Exhibit 10.18
SEVERANCE AGREEMENT AND GENERAL RELEASE
This Severance Agreement and General Release ("Agreement") is made as of the 6th
day of October, 1999, by and among GROVE INVESTORS LLC and GROVE WORLDWIDE LLC,
both Delaware limited liability companies, with their principal offices at 1565
Buchanan Trail East, Shady Grove, Pennsylvania 17256-0021 (hereinafter, and
together with their respective subsidiaries and affiliates, collectively
"Grove") and SALVATORE J. BONANNO, residing at P.O. Box 763, Blue Ridge Summit,
Pennsylvania 17214 ("Employee"). The parties agree as follows:
1. This Agreement confirms the Employee's termination of employment with Grove
effective October 19, 1999, pursuant to the written notice to Employee
dated October 5, 1999. As consideration for this Agreement, Grove hereby
agrees as follows:
(a) SEVERANCE PAY. During the period from October 19, 1999 through
October 18, 2001, Grove will pay Employee his current monthly
base salary ($41,667), subject to subparagraph (e) herein. All
of these payments will be paid monthly on normal pay dates net
of normal payroll deductions, and such payments will be mailed
to the Employee's residence;
(b) VACATION PAY. Within ten (10) days of Employee's signing this
Agreement, Grove will pay Employee $25,000 for thirteen (13)
remaining unused vacation days. Inasmuch as Employee will no
longer be employed by Grove after October 19, 1999, Employee
will no longer accrue any vacation after that date;
(c) BONUS PAYMENT. During the period from October 19, 1999 through
October 18, 2001, Grove will pay Employee a monthly bonus
severance of $41,666.67, equal to one-twelfth of Employee's
target bonus amount ($500,000) in effect for the year of
termination of employment, regardless of actual operating
results during such period. All of these payments will be paid
monthly, subject to subparagraph (i) herein, on normal pay
dates net of normal payroll deductions, and such payments will
be mailed to the Employee's residence;
(d) ADDITIONAL BONUS. Grove will pay the Employee a special bonus
in the amount of $450,000, net of normal payroll deductions,
to be paid on March 31, 2000;
(e) ACCELERATED PAYMENT FOR TAX PURPOSES. At Employee's request to
make additional cash available to Employee at the time his
income taxes for 1999 become due, Grove agrees that the
payment to Employee on March 31, 2000 (not including the
additional bonus in (d) above) will include portions of future
payments such that the gross amount shall be $250,000. Since
Employee would otherwise have been entitled to only a gross
amount of $83,333.67 ($41,667 in monthly severance and
$41.666.67 in monthly bonus, before normal payroll deductions
and any offset for payment against Note 1), Grove will advance
(from future payment entitlements) $166,666.33 to Employee on
this date. During each of the eighteen (18) months following
this payment (i.e., beginning in April 2000
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Salvatore J. Bonanno
Page 2
and continuing through September 2001), Grove will withhold
and offset $9,259.24 (one-eighteenth of the amount advanced)
from the monthly severance payment amount otherwise due to
Employee under subparagraph (a) above (I.E., Employee will
receive $32,407.76 in monthly severance pay, net of normal
payroll deductions, during these eighteen (18) months);
(f) MEDICAL BENEFITS. During the period from October 19, 1999
through October 18, 2001, Employee may elect to participate in
the following Grove programs (or the then current programs in
effect and available to active employees of Grove) provided
that Employee makes the same contributions as if he were an
active Grove employee:
(i) Group Life Insurance;
(ii) High Option Blue Cross and Blue Shield PPO Medical
Plan with Prescription Drug; and
(iii) Group Comprehensive Dental/Vision.
During this same period, however, Employee is not eligible to
participate in (i) the Exec-U-Care Medical Plan; (ii) the
Grove U.S. L.L.C. Retirement Savings & Investment Plan; (iii)
the Grove Long Term Disability Income Plan; or (iv) the
executive car allowance program;
(g) RETURN OF GROVE PROPERTY. Employee shall immediately return
any and all property belonging to Grove, including (i)
computer equipment (laptop, printer, modem, ETC.); (ii) mobile
or cellular phone equipment; (iii) keys and identification
badges; and (iv) company credit cards, phone calling cards,
ETC.;
(h) TAX PREPARATION. The advice and services of KPMG's tax
consultants shall be available to Employee in preparation of
Employee's federal and state tax returns for tax year 1999;
(i) LOAN. Under a Promissory Note for $1,000,000 dated June 27,
1998 ("Note 1"), any unpaid Principal Amount and all unpaid
interest accrued thereon is due and payable by Employee to
Grove at the time the Employee receives proceeds from the
redemption of his ownership Interests (SEE Paragraph 6 below).
