DATED MARCH 30, 1998
▇▇▇▇▇▇ MECHANICAL HANDLING
-and-
▇ ▇ ▇▇▇▇▇▇▇
----------------
SERVICE AGREEMENT
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THIS AGREEMENT is made the 30th day of March, One thousand nine hundred and
ninety-eight
BETWEEN:-
(1) ▇▇▇▇▇▇ MECHANICAL HANDLING whose registered office is at ▇.▇. ▇▇▇ ▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
(2) ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
WHEREBY IT IS AGREED THAT:-
1. INTERPRETATION AND DEFINITONS
1.1 In this Agreement the following words, phrases and expressions shall
have the following meanings:-
"the Board" the Directors of the Company present at a
meeting of the Directors or at a duly convened
meeting of a Committee of the Directors
"the Commencement Date" the date of this agreement
"the Company" ▇▇▇▇▇▇ Mechanical Handling Limited
"the Executive" ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
"the Group" the Company and its subsidiaries (as defined
in the Companies ▇▇▇ ▇▇▇▇ as amended by the
Companies Act 1989) and any associated company
(which expression shall mean any company which
is not a subsidiary of which not less than 20%
of its equity share capital is beneficially
owned by the Company) of the Company together
with MMH Holdings, Inc., a Delaware, U.S.A.
corporation.
1.2 Any reference to a statutory provision shall be deemed to include all
re-enactments and modifications of it or the provision referred to and any
regulations made under it or under the provision referred to.
1.3 The headings in this Agreement have been inserted for convenience only.
They are not to affect its interpretation.
2. THE EXECUTIVE'S APPOINTMENT
2.1 The Company will employ the Executive and the Executive will serve the
Company on and subject to the terms and conditions of this Agreement.
2.2 The Executive's employment began on the Commencement Date. The
Executive's period of continuous employment (taking into account any
employment with a previous employer which counts towards that period) began
on 2nd January 1989.
2.3 The Executive's employment will continue from the Commencement Date and
thereafter unless and until it is terminated pursuant to clause 10 or by
either:-
2.3.1 the Company giving to the Executive not less than twelve
months written notice; or
2.3.2 The Executive giving to the Company not less than twelve
months written notice.
3. THE EXECUTIVE'S DUTIES AND OBLIGATIONS
3.1 The Executive is to act as Vice President -- Middle East/Asia Pacific
Region of ▇▇▇▇▇▇ Mechanical Handling, Inc., reporting to the Chairman.
3.2 Whilst the Executive is employed by the Company he will:-
3.2.1 perform his duties with reasonable skill and care and to the
best of his ability
3.2.2 comply with all reasonable directions from time to time given
to him by the Board and at all times keep the Board properly
informed of matters which come to his attention which may
materially affect the business of the Company or any member
of the Group
3.2.3 devote the whole of his working time, abilities and attention
to his duties
3.2.4 work such hours as the Company may reasonably require whether
or not these are outside normal business hours
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3.2.5 at all times serve the Company and the Group well and
faithfully.
3.3 Whilst the Executive is employed by the Company he will not:-
3.3.1 do anything which may in the reasonable opinion of the Board
bring any member of the Group into disrepute or harm the
goodwill or commercial image of any member of the Group or
which is or is likely to be damaging or prejudicial to the
business and/or commercial interests of the Company or the
Group
3.3.2 be engaged or interested (except with the prior written
approval of the Board) in any other trade, profession,
business or occupation (including any public or private
activity which in the reasonable opinion of the Board may
interfere with the proper performance of his duties) or hold
any directorship or other office in any company or other body
whether incorporated or unincorporated.
3.4 Nothing contained in this Agreement shall preclude the Executive from
holding not more than 3% of the issued shares or other securities of any
class of a company which are quoted or dealt in on a recognized Stock
Exchange.
