February 21, 1995
Mr. James B. Painter
2923 Homewood Drive
Troy, Michigan 48098-1785
Dear Jim:
Our discussions with you over the past several weeks have left all of
us with a very positive impression of your experience base,
knowledge, personal qualities and sense of commitment. Accordingly,
I am delighted to extend to you an offer of employment as Vice
President of both the Heavy Duty Products Group and the Materials
Management function. This assignment will make you a Corporate
Officer of Simpson Industries, Inc. In this position you will be
reporting directly to me as President and CEO. The terms and
conditions of the offer are as follows:
Salary: $150,000 Annually
Bonus Guarantee:
Within the first thirty days of employment with Simpson Industries,
you will receive a lump sum payment of $36,200. This is in lieu of
the bonus payment and savings plan match you forfeit by your mid-year
departure from your current employer. This amount is subject to all
applicable federal and state taxes.
Relocation Assistance:
Assistance is available to you to cover the cost of fulfilling your
lease requirements on your apartment in Newark, Ohio. This
assistance includes breaking your existing lease and the loss of a
security deposit. The Company will also pay for the transfer of your
furnishings in this apartment back to your home in Troy, Michigan.
Vacation:
Officers are entitled to four weeks of vacation per year.
COBRA
Simpson will reimburse the COBRA expenses you incur prior to becoming
eligible for the Simpson Health Care Plan.
Short-Term Incentive Plan:
Upon your first day of employment, you will participate (subject to
the approval of the Board of Directors) in the Company's Short-Term
Incentive Plan. Participation will be in the top tier of the plan
(Tier I), which has a target annual bonus of 50% and a maximum annual
bonus of 75%.
Long-Term Incentive Plan:
You will qualify for participation in the Company's Long-Term
Incentive Plan. Effective with the Board of Directors approval, 4,000
shares of Restricted Stock will be granted to you, subject to the
terms and conditions of the Simpson Industries 1993 Long-Term
Incentive Plan.
Under this plan you will be eligible for annual stock option grants
and awards of "restricted stock." Subject to Board approval, future
awards will be granted in the first quarter of 1996.
Executive Lease Car Program:
You will be eligible for one vehicle under the terms and conditions
of the Executive Lease Car Program.
Comprehensive Health Plan:
You will be eligible to participate in the Simpson Industries
Medical/Dental plan, including a company funded flexible spending
account. Eligibility for this plan commences after three months of
employment. After completing three months of employment you will be
eligible to receive a prorated flexible spending account benefit (the
annual benefit is $600/family). After 1995 the flexible spending
account benefit will be discontinued.
Short-Term Disability:
Employees with less than two years of service are eligible for three
months of salary continuation. Employees with two or more years of
service receive a full year of benefits, which are reduced each
ninety days to a benefit of 70% in the last quarter of the year.
The period between three months of salary continuation under the
Short Term Disability Plan and the onset of Long-Term Disability
benefits will be covered at 90% of base pay subject to all applicable
federal and state taxes.
Long-Term Disability:
If you are totally and permanently disabled after a year of
short-term benefits, long-term disability benefits begin for
employees with two or more years of service. For employees with less
than two years of service, long term disability benefits begin after
six months of total disability. The plan will and any social
security and Workers' Compensation benefits when added together
provide 60% of base salary up to a maximum monthly benefit income of
$8,000.
Life Insurance:
The Company will contribute an annual premium amount to provide you
with life insurance equal to two times your base salary as of
September 30th of each year. You select the amount of coverage
desired (subject to simplified issue for amounts over $150,000) and
determine whether or not to supplement the premium amount to provide
additional annuity buildup. Eligibility for this benefit commences
on the first day of the month following one month of employment.
The policy is owned by the employee and goes with them when leaving
the Company.
Travel Accident Policy:
This policy also commences on the first day of the month following
one month of employment and provides up to $200,000 if the employee
is killed or permanently injured within one year from the date of an
accident during business travel.
Survivor Income Benefits:
The survivor income benefit, or SIB, provides that any employee who
has been at Simpson for one month is covered under the plan. Your
spouse or eligible children will receive monthly benefits equal to
50% of base pay. The Company benefit and any social security
benefits your family might be eligible for when added together make
up the 50% of pay your family receives from this plan. Payments will
continue for ten years or until your spouse reaches age 62, whichever
occurs first.
Pension:
The pension plan is a defined benefit plan and is based on career
average earnings. Benefits are calculated as follows:
1.70% of annual pay to $36,270* (for each year of service)
plus 2.05% of annual pay over $36,270* (for each year of service)
*Will change annually along with changes in the average national
wage.
Normal retirement is at age 65 with 5 years of vested service. This
benefit becomes vested after five years of service.
Supplemental Executive Retirement Plan:
Provides supplemental retirement benefit equal to 4% per year of
officer service (maximum 15 years) times average of highest three of
last five years of service, reduced by: 1) early retirement if under
65; 2) social security benefit; 3) pension benefits from previous
employers; and 4) benefit from Simpson Defined Benefit Plan.
Benefits under this plan become vested after completion of five years
of service.
Savings Plan:
The Company provides a Savings Plan with a 401(k) feature that allows
contributions by the participant of up to 25% of base pay. The first
6% is eligible for a Company match of not less than 25 cents on the
dollar, to a maximum of $1.00, depending on the Company performance.
Eligibility for plan participation commences on the first on the
month following three months of employment.
Change of Control Agreement:
In the event your employment is terminated as a result of a change in
control of the Company, your salary and benefits will be extended for
up to 24 months. This benefit and its terms and conditions are
subject to the discretion of the Board of Directors.
Severance:
In the event your employment is severed within an 18-month period
beginning April 1, 1995, for any reason other than "just cause,"
Simpson Industries, Inc. will provide 12 months of base salary,
benefits and outplacement service. These benefits would be
discontinued if you obtain other employment.
Jim, I and the other members of our management team are looking
forward to your joining Simpson Industries, on or before April 1,
1995. We are confident that you will make a significant contribution
to the Company's success and at the same time have an opportunity for
both personal and professional growth and reward.
If this accurately reflects your understanding of the offer and if
these terms and conditions are agreeable to you, please sign the
original copy of this letter and return it to me.
On behalf of myself and the Board of Directors, Jim, we look forward
to welcoming you to Simpson Industries.
Best Regards,
/s/ ROY E. PARROTT
Roy E. Parrott
/S/ JAMES B. PAINTER 2/22/95
James B. Painter Date