As of the Closing date (November 15, 1999, SEE Paragraph 5
below), the unpaid interest accrued on Note 1 will amount to
$111,349.31 (assuming Employee makes no payments prior to that
date). To the extent that any Principal Amount and accrued
interest thereon remains unpaid after this date, Grove shall
withhold and offset fifty percent (50%) of the after-tax
proceeds of the monthly bonus payments (I.E., net of normal
payroll deductions) under subparagraph (c) above until such
time as Employee's payment obligations under Note 1 are fully
satisfied;
(j) LOAN. Under a Second Amended and Restated Promissory Note for
$912,663 dated June 27, 1998 ("Note 2"), any unpaid Principal
Amount and all unpaid
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Salvatore J. Bonanno
Page 3
interest accrued thereon is due and payable by Employee to
Grove on June 27, 2005 (seven years), unless Note 2 is
forgiven upon the occurrence of certain events, including
involuntary discharge. Under the Amended and Restated
Promissory Note, a Forgivable Portion of $453,391 was to be
applied against the note upon the occurrence of certain
events, including involuntary discharge. Separately, under a
Bonus Cancellation Agreement, Employee waived all rights and
interests to a bonus payment of $450,000, originally scheduled
to be paid on March 31, 1999. This amount was added to the
Forgivable Portion and applied against Note 2. Further,
Employee made a cash payment of $9,272 for accrued interest on
Note 2 by check payable to Grove dated October 18, 1999. As a
result, Note 2 and all accrued interest related thereto will
be forgiven(1); and
(k) TERMINATION OF EMPLOYMENT. Nothing in this Agreement,
including, but not limited to, Grove's payment of
consideration to Employee under this Agreement, shall be
construed as evidence that Employee remains an employee of
Grove after October 19, 1999.
2. In consideration of the payments and benefits being provided by Grove
as set forth in Paragraph 1 above, Employee agrees to execute and
fulfill the responsibilities and obligations set forth in this
Agreement.
3. Other than the bonus payments under Paragraph 1(c), there is no amount
due for Incentive Compensation under the Grove Short Term Incentive
Plan ("STIP") for the completed months of Employee's employment with
Grove during fiscal year 1999. Employee will not be eligible to
participate in or accrue any benefit under the STIP for fiscal year
2000 or beyond.
4. All of the Employee's options to obtain Class A units under the
Management Option Plan are unvested, and hence are automatically
canceled without consideration.
5. Under the Call Notice provision of Section 11.1(d) of The Second
Amended and Restated Limited Liability Company Agreement of Grove
Investors LLC dated as of June 27, 1998 (as amended, the "LLC
Agreement"), Grove Investors may exercise its Termination Call Right
and elect to purchase the Employee's Interests at any time after the
Employee's termination. This Agreement constitutes written notice of
Grove Investors' Termination Call Notice under that provision. Pursuant
to Section 11.1(e) of the LLC Agreement, the closing of the purchase of
the Termination Called Interest shall be held on November 15, 1999 (the
"Closing"), at which time the Employee will be paid the relevant
termination call price, subject to Paragraph 6 below. Upon consummation
of the Closing, Employee shall cease to be a Member of Grove Investors
LLC.
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(1) Forgiveness of Note 2 under this Agreement is a realizable event for tax
purposes. The forgivable portion of Note 2 ($903,391) will be reported to the
IRS on a Form 1099 for tax year 1999.
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Salvatore J. Bonanno
Page 4
6. Having given the Employee the Termination Call Notice, Grove Investors
LLC shall purchase the Employee's Interests for an amount equal to the
Fair Market Value of such Interests. (Section 11.1(b)(i)) The
Management Committee has made a good faith determination that the Fair
Market Value of Employees' Interests is $1,000,000 (50% of Employee's
$2,000,000 initial equity investment). This amount, less any
outstanding and unpaid Principal Amount and unpaid interest accrued
thereon with respect to Note 1, shall be paid to Employee at the
Closing. If the Fair Market Value of Employee's Interests is less than
the outstanding and unpaid Principal Amount and unpaid interest accrued
thereon under Note 1, any shortfall shall be withheld and offset from
the monthly bonus payments under Paragraph 1(c).
7. For and in consideration of the payments and benefits described above
in Paragraph 1 to be paid by Grove, the sufficiency of which Employee
hereby acknowledges, Employee agrees (for Employee, his heirs,
executors, administrators, personal representatives and assigns) that
he will, and hereby does, forever and irrevocably release and discharge
the Members (as defined in the LLC Agreement), Grove, its parents,
subsidiaries, affiliates and its and their respective officers,
directors, employees, agents, predecessors, successors, purchasers,
assigns, and representatives (hereinafter referred to as Releasees), of
and from any and all actions, causes of action, claims, demands,
grievances, damages, costs, expenses, compensation , and all
incidental, consequential, or special damages, which he now has, has
had, or may have up to and including the date Employee signs this
Agreement, whether the same be at law, in equity, or mixed, on account
of or in any way arising out of (i) Employee's ownership interest in
Grove Investors LLC; or (ii) Employee's employment relationship with
Grove, including but not limited to his separation from employment with
Grove.