3.5 The initial location of the Executive is at North Road, Loughborough.
The Executive will however travel both within the UK and abroad as may be
necessary for the proper performance of his duties and will spend nights
away from the initial location and/or his home where that is necessary for
the performance of his duties. The Executive will not be required without
his consent to locate his office on a full time basis whether permanently or
temporarily to any place outside a radius of 50 miles from the initial
location.
3.6 There are no disciplinary rules on the date of this Agreement which are
specifically applicable to the Executive (other than the provisions of this
Agreement). The Executive shall be expected to behave at all times in a
manner appropriate to his position and responsibilities and to comply with
any staff rules in force from time to time. The Board may however introduce
and amend such disciplinary rules as it thinks fit.
3.7 If the Executive is dissatisfied with any disciplinary action taken
against him or has any grievance relating to his employment he may apply for
redress to the Chairman of the Company whose decision shall be final and
binding, subject to any recourse to law which the Executive may have.
3.8 Unless the Board prescribes otherwise, and save as expressly provided in
the Agreement there will be no specific terms or conditions relating to the
Executive's hours of work. The Executive shall work such hours as may be
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necessary or appropriate from time to time to carry out his duties properly
and effectively.
4. RENUMERATION AND EXPENSES
4.1 The Executive will receive a salary at the rate of (pound)80,900 per
annum. This will be reviewed by the Board (or by any Compensation or
Remuneration Committee established for that purpose) at least once a year.
4.2 The salary is payable by equal monthly installments in arrears on the
last day of each month (or such other day as the Board shall from time to
time decide). It will be deemed to accrue from day to day.
4.3 The salary includes all remuneration or fees to which the Executive
shall be entitled as a Director or officer of any member of the Group.
4.4 The Company or the relevant Group member will reimburse all reasonable
travelling, hotel, entertaining and other expenses properly incurred by the
Executive in the performance of his duties. The Executive will provide
whatever receipts or other supporting documentation may be required and will
comply with the Company's policy and rules relating to the incurring and
reimbursement of expenditure as may be in force from time to time.
4.5 The Executive will be entitled to receive a bonus calculated and paid in
accordance with the provisions of the management bonus scheme from time to
time maintained by the Company.
4.6 For each of 1998 and 1999, the Executive shall receive an additional
payment in the amount of (pound)56,250.
4.7 The Executive shall be eligible to receive an initial option grant with
respect to _____ "Equity Units" (as defined under the Company's Option Plan
in accordance with the general terms set forth in Schedule A).
5. BENEFITS
5.1 The Company will provide for the private and business use of the
Executive a suitable motor car in accordance with the policy of the Company
as determined by the Board from time to time.
5.2 The Company will pay the cost of insuring, taxing and maintaining the
car and will reimburse the Executive all the business and private running
expenses thereof. The Executive will ensure that the car is serviced in
accordance with the manufacturer's recommendations and that he complies at
all time with the
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requirements and provisions of the policy of insurance in force in respect
of the car from time to time.
5.3 The car is to remain the property of the Company. On termination of this
Agreement the Executive is to return it in good condition (fair wear and
tear excepted) to the Company together with its keys and all documents
relating to it.
5.4 The Executive shall be entitled to benefits under such private health
plan as the Board may determine from time to time (on the National Scale
appropriate to the nearest hospital to the Executive's home) under its rules
from time to time in force for the benefit of the Executive his spouse and
his children who are resident in the United Kingdom and are under the age of
21 or who are more than that age but are engaged in a full time course of
education.
5.5 The Company will reimburse the Executive with all reasonable expenses
incurred by the Executive arising out of the Executive's use of his home
telephone.
6. PENSION
6.1 Subject to the terms of the Trust Deed, the Scheme rules and any other
scheme documentation from time to time in force the Executive will be
entitled to join and be a member of the pension scheme or schemes to be
established by the Company and the Company will procure that the benefits to
which the Executive is entitled pursuant to such scheme or schemes are equal
in value overall to the benefits which the Executive would have been
entitled to under the Trafalgar House Executive Pension Scheme ("the
Scheme") in respect of the Executive's service in the scheme to the
Commencement Date. If he does so he will make contributions to and will be
entitled to benefits under the Scheme in accordance with the Trust Deed and
rules relating to it for the time being in force.
