Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of June 21,
2004 (the "Effective Date"), by and among Micron Holdings, Inc., a Delaware
corporation (the "Company"), Autocam Corporation, a Michigan corporation
("Autocam"), Titan Holdings Inc., a Delaware corporation ("Titan") and John C.
Kennedy (the "Executive").
WHEREAS, the Company, Titan, and Micron Merger Corporation, a
Delaware corporation and a wholly owned subsidiary of the Company ("Acquisition
Sub"), have entered into an Agreement and Plan of Merger, dated as of May 1,
2004 (the "Merger Agreement"), pursuant to which, at the Effective Time (as
defined in the Merger Agreement), Acquisition Sub shall merge with and into
Titan (the "Merger");
WHEREAS, the Executive is currently serving as the President of
Titan and the Chief Executive Officer of Autocam;
WHEREAS, the Company desires to enlist the services of the Executive
as Chairman, Chief Executive Officer and President of the Company, Titan and
Autocam following the Effective Time, and the Executive is willing to serve as
Chairman, Chief Executive Officer and President of the Company, Titan and
Autocam on the terms and conditions set forth herein; and
WHEREAS, the Company and the Executive desire to formalize the terms
and conditions of the Executive's employment pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment Term. Subject to Section 5 hereof, the Company hereby
agrees to employ the Executive, and the Executive hereby agrees to be employed
by the Company, subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and expiring on the third anniversary of
the Effective Date; provided, that on the third anniversary of the Effective
Date and on each anniversary of such date (each, an "Extension Date"), the
Employment Term shall be automatically extended for an additional one-year
period unless the Company or the Executive provides the other party hereto with
ninety (90) days' prior written notice before the next Extension Date that the
Employment Term shall not be so extended (such period of employment hereunder,
the "Employment Term").
2. Title; Duties; Place of Employment. During the Employment Term,
the Executive shall serve as Chairman, Chief Executive Officer and President of
the Company, Titan and Autocam. In such capacities, the Executive shall perform
such duties, services and responsibilities as are commensurate with the
Executive's position, as well as such duties, services and responsibilities on
behalf of the Company and its subsidiaries and affiliates (collectively, the
"Company Affiliated Group"), in each case as may be determined from time to time
by the Board of Directors of the Company (the "Board"). In performing such
duties hereunder, the Executive shall report directly to the Board. The
Executive shall devote his
business time, attention and skill to the performance of the Executive's duties,
services and responsibilities hereunder and shall promote the businesses and
interests of the Company Affiliated Group; provided, that the Executive may
devote business time to (i) continue to be involved in those business ventures
set forth on Exhibit A hereto, (ii) become involved in such other business
ventures as are approved by the Board, (iii) engage in charitable and community
activities and (iv) manage personal and family investments and affairs, so long
as any activities of the Executive which are within the scope of the foregoing
clauses (i), (ii), (iii) or (iv) do not interfere in any material respect with
the performance of the Executive's duties hereunder. The Executive's principal
place of employment shall be the headquarters of Autocam on the Effective Date,
except for travel as reasonably required by the Company and consistent with the
Executive's business travel requirements with Autocam prior to the Effective
Date.
3. Compensation. During the Employment Term, in full consideration
of the performance by the Executive of the Executive's obligations hereunder to
the Company and the other members of the Company Affiliated Group, the Company
shall cause the Executive to be paid the following compensation:
(a) Base Salary. The Executive shall receive a base salary at an
annual rate of $500,000 (the "Base Salary"). The Base Salary shall be payable in
accordance with normal payroll practices in effect from time to time, but not
less than monthly. The Base Salary shall be reviewed periodically by the Company
for increase (but not decrease), and the term "Base Salary" shall include any
such increase.
(b) Annual Bonus. For each calendar year ending during the
Employment Term (pro rata for partial calendar years), the Company shall provide
the Executive with the opportunity to earn a target annual performance bonus
equal to 60% of his Base Salary (the "Target Bonus"). The performance goals
shall be as reasonably agreed to by the Executive and the Company within thirty
days after the beginning of each calendar year (thirty days after the Effective
Date for 2004) and shall be based upon the Company's business plan as approved
by the Board for the applicable year.
4. Benefits.
(a) During the Employment Term, the Executive shall be entitled to
(i) participate in such employee and fringe benefit plans, policies, programs
and arrangements of the Company Affiliated Group as are made available to senior
management of the Company from time to time (the "Benefit Plans") and (ii)
reimbursement for reasonable business expenses incurred by the Executive in
accordance with the Company's expense reimbursement policy as in effect from
time to time.