THIS IS A GENERAL RELEASE. EMPLOYEE EXPRESSLY ACKNOWLEDGES THAT THIS GENERAL
RELEASE INCLUDES, BUT IS NOT LIMITED TO, ANY AND ALL CLAIMS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF
1990, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE OLDER WORKERS BENEFIT
PROTECTION ACT, THE EMPLOYEE RETIREMENT INCOME SECURITY ACT, THE PENNSYLVANIA
HUMAN RELATIONS ACT, AND ANY OTHER FEDERAL, STATE OR LOCAL LAW, REGULATION OR
ORDINANCE, AND/OR PUBLIC POLICY HAVING ANY BEARING WHATSOEVER ON THE TERMS AND
CONDITIONS AND/OR SEPARATION FROM EMPLOYEE'S EMPLOYMENT WITH GROVE OR EMPLOYEE'S
OWNERSHIP INTEREST IN GROVE INVESTORS LLC.
8. Employee hereby represents and warrants that there are no actions of
Employee pending against Grove or any benefit plans of Grove, and
Employee agrees not to institute a lawsuit against any of the Releasees
in any court of the United States or any State thereof based upon or
relating to Employee's employment with Grove, the termination of
Employee's employment with Grove, or the Employee's ownership interest
in Grove Investors LLC. Notwithstanding any other language in this
Agreement, the parties understand that this Agreement does not prohibit
Employee from filing an administrative charge of alleged employment
discrimination under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Americans With
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Salvatore J. Bonanno
Page 5
Disabilities Act of 1990 or the Equal Pay Act of 1963. Employee,
however, waives his right to monetary or other recovery should any
federal, state or local administrative agency pursue any claims on his
behalf arising out of or relating to his employment with and/or
separation from employment with Grove or any of the other Releasees.
THIS MEANS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE WILL HAVE WAIVED ANY RIGHT
HE HAD TO BRING A LAWSUIT OR OBTAIN A RECOVERY IF AN ADMINISTRATIVE AGENCY
PURSUES A CLAIM AGAINST GROVE OR ANY OF THE RELEASEES BASED ON ANY ACTIONS TAKEN
BY ANY OF THE RELEASEES UP TO THE DATE OF THE SIGNING OF THIS AGREEMENT, AND
THAT EMPLOYEE WILL HAVE RELEASED THE RELEASEES OF ANY AND ALL CLAIMS OF ANY
NATURE ARISING UP TO THE DATE OF THE SIGNING OF THIS AGREEMENT.
9. Employee agrees not to institute or to join in any lawsuit against
Grove or any Releasees concerning any matter within the scope of this
Agreement.
10. Employee further acknowledges and agrees that Grove's agreement to
provide the consideration contained in this Agreement is not to be
construed as an admission of any liability on the part of Grove or
Releasees, by whom any liability is expressly denied.
11. Employee agrees to maintain and keep all written and oral business
information, know-how, technical information, proprietary data and
information (including Grove's patents and know-how), and all other
confidential information of and concerning Grove and its parents,
subsidiaries and affiliates (hereinafter "Information"), entirely
confidential, and further agrees not to divulge same to any third party
at any time after departure from employment at Grove. All such
Information is and shall remain the exclusive property of Grove at all
times. Employee agrees that Employee will return and deliver to Grove
all confidential and proprietary information Employee received during
his employment with Grove. In addition, Employee agrees that a
violation of the terms of this Paragraph 11 regarding the
confidentiality of such Information is a material breach of this
Agreement, for which Grove may immediately seek legal, equitable,
injunctive, monetary, or any other appropriate relief in a court of
competent jurisdiction.
12. The Employee recognizes that the services performed by him were
special, unique and extraordinary and that, by reason of his employment
with Grove, he acquired confidential information and trade secrets
concerning the operation of Grove. Accordingly, for all purposes
hereunder or in respect hereof, the Employee agrees that during the
term of his employment and for a period of twelve (12) months following
his termination from employment he will not, directly or indirectly, as
an officer, director, stockholder, partner, member, associate,
employee, consultant, owner, agent, creditor, co-venturer or otherwise,
become or be interested in or be associated with any other corporation,
firm or business engaged, in any geographical area in which Grove is
engaged during the term of his employment or at the date of his
termination from employment, in a "Competitive Business" with that of
Grove at such time. A Competitive Business shall mean any business
which derives 30% or more of its revenue directly or indirectly from
designing, manufacturing, selling and/or providing customer support
for, mobile hydraulic cranes,
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Salvatore J. Bonanno
Page 6
self-propelled aerial work platforms and truck-mounted cranes. The
Employee's ownership, directly or indirectly, of not more than five
percent (5%) of the issued and outstanding stock of any corporation,
the shares of which are regularly traded on a national securities
exchange or in the over-the-counter market, shall not in any event be
deemed to be a violation of the provisions hereof and the ownership of
securities by the Employee of Grove shall not be deemed to be a
violation hereof. Employee further agrees that a violation of the terms
of this Paragraph 12 regarding non-competition is a material breach of
this Agreement, for which Grove may immediately seek legal, equitable,
injunctive, monetary, or any other appropriate relief in a court of
competent jurisdiction.