6.2 A Contracting-Out Certificate issued under the Social Security ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ is in force in respect of the Executive's employment.
6.3 Under the terms of the Scheme currently in force and applicable to the
Executive, the Executive is entitled to retire early with the prior written
consent of both the Company and the trustees of the Scheme. The Company
hereby expressly grants its consent to the Executive retiring on or at any
time after his 62nd birthday should he wish to do so. The Executive may in
his absolute discretion retire on or after his 62nd birthday but cannot be
compelled by the Company to do so. The Company also agrees to use all
reasonable endeavours to procure the consent of the trustees of the Scheme
to the Executive retiring on or at any time after his 62nd birthday should
he wish to do so. The Company agrees to secure the Executive's retirement on
or at any time after his 62nd birthday on the same basis as if the Executive
had retired at age 65 and there shall be no actuarial
5
discounts applied to the Executive's entitlement for his choosing to take
early retirement. Insofar as it is required to do so in order for this
provision to be effective, the Company agrees to make such payments as are
necessary into the Scheme on behalf of the Executive to secure his early
retirement without discounting his pension or lump sum entitlement.
6.4 In the event that the Executive does choose to retire early, the
provisions relating to normal retirement age referred to elsewhere in this
Agreement shall be deemed altered to reflect the actual age at which the
Executive chooses to retire.
7. HOLIDAYS
7.1 The Executive will be entitled (in addition to normal pubic and Bank
holidays) to 25 working days' paid holiday each year. For these purposes the
holiday year. For these purposes the holiday year starts on the 1st January.
7.2 If the employment of the Executive is terminated during any calendar
year he will be entitled to accrued holiday pay of one day's salary for each
day of his accrued entitlement which he has not taken. These provisions will
not apply if this Agreement is terminated pursuant to clause 10.1 in which
event the Executive will have no claim for accrued holiday pay.
7.3 For the purposes of clause 7.2 holidays are deemed to accrue from day to
day and any holiday entitlement in respect of any holiday year not utilized
by the end of that year shall be forfeit.
7.4 All holidays are to be taken at times approved by the Board.
7.5 The Company may require the Executive to take any unused holiday during
any period of notice given by either party to terminate this agreement.
8. SICKNESS AND MEDICAL EXAMINATION
8.1 If the Executive is prevented by sickness or injury from properly
performing his duties under this Agreement:-
8.1.1 during the first six continuous months of such absence he
will be entitled to continue to receive the salary and
benefits set out herein at full rate. After such period
payment (other than payment of any Statutory Sick Pay to
which the Executive may be entitled) will cease and the
provisions of clause 8.3 will apply.
8.1.2 He will claim all state sickness benefits available to him
and account to the Company for these during the period in
which he receives sick pay.
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8.2 Any salary paid to the Executive by virtue of clause 8.1.1 shall be
deemed to satisfy any entitlement of the Executive to receive Statutory Sick
Pay for the period to which the salary relates.
8.3 If the Executive continues for more than six continuous months to be
prevented by sickness or injury from properly performing his duties the
Executive will be entitled to such benefits as are available to him from
time to time under the rules of the permanent health insurance scheme of the
Company and the payment of salary or other benefits shall be at the
discretion of the Board. This clause takes effect subject to clause 10.
8.4 Salary paid by the Company to the Executive in respect of any period of
absence resulting from the negligence of a third party shall be recoverable
by the Company out of any damages he the is paid by or on behalf of that
third party.
8.5 The Board may at its discretion require the Executive to furnish
evidence satisfactory to it of any sickness or injury of the Executive. It
may also require him from time to time to undergo a medical examination by a
medical practitioner nominated by the Company. The Company will bear the
costs of any such examination and will be entitled to full disclosure of the
results.
