Exhibit 10.29
March 1, 1999
Mr. George A. Thomas
Simpson Industries, Inc.
47603 Halyard Drive
Plymouth, Michigan 48170-2429
Dear George:
Simpson Industries, Inc. (the "Company") considers a dedicated and
vital management team to be essential for protecting and enhancing the best
interests of the Company and its shareholders. In this connection, the
Company recognizes that the possibility of a change in control may exist and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders. Accordingly,
the Board of Directors of the Company (the "Board") has determined that
appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of members of the Company's senior management,
including yourself, to their assigned duties without distraction in the face
of the potentially disturbing circumstances arising from the possibility of
change in control of the Company.
This letter agreement sets forth the severance benefits which the
Company agrees will be provided to you in the event your employment with the
Company is terminated subsequent to a "Change in Control of the Company" (as
defined in Section 3 hereof) under the circumstances described below.
1. Company's Right to Terminate. The Company may terminate your
employment at any time, subject to providing the benefits hereinafter
specified in accordance with the terms hereof and subject to any other
benefits which the Company has agreed in writing to provide you.
2. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect until December 31, 1999; provided,
however, that commencing on January 1, 2000 and each January 1 thereafter,
the term of this Agreement shall automatically be extended for one additional
year unless at least 30 days prior to such January 1 date, the Company shall
have given notice that it does not wish to extend this Agreement; and
provided, further, that this Agreement shall continue in effect beyond the
term provided herein if a change in control of the Company as defined in
Section 3 hereof, shall have occurred during such term.
3. Change in Control. No benefits shall be payable hereunder
unless there shall have been a change in control of the Company, as set forth
below, and your employment by the Company shall thereafter have been
terminated in accordance with Section 4 below. For purposes of this
Agreement, a "Change in Control of the Company" shall mean a Change in
Control of a nature that would be required to be reported in response to the
requirements of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act") provided that,
without limitation, such a Change in Control shall be deemed to have occurred
if (i) any "person" [as such term is used in Sections 13(d) and 14(d) of the
Exchange Act] is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 25 percent or more of the combined voting power of the Company's
then outstanding securities; or (ii) during any period of two consecutive
calendar years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority thereof
unless the election or the nomination for election by the Company's
shareholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period.
4. Termination Following Change in Control. If any of the events
described in Section 3 hereof constituting a Change in Control of the Company
shall have occurred, you shall be entitled to the benefits provided in
Section 5 hereof upon the subsequent termination of your employment within
two years from the date of such
Change in Control unless such termination is (a) because of your death, (b)
by the Company for Cause or Disability or (c) by you other than for Good
Reason.
(i) Disability. Termination by the Company of your
employment based on "Disability" shall mean termination because of
your absence from your duties with the Company on a full time
basis for 180 consecutive calendar days, as a result of your
incapacity due to physical or mental illness, unless within 30
days after Notice of Termination (as hereinafter defined) is given
following such absence you shall have returned to the full time
performance of your duties.
(ii) Cause. Termination by the Company of your
employment for "Cause" shall mean termination upon (A) the willful
and continued failure by you to substantially perform your duties
with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness), after a demand for
substantial performance is delivered to you by the Chief Executive
Officer of the Company or by the Chairman of the Board of
Directors which specifically identifies the manner in which such
executive believes that you have not substantially performed your
duties, or (B) the willful engaging by you in misconduct which is
materially injurious to the Company, monetarily or otherwise. For
purposes of this paragraph, no act, or failure to act, on your
part shall be considered "willful" unless done, or omitted to be
done, by you not in good faith and without reasonable belief that
your action or omission was in the best interest of the Company.
Notwithstanding the foregoing, you shall not be deemed to have
been terminated for Cause unless and until there shall have been
delivered to you a copy of a Notice of Termination from the Chief
Executive Officer of the Company after reasonable notice to you
and an opportunity for you, together with your counsel, to be
heard before the Chief Executive Officer, finding that in the good
faith opinion of such executive you were guilty of conduct set
forth above in clauses (A) or (B) of the first sentence of this
paragraph and specifying the particulars thereof in detail.
(iii) Good Reason. Termination by you of your
employment for "Good Reason" shall mean termination based on:
(A) the assignment to you of any
duties inconsistent with your position, duties,
responsibilities and status with the Company
immediately prior to a Change in Control, or a
change in your reporting responsibilities,
titles or offices as in effect immediately prior
to a Change in Control, or any removal of you
from or any failure to re-elect you to any of
such positions, except in connection with the
termination of your employment for Cause or
Disability or as a result of your death or by
you other than for Good Reason;
(B) a reduction by the Company in
your base salary as in effect on the date hereof
or as the same may be increased from time to
time;
(C) a failure by the Company to
continue the Company's incentive bonus plans as
the same may be modified from time to time but
substantially in the form currently in effect
(the "Plans"), or a failure by the Company to
continue you as a participant in the Plans on at
least the present basis or to pay you the
amounts which you would be entitled to receive
based on the Company's performance in accordance
with the Plans;
(D) the Company's requiring you to be
based anywhere other than your present location
or the Company's principal executive offices
except for required travel on the Company's
business to an extent substantially consistent
with your present business travel obligations,
or in the event you consent to any such
relocation, the failure by the Company to pay
(or reimburse you for) all reasonable moving
expenses incurred by you or to indemnify you
against any loss realized in the sale of your
principal residence in connection with any such
relocation;
(E) the failure by the Company to
continue in effect any benefit, retirement or
compensation plan, savings and profit sharing
plan, stock ownership plan, stock purchase plan,
stock option plan, life insurance plan, health
and accident plan, dental plan or disability
plan in which you are participating at the time
of a Change in Control of the Company (or plans
pro- viding you with no less favorable
benefits), the taking of any action by the
Company which would adversely affect your
participation in or materially reduce your
benefits under any of such plans or deprive you
of any material fringe benefit enjoyed by you at
the time of the Change in Control, or the
failure by the Company to provide you with the
number of paid vacation days to which you are
then entitled in accordance with the Company's
normal vacation policy in effect on the date
hereof;
(F) the failure by the Company to
obtain the assumption of the agreement to
perform this Agreement by any successor as
contemplated in Section 6 hereof; or
(G) any purported termination of your
employment which is not effected pursuant to a
Notice of Termination satisfying the
requirements of paragraph (iv) below [and, if
applicable, paragraph (ii) above]; and for
purposes of this Agreement, no such purported
termination shall be effective.
