Either Executive or the Company can end the employment
relationship at any time with or without notice, and with or without reason.
Notwithstanding the foregoing, if Executive resigns employment or if the Company
terminates Executive’s employment for any reason other than Cause (as defined herein),
then Executive and Company, respectively, shall be required to give the other a minimum of
three (3) months advance written notice. |
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Severance: If the Company involuntarily terminates Executive’s employment
for any reason other than Cause (as defined herein), then Company shall pay Executive a
one-time severance payment in the gross amount reflected next to his/her name in the
attached Exhibit A. Except for any delay in payment required by Code Section 409A, this
severance payment shall be paid out over regular Company payroll for the length of time
that Executive would have earned the same amount as Base Salary and target Annual
Performance Bonus had his/her employment not been terminated — e.g., if the severance
amount were 100% of Base Salary, then the severance would pay out over a one (1) calendar
year period. This severance payment shall be expressly conditioned on Executive executing
and delivering a full waiver and release of all claims against the Company in a form as
attached hereto as Exhibit E, and on Executive continuing to comply with all obligations
that per their terms survive employment termination, including but not limited to the restrictive covenants
contained in Section 13 herein. For purposes of this Section 11, Cause shall be
defined as any of the following: |
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b. |
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Executive’s disability (defined as Executive’s inability to perform
his/her essential job duties for a consecutive period of 180 calendar days); |
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Executive commits, is indicted of, or is convicted of, or admits,
plea bargains, enters a plea of no contest or nolo contendere to, any felony of
any kind or a misdemeanor, or violates any laws, involving fraud, dishonesty or an
act of moral turpitude; |
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Executive materially breaches this Agreement or any other agreement
to which the Executive and the Company are parties; |
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Executive materially violates any written Company policy, regardless
of whether within or outside the scope of his/her authority; |
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Executive commits willful or intentional misconduct, gross
negligence, or dishonest, fraudulent or unethical behavior, or other conduct
involving serious moral turpitude in the performance of his/her duties hereunder; |
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Executive fails or refuses to materially comply (to the best of
his/her ability) with a specific direction of the Company, unless the Executive
reasonably and in good faith believes such specific direction to be unlawful (in
which case the Company’s termination of the Executive’s employment shall not be
for Cause under this provision); or |
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Executive engages in any conduct which breaches his/her fiduciary
duty to the Company, which materially injures the integrity, character or
reputation of the Company or which impugns Executive’s own integrity, character or
reputation so as to cause Executive to be unfit to act in the capacity of an
executive officer of the Company. |
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A termination of employment by the Company for Cause (other than death or disability)
under this Section 11 shall be effectuated by the Board giving the Executive written
notice of the termination within thirty (30) calendar days of the event constituting
Cause, or such longer period as the parties may agree, setting forth in reasonable
detail the specific conduct of the Executive that constitutes Cause, the specific
provisions of this term sheet/agreement on which the Company relies and, to the extent
such Cause is susceptible to cure, providing the Executive with a thirty (30) calendar
day cure period. If the Executive fails or is unable to remedy the condition within
such thirty (30) day cure period, then the Company may terminate the Executive’s
employment within thirty (30) calendar days following expiration of the cure period,
and if the Company fails to so terminate the Executive’s employment, then any
subsequent termination based upon the same underlying facts shall not constitute a
termination for Cause under this Section 11. |
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D&O Insurance: While employed pursuant to this term sheet/agreement,
Executive will be covered by the Company’s D&O insurance policy in accordance with its
terms, including full hook and tail coverage for covered claims arising out of events
prior to and during his employment. In addition, the Company shall indemnify Executive
pursuant to the provisions contained in the Company’s bylaws, as amended from time to
time. |
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Restrictive Covenants: Executive will be subject to standard confidentiality
(trade secret)/non-compete/non-solicitation covenants during his employment, and regarding
confidentiality (trade secrets) forever thereafter, but regarding
non-compete/non-solicitation for a period of twelve (12) months immediately following the end of employment with the
Company (for any or no reason). Executive will agree to a standard non-disparagement
covenant as to the Company, its Board, and Section 16 Officers, during employment and
forever thereafter. |
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Miscellaneous: This term sheet/agreement will be governed by Michigan law,
will be adjudicated exclusively within the State of Michigan, and will supersede and
replace any prior or other promises or agreements or documents between Executive and
anyone concerning the subject matter of this term sheet, including but not limited to any
promises or agreements by or with the Company or its Board of Directors; provided,
however, that all Exhibits hereto and all plans or documents referenced herein are
expressly incorporated and not superseded by this term sheet/agreement (which include but
are not limited to Exhibits A-E hereto, as well as the above-referenced Change of Control
agreements). This |
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term sheet/agreement cannot be amended, except by a written document
signed by the parties below and expressly referencing this term sheet. Executive agrees
that his/her services cannot be assigned and are personal to him/her. |
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| ACCEPTED AND AGREED: |
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| /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
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August 29, 2008 |
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| Executive |
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| ACCEPTED AND AGREED: |
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| Dura Automotive Systems, Inc. |
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| By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ |
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| President and Chief Executive Officer |
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August 29, 2008 |
EXHIBIT A
TO
DURA SYSTEMS, INC.
SECTION 16 OFFICER/SENIOR EXECUTIVE EMPLOYMENT TERM SHEET AGREEMENT
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| Executive |
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Start Date |
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Job Position |
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Base Salary |
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Severance |
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Bonus Target/Max |
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Sign Bonus |
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Flex Perquisite |
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Incumbent
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Executive Vice President and CAO
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$ |
325,000 |
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One and half times
total of annual
Base + Target Bonus
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60%/ 150%
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None
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$ |
22,000 |
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