9. CONFIDENTIALITY
9.1 By virtue of his senior position the Executive acknowledges that he will
acquire detailed knowledge of the commercial affairs and business
transactions of the Company and the Group including without limitation trade
secrets and confidential information about customers, suppliers, terms of
sale, terms of supply, plans for growth and expansion and technical and
product improvements and developments. The Executive is hereby made
expressly aware and agrees that all of such information ("the Confidential
Information") is the property of and confidential to the Company and the
Group.
9.2 The Executive shall keep secret and shall not at any time (either during
the continuance of this Agreement or after its termination howsoever
arising) divulge to any person or use of copy for his own or another's
benefit any of the Confidential Information. The Executive will use
reasonable endeavours to prevent the publication or disclosure of any such
information and will notify the Board forthwith of any instances of
disclosure of which he is aware.
9.3 The restrictions set out in clause 9.2 are not to apply to information:-
9.3.1 divulged by the Executive in the proper performance of his
duties
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9.3.2 required by an order of the Board any Court of competent
jurisdiction to be disclosed by the Executive
9.3.3 within the public domain through no fault of the Executive.
10. TERMINATION
10.1 The company may (without prejudice to and in addition to any other
remedy and notwithstanding the provisions of clause 2.3) terminate this
Agreement (and Executive's employment) immediately and without notice or
payment in lieu of notice upon the death of Executive, the expiration of the
term hereof, or for "Cause". Cause shall exist if the Executive:-
10.1.1 becomes a patient within the meaning of the Mental Health ▇▇▇
▇▇▇▇ or is otherwise absent from work through sickness or
disability for a period exceeding six months in any twelve
month period
10.1.2 is declared bankrupt by a court of competent jurisdiction,
applies for a receiving order or administration order, has a
receiving order or administration order made against him or
enters into any arrangement or composition with his creditors
or otherwise takes the benefit of any statutory provision for
the relief of insolvent debtors
10.1.3 without reasonable cause neglects refuses or fails to perform
all or any of his duties under this Agreement to an extent
which is material and continues to do so after having been
warned in writing by the Board about such neglect refusal or
failure
10.1.4 at any time and for whatever reason resigns from any
Directorship which he holds within the Group without the
consent of the Board or is disqualified from acting as a
Director.
10.2 A decision to terminate the Executive's employment pursuant to the
provisions of clause 10.1 shall be effective if taken or approved or
ratified by the Board and shall be communicated to the Executive in writing.
10.3 The employment of the Executive and this Agreement will come to an end
automatically on the last day of the month in which the Executive reaches
normal retirement age (currently age 65), provided, however, that the
Executive may elect, in his sole discretion, to retire and terminate his
Employment and this Agreement upon his attainment of age 62.
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10.4 Upon the termination of this Agreement under clause 10.1 or 10.3 the
Executive will be entitled to receive only the Accrued Benefits described in
clause 10.5.3(i). If Executive's employment is terminated during the term
hereof other than for Cause, death or the attainment of age 65, Executive
shall be entitled to receive all of the benefits described in clause 10.5.3.
10.5 The Executive's termination of this Agreement is governed under the
provisions set forth below.
10.5.1 Upon termination of this Agreement by Executive other than
for "Good Reason" (as hereinafter defined), Executive shall
be entitled to receive only the Accrued Benefits described in
clause 10.5.3(i).
10.5.2 Executive may terminate his employment under this Agreement
for Good Reason at any time during the term hereof unless
this Agreement has previously expired or been terminated by
reason of (i) the death of Executive, (ii) attainment by
Executive of age 65; (iii) termination of this Agreement by
the Company for Cause, or (iv) voluntary termination of this
Agreement by Executive other than for Good Reason.