(iv) Notice of Termination. Any purported
termination by the Company pursuant to paragraph (i) or
(ii) above or by you pursuant to paragraph (iii) above
shall be communicated by written Notice of Termination to
the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which 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 of your employment under the
provision so indicated.
(v) Date of Termination. "Date of Termination"
shall mean (A) if your employment is terminated for
Disability, 30 days after Notice of Termination is given
(provided that you shall not have returned to the
performance of your duties on a full-time basis during
such 30 day period), (B) if your employment is terminated
pursuant to paragraph (ii) above, the date specified in
the Notice of Termination, and (C) if your employment is
terminated for any other reason, the date on which a
Notice of Termination is given; provided if within 30 days
after any Notice of Termination is given the party
receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination,
the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written
agreement of the parties, by a binding and final
arbitration award or by a final judgment, order or decree
of a court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been
perfected).
5. Compensation upon Termination or During Disability.
(i) During any period that you fail to perform
your duties hereunder as a result of incapacity due to
physical or mental illness, you shall continue to receive
your full base salary at the rate then in effect and any
bonus payments under the Plans paid during such period
until this Agreement is terminated pursuant to paragraph
4(i) hereof. Thereafter, your benefits shall be determined
in accordance with the Company's long-term disability plan
then in effect.
(ii) If your employment shall be terminated for
Cause, the Company shall pay you your full base salary
through the Date of Termination at the rate in effect at
the time Notice of Termination is given and the Company
shall have no further obligation to you under this
Agreement.
(iii) If your employment by the Company shall be
terminated (A) by the Company other than for Cause or
Disability or (B) by you for Good Reason, then you shall
be entitled to the benefits provided below:
(A) the Company shall pay you your
full base salary through the Date of Termination
at the rate in effect at the time Notice of
Termination is given and the amount, if any,
with respect to any year then ended which
pursuant to the Plans would have accrued to you
on the basis of the Company's performance but
which has not yet been paid to you;
(B) From the date of Termination
through a period of 24 months following the
Change in Control or until your normal
retirement date (whichever first occurs), you
shall be entitled to receive as severance pay
(i) a monthly payment equal to your monthly
salary for the last full month immediately
preceding termination, plus 1/12 of the average
of the short-term incentive bonus payments paid
to you or accrued with respect to each of the
two years preceding termination; (ii) continued
treatment as an "employee" under any stock
option, employee benefit or other compensation
arrangement (for the remaining period); (iii)
full benefits under each employee welfare
benefit plan in which you were entitled to
participate immediately prior to date of
termination; (iv) the right to immediately
exercise in full all outstanding stock options;
(v) full credit under the Company's retirement
plans for service through the remaining period.
(C) The Company shall also pay to you
all legal fees and expenses incurred by you as a
result of any controversy over this Agreement,
to the extent you are successful in legal
proceedings against the Company.
(iv) Notwithstanding the foregoing, no payments
shall be provided under subsection (iii) to the extent
that they would (A) constitute an "excess parachute
payment" under Section 280G of the Internal Revenue Code,
(B) disqualify an employee benefit plan or trust under the
Internal Revenue Code, or (C) cause an employee benefit
plan or trust to violate the Employee Income Retirement
Security Act of 1974, as amended.
6. Successors; Binding Agreement.
(i) The Company will require any successor
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, to expressly
assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be
required to perform it if no such succession had taken
place. Failure of the Company to obtain such agreement
prior to the effectiveness of any succession shall be a
breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on
the same terms as you would be entitled hereunder if you
terminated your employment for Good Reason, except that
for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement
provided for in this paragraph 6 or which otherwise
becomes bound by all the terms and provisions of this
Agreement by operation of law.
(ii) This Agreement shall inure to the benefit
of and be enforceable by your personal or legal
representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If you should
die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to your
devisee, legatee or other designee or, if there be no such
designee, to your estate.
7. Notice. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered or mailed
by United States certified or registered mail, returned receipt requested,
postage prepaid, addressed to the respective addresses set forth on the first
page of this Agreement, provided that all notices to the Company shall be
directed to the attention to the Chief Executive Officer of the Company with
a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by you and such officer as may be specifically
designated by the Board of Directors of the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the State of Michigan.
9. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
10. Arbitration. Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration in Oakland County, Michigan in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on
the arbitrator's award in any court having jurisdiction.
To confirm your acceptance, kindly sign and return to the
Company the enclosed copy of this letter which will then constitute our
agreement on this subject.
Sincerely,
SIMPSON INDUSTRIES, INC.
By:
Roy E. Parrott, President
Agreed to this 1st day of March, 1999
George A. Thomas