13. The Employee agrees, during the twelve (12) months following his
termination of employment, that he shall not, on behalf of himself or
any business he is interested in or associated with, employ or
otherwise engage, or seek to employ or engage, any employee (Manager
level or above) of Grove.
14. Employee agrees that the terms, provisions, and conditions of this
Agreement and the negotiations in pursuance thereof, are strictly
confidential and have not been and shall not be disclosed to any other
person or entity, except as required by law or by court order. Employee
agrees he will not make any statement or otherwise engage in any
communication (whether written or oral) which in any way disparages or
denigrates Grove or any of its subsidiaries or affiliates, their
former, present or future managements, products or business prospects.
Employee further agrees that a violation of the terms of this Paragraph
14 regarding the confidentiality of this Agreement is a material breach
of this Agreement, for which Grove may immediately seek legal,
equitable, injunctive, monetary, or any other appropriate relief in a
court of competent jurisdiction.
15. Employee hereby expressly warrants and represents to Grove that (a)
before executing this Agreement, Employee has fully informed himself of
its terms, contents, conditions, and effect; (b) in accepting this
offer and release, Employee has had the benefit of the advice of legal
counsel of his own choosing; (c) no promises or representations of any
kind or character have been made to Employee by Grove or by anyone
acting for Grove, except for those representations which expressly are
referred to herein; (d) Employee fully understands that this is a full,
complete, and final release; and (e) Employee enters into this
Agreement voluntarily and of his own free will.
16. Employee hereby acknowledges and agrees that this Agreement contains
the entire agreement and understanding between Employee and Grove, that
there are no additional promises or terms between Employee and Grove
other than those contained herein, that the terms of this instrument
are contractual in nature and not mere recitals, and that this
Agreement shall not be modified except in writing signed by each of the
parties.
17 This Agreement shall be binding upon, and inure to the benefit of,
Employee and his assigns, heirs, executors, personal representatives,
and administrators, and Grove and its
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Salvatore J. Bonanno
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parents, subsidiaries, affiliates, and its and their officers,
directors, employees, agents, predecessors, successors, purchasers,
assigns, and representatives.
18. This Agreement shall in all respects be interpreted, enforced, and
governed under the laws of the State of Pennsylvania. The language of
all parts of this Agreement shall in all cases be construed as a whole,
according to the language's fair meaning, and not strictly for or
against any of the parties. If any terms of this Agreement are found
null, void, or inoperative for any reason, the remaining provisions
will remain in full force and effect, at Grove's sole option.
19. Grove hereby advises Employee to consult with an attorney, at
Employee's own expense, prior to executing this Agreement.
20. Employee understands that he has twenty-one (21) days from the date of
his receipt of this Agreement to consider his decision to sign it, and
that if he chooses to execute this Agreement less than twenty-one (21)
days after receiving it, that is a voluntary choice by him, not
demanded or requested by Grove. By signing this Agreement, Employee
expressly acknowledges that his decision to sign this Agreement was of
his own free will.
21. Employee acknowledges that he may revoke this Agreement for up to and
including seven (7) days after he signs this Agreement and that this
Agreement shall not become effective until the expiration of seven (7)
days from the date of execution of the Agreement. Notice of revocation
shall be given to Keith R. Simmons, Senior Vice President General
Counsel and Human Resources, located at Grove Worldwide LLC, principal
office at 1565 Buchanan Trail East, Shady Grove, Pennsylvania
17256-0021.
IN WITNESS WHEREOF, this Severance Agreement and General Release is duly signed,
as of the date first set forth above in two (2) counterparts, each of which
being deemed to be an original of this Agreement.
EMPLOYEE: WITNESS:
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Salvatore J. Bonanno Signature of Witness
Date: Date:
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Severance Agreement and General Release
Salvatore J. Bonanno
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GROVE WORLDWIDE LLC GROVE INVESTORS LLC
By: By:
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Keith R. Simmons Keith R. Simmons
Title: Senior Vice President Title: Vice President and Secretary
General Counsel and Human Resources
Date:
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