Termination by Executive for "Good Reason" shall mean
termination by Executive of his employment hereunder because
of:-
(i) the failure by the Company to pay or cause to be paid the
base salary, benefits, and bonus required by this Agreement
and a continuation of such failure for 10 days after the
Company receives notice thereof; or
(ii) a material diminishment in the responsibilities and
duties assigned to Executive by the Company or any other
material breach by the Company of any of the terms of this
Agreement and the continuation of such breach for thirty days
after the Company shall have received written notice of such
breach, which notice shall mean a notice that shall indicate
the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination
under the provision so indicated.
10.5.3 Upon any termination by Executive of his employment under
this Agreement for Good Reason, the Company shall forthwith:-
(i) pay or cause to be paid to Executive in cash the
following accrued benefits ("Accrued Benefits"): (A) all
salary earned or accrued through the termination date; (B)
reimburse Executive for any and all monies advanced by the
Executive in connection with
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Executive's employment for reasonable and necessary expenses
incurred by Executive through the termination date; and (C)
pay all other amounts and benefits to which Executive may be
entitled under the terms of any benefit plan of the Company.
Payment of amounts other than those described in subsection
(C) hereof shall be made within 10 days after the termination
date. Payment of amounts under subsection (C) hereof shall be
pursuant to the terms of any such plans either by the Company
or a trust implementing such plan; and
(ii) pay or cause to be paid to Executive (a) for one year
after his termination, the annual base salary payable to
Executive hereunder immediately prior to such termination in
accordance with the Company's normal payroll practices, and
(b) a lump sum, payable upon termination, arrived at by
multiplying (pound)56,250 by a number equal to two minus "X",
where "X" equals the number of times Executive received the
additional amount payable pursuant to clause 4.6 hereof.
In addition, for purposes of the Company's medical, dental and life
insurance programs, Executive shall be considered and deemed for a
period of one year following such termination or until Executive
attains the age of 65 or until reasonably equivalent benefits are paid
or extended by a new employer, whichever first occurs, to be a
full-time employee of the Company and be entitled to all benefits,
rights and privileges thereunder. If at the end of such year, if
Executive has not attained the age of 65 or has not previously received
or is not then receiving equivalent benefits from a new employer, the
Company shall arrange, at its sole cost and expense (but not including
premiums therefor), to enable Executive to convert the coverage under
such polices to equivalent individual policies.
10.6 On the termination of the Executive's employment for any reason:-
10.6.1 the Executive will at the request of the Company immediately
resign from all directorships, offices and trusteeships
within the Group then held by him without compensation for
loss of office as such director, officer or trustee. The
Executive irrevocably authorizes the Company to appoint some
person in his name and on his behalf to sign any documents
and do any things necessary to effect such resignation should
he fail to do so himself.
10.6.2 the Company may deduct from any salary or wages due from it
to the Executive any monies which are due from wages due the
Executive to it or to the Group.
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10.6.3 the Executive will return forthwith to the Company all books,
papers, records, correspondence, notes, memoranda, sketches,
technical drawings, specifications, and other documents and
all other property belonging to the Company or any Group
Company, to the Company's Head Office or as the Board shall
otherwise direct.
10.7 Any provision of this Agreement which is expressed to have effect after
its termination will continue in force in accordance with its terms.
11. POST TERMINATION OBLIGATIONS
11.1 The Executive shall not, directly or indirectly, during the period of
twelve months immediately following the termination of this Agreement in any
Specified Capacity:-
11.1.1 solicit or endeavour to solicit orders from or entice away
from any Relevant Company as defined in clause 11.4.3 in
connection with any business falling within the definition of
"Specified Business" set out in clause 11.4.2 or deal with
any person, firm, company or organization who shall have been
a client or customer of any Relevant Company during the
twelve months preceding such termination; and
11.1.2 attempt to induce or persuade any person who was employed by
any Relevant Company at the date of the termination of this
agreement or at any time during the twelve months preceding
such termination to leave such employment.
11.2 The Executive shall not, directly or indirectly, during the period of
twelve months after the termination of this agreement within the Specified
Areas in any Specified Capacity carry on or be interested, engaged or
concerned in all or any of the Specified Businesses in competition with (i)
the Company or (ii) any member of the Group.
11.3 The restrictions in clauses 11.1 and 11.2
11.3.1 shall not apply to the Executive if this Agreement is
terminated by the Company in breach of contract or if an
industrial tribunal makes an award of compensation for unfair
dismissal against the Company in respect of the termination
of the Executive's employment; and
11.3.2 any period of notice which is worked by the Executive
following termination or notice of termination by the Company
shall be
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deducted from the twelve month period for which paragraphs
11.1 and 11.2 would otherwise apply; and
11.3.3 are considered by the parties to be reasonable in all the
circumstances and for the legitimate and necessary protection
of the Confidential Information customer and trade connection
of the Company and the Group. If, however, any restriction is
found by a Court to be void as going beyond what is
reasonable in all the circumstances the restrictions will
apply with such modifications as may be necessary to render
them valid and effective.
11.4 For the purposes of this clause:-
11.4.1 "Specified Capacity" means each of the following capacities:-
11.4.1.1 as principal whether solely or jointly with
any other person
11.4.1.2 as partner with any other person
11.4.1.3 as agent for any other person
11.4.1.4 as an employee of any other person
11.4.1.5 as an officer of any company or
11.4.1.6 as the owner of any interest in any shares or
other securities in any company (other than in
accordance with clause 3.4).
11.4.2 "Specified Business" means each of the following taken
separately:-
11.4.2.1 the design, manufacture, sale and distribution
of cranes, lifting equipment and associated
and component products and/or
11.4.2.2 each other business and/or activity of each
member of the Group with or in which the
Executive has been involved or had
responsibility for during the 12 months
immediately preceding the termination of this
agreement.
11.4.3 "Relevant Company" means (i) the Company; and (ii) any member
of the Group.
11.4.4 "Specified Areas" includes the United Kingdom and countries
forming part of the Middle East/Asia Pacific region.
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11.5 Each of the obligations contained in clause 11.1 above shall be a
separate and several obligation.
12. INVENTIONS
12.1 If at any time during the continuance of this Agreement the Executive
shall discover, make or conceive either by himself or jointly with any other
person or persons any invention, discovery, formula, design, process,
adaptation or improvement ("Intellectual Property") which relates to or is
connected with or capable of being worked or employed in connection with any
trade or business for the time being carried on by the Company and or the
Group he shall forthwith supply in writing full particulars concerning the
same to the Company.
12.2 All ("Intellectual Property") which is either made in the course of the
normal duties of the Executive or in the course of duties falling outside
his normal duties but specifically assigned to him shall upon the discovery
making or conception thereof belong to and vest in the Company absolutely
and beneficially together with all rights to apply for patent or other
protection thereby obtained. The Executive shall if so required by the
Company and at the expense of the Company take all such steps and execute
such documents as may be necessary fully and effectually to vest in the
Company or as it may direct the full benefit of the said Intellectual
Property and to give to the Company or its nominees such protection as it
may require in respect thereof in any part of the world whether by way of
patents or otherwise howsoever.
12.3 In the event of any dispute arising between the Company and the
Executive as to whether or not any invention communicated falls within the
scope of sub-clause 12.2 hereof application will be made jointly by the
Company and the Executive to the Comptroller General of Patents in
accordance with Section 8 of the Patents ▇▇▇ ▇▇▇▇ for determination of the
matter and his decision shall be final and binding.
12.4 The Executive acknowledges that inventions may reasonably be expected
to result from the carrying out of his normal duties and of any duties
specifically assigned to him within the meaning of Section 39(1)(a) of the
Patents ▇▇▇ ▇▇▇▇.
12.5 The Executive acknowledges that because of the nature of his duties and
the particular responsibilities arising from the nature of his duties he has
a special obligation to further the interests of the undertaking of the
Company and the Group within the meaning of Section 39(1)(a) of the Patents
▇▇▇ ▇▇▇▇.
12.6 The Executive hereby irrevocably appoints the Company to be his
attorney in his name and on his behalf to execute such instrument or do such
things and generally to use his name for the purpose of giving to the
Company (or its nominee) the benefit of the provisions of this clause and in
favour of any third
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party a certificate in writing signed by any Director or Secretary of the
Company that any instrument or act falls within the authority hereby
conferred shall be conclusive evidence that such is the case. It is hereby
agreed between the parties that the provisions of this Clause 12 shall
survive in their entirety the termination of the Executive's employment for
whatsoever reason.
13. NOTICES
13.1 Any notice to be given under this Agreement to the Executive may be
given to him personally or sent to him by prepaid first class letter
addressed to him at his last known place of residence. Any notice to be
given to the Company may be served by leaving it at or sending it by prepaid
first class letter to its registered office for the time being.
13.2 Any notice served by post shall be deemed to have been served
forty-eight hours after it was posted and proof that the notice was properly
addressed, pre-paid and posted shall be sufficient evidence of service.
14. GOVERNING LAW
This agreement shall be interpreted and enforced in accordance with the laws
of England.
15. SUPERSESSION OF PREVIOUS AGREEMENTS
This Agreement supersedes and is in substitution for any subsisting
agreements between the Company (or any Group member) and the Executive
relating to his employment. All such subsisting agreements are terminated by
mutual consent with effect from the Commencement Date.
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IN WITNESS whereof the parties have executed this Agreement on the date set
out above.
EXECUTED as a Deed by
▇▇▇▇▇▇ MECHANICAL HANDLING LIMITED
in the presence of:- /s/ ▇▇▇▇▇ ▇▇▇▇▇
Director
SIGNED as a DEED by the
said ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
in the presence of: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇. ▇. ▇▇▇▇▇▇
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Schedule A
Option Plan
Number of Shares Reserved: 1,186.0849 shares of common stock and
4,328.2500 shares of Series C preferred stock
in MMH Holdings, Inc. (the "Company"), with a
value of $8.1 million on the Closing Date
(such grant to be denominated in 8,100 units,
consisting of 0.1464 shares of common stock
and 0.5344 shares of Series C preferred stock
units and hereinafter referred to as "Equity
Units").
Amount of Initial Grant: An initial option grant (the "Initial Grant")
shall be made with respect to the number of
Equity Units set forth in the Employment
Agreement. Additional option grants shall be
made as determined by the Board of Directors
or Compensation Committee of the Company. The
Initial Grant and future grants shall be from
a pool of 8,100 Equity Units set aside for
such grants.
Exercise Price: The exercise price of an Equity Unit shall be
equal to: (i) the fair market value of a share
of common stock on the date of grant
multiplied by the number of shares of common
stock covered by the Equity Unit, plus (ii)
the liquidation preference multiplied by the
number of shares of preferred stock covered by
the Equity Unit. The exercise price would have
been $1,000 on the Closing Date.
Term: Options, or any portion thereof, not
previously exercised or terminated will expire
ten years from the date of grant.
Method of Exercise: Prior to an "initial public offering" of
▇▇▇▇▇▇▇ or any subsidiary company, cash only;
provided, however, the Board of Directors or
Compensation Committee of the Company may
authorize cashless exercises. An option may
only be exercised with respect to whole Equity
Units (i.e., as to all the shares of common
stock and preferred stock covered by the
Equity Unit).
Termination of Employment: Upon the occurrence of an "Employment-Related
Event," options, to the extent vested on the
date of the Employment-Related Event, shall be
exercisable for 90 days from such date. 80% of
all A Options and B Options and 100% of C
Options which are not vested on the date of
the Employment-Related Event shall be
forfeited.
Upon the occurrence of a Termination Event all
options (vested and nonvested) shall terminate
on the date of the Termination Event.
Call on Shares Acquired In the event of the Executive's termination of
on Exercise of Option: employment for any reason (Employment Related
Event or Termination Event) prior to an
"initial public offering" of the shares of the
Company, all shares of the Company held by
Executive shall be subject to a "call" by the
Company at the FMV on the date of the "call").
In the event that the Company is restricted
from purchasing such shares for cash under any
applicable financing or other agreements, the
Company may issue the Executive a note or such
other permissible security (which shall
contain commercially reasonable terms) in full
satisfaction of such call.
Tag-along Rights: The Executive will have the same tag-along
rights as set forth in paragraph 8 of the Term
Sheet for Equity Investment Stockholders
Agreement (attached as Exhibit E to the
Recapitalization Agreement among Harnischfeger
Corporation, the Sellers named therein and MHE
Investments, Inc., dated January 28, 1998).
Restrictions on Transfer: Options will be non-transferable, except
without consideration to a trust or
partnership the only beneficiaries or partners
(as the case may be) of which are immediate
family member of Executive; shares obtained
upon the exercise of options may be
transferred only in accordance with the laws
of descent and distribution.
Other than with respect to transfers of
options pursuant to the preceding sentence, no
third party shall have any direct or indirect
beneficial interest
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in the options or the shares obtained upon the
exercise thereof.
Vesting: A Options: 1/3 of the total number of Equity
Units subject to the Initial Grant shall vest
ratably (25% a year) on each of the first
through fourth anniversaries of the date of
grant ("A Options"), provided the Executive is
in the employ of the Company on each such
date.
If there is a Change in Control (as defined in
Schedule D to the Employment Agreement) prior
to the fourth anniversary of the date of
grant, and the Executive is still in the
employ of the Company, all unvested A Options
shall vest.
B Options: 1/3 of the total number of Equity
Units subject to the Initial Grant shall vest
25% a year at the end of each of 1999, 2000,
2001, and 2002, subject to satisfaction of the
applicable EBITDA-based "Performance Hurdle"
for each such year ("B Options"). In the event
that the Performance Hurdle is not met for any
particular year, the applicable portion of the
B Options which did not vest will be carried
over to the next year. Thus, if on a
cumulative basis, the aggregate Performance
Hurdles for such two year period are met, any
portion that did not vest previously, shall
vest. For example, if the Performance Hurdle
is not met in 1999, but on a cumulative basis
(i.e., the sum of EBITDA for 1999 and 2000
equals or exceeds the sum of the Performance
Hurdles for 1999 and 2000) the unvested B
Options attributable to 1999 and 2000 will
vest in 2000. Any portion of B Options which
does not vest because of not meeting the
relevant Performance Hurdle in a particular
year or on a cumulative basis in a subsequent
year will be treated like C Options upon the
"Determination Date" (defined below) and will
vest if the relevant performance criterion for
C Options is satisfied.
For purposes of the B Options, Performance
Hurdle shall mean the precise EBITDA target
attached as Exhibit I for fiscal years
1999-2002, which in the event of any
acquisition will be increased by the pro
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forma projections used in approving any such
acquisitions.
The Board shall certify to Executive the
attainment or lack of attainment of the
applicable Performance Hurdles with respect to
any calendar year as soon as practicable
following the receipt of audited financial
statements of the Company.
If there is a Change in Control prior to the
end of fiscal year 2002, and the Executive is
still in the employ of the Company, unvested B
Options shall vest only if the criterion for
the vesting of C Options is met, as provided
in the next section.
C Options: 1/3 of the total number of Equity
Units subject to the Initial Grant, plus any B
Options which did not vest and have been
carried forward, shall vest if the Internal
Rate of Return earned by the Company exceeds
40% by the "Determination Date," ("C Options")
and the Executive is still in the employ of
the Company on the Determination Date.
The Determination Date regarding the
attainment of the Internal Rate of Return
shall be the closing date of a "Change of
Control".
Initial Public Offering After an initial public offering, and subject
to the approval of the Compensation Committee,
the Executive will be permitted to exercise
his vested options and sell his Equity Units.
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