(b) During each calendar year during the Employment Term (pro rata
for partial calendar years), the Executive shall also be entitled to paid
vacation of not less than four weeks in accordance with the Company's vacation
policy and a sabbatical pursuant to the Company's sabbatical program, each as in
effect from time to time.
-2-
(c) The Company shall forgive all of the loans owing by the
Executive to the Company under the split dollar insurance policies listed on
Exhibit B hereto (the "Policies") and the promissory notes and all other
documentation representing any repayment obligation of Executive to the Company
with respect to such loans and the Policies shall be cancelled immediately
following the Effective Time and delivered to Executive on the Effective Date.
Effective as of the Effective Date, the Executive shall be responsible for
making all future premium payments under the Policies.
5. Termination.
(a) The Employment Term and, unless the parties agree otherwise, the
Executive's employment with the Company shall terminate upon the expiration of
the Employment Term or upon the earlier occurrence of any of the following
events (the date of termination, the "Termination Date"):
(i) The death of the Executive.
(ii) The termination of the Executive's employment by the Company
for Cause. For purposes of this Agreement, "Cause" shall mean (i) the willful
and continued failure by the Executive to substantially perform the Executive's
duties on behalf of the Company or any member of the Company Affiliated Group
(other than any such failure resulting from the Executive's incapacity due to
physical or mental illness) after a written demand for substantial performance
has been delivered to the Executive by the Board, which demand specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive's duties, (ii) willful misconduct or gross
negligence by the Executive which is demonstrably and materially injurious to
the Company or any member of the Company Affiliated Group (including, without
limitation, the Executive's breach of Section 7 hereof) or (iii) the Executive
is convicted of, or has entered a plea of nolo contendere to, (x) a felony
(other than a traffic violation) or (y) any crime (whether or not a felony)
involving dishonesty, fraud, embezzlement or breach of trust. For purposes of
clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the
Executive's part shall be deemed "willful" or "grossly negligent" unless done,
or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Company, and (y) the Executive shall not be deemed to have been terminated
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
two-thirds of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice to the Executive and
an opportunity for the Executive, together with the Executive's counsel, to be
heard before the Board at such meeting), finding in good faith that the
Executive has committed Cause as set forth in such clauses and specifying the
circumstances constituting Cause.
(iii) The termination of the Executive's employment by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:
(a) a material breach by the Company of this Agreement;
-3-
(b) the assignment of duties or responsibilities to the
Executive that are inconsistent with the Executive's position as Chairman, Chief
Executive Officer and President of each of the Company, Titan and Autocam or a
material diminution in the nature or status of the Executive's responsibilities
as Chairman, Chief Executive Officer and President of each of the Company, Titan
and Autocam;
(c) the relocation of the headquarters of Autocam by more than
thirty-five miles or the relocation of the Executive's principal place of
employment to a location other than the headquarters of Autocam;
(d) (x) a reduction in the Executive's Base Salary or Target
Bonus or (y) the failure of the Company to provide the Executive with or cause
the Executive to be provided with employee benefits (other than paying premiums
in respect of split dollar life insurance) that are substantially comparable to
those provided to the Executive on the Effective Date other than, in the case of
clause (y), across-the-board reductions applicable to all executives of the
Company;
(e) the failure of the Company to require any successor (as
contemplated in Section 12) to assume this Agreement, except where such
assumption occurs by operation of law; or
(f) delivery to the Executive by the Company of a notice of
non-extension of the Employment Term.
provided, however, that the Executive must provide the Company with notice
within thirty days following the first date on which the Executive knows or
should reasonably know of the occurrence of an event or action constituting Good
Reason and the Company shall have fifteen days to cure such event or action.
(iv) The termination of the Executive's employment by the Company
by reason of the Executive's Disability. For purposes of this Agreement,
"Disability" shall have the meaning under the long-term disability plan
applicable to the Executive, as in effect from time to time, or, if no such plan
is in effect, shall mean that (i) the Executive has been unable to perform the
Executive's duties, services and responsibilities hereunder by reason of a
physical or mental infirmity for 180 consecutive days or a total of 210 days in
any twelve month period during the Employment Term, and (ii) a physician
selected by the Company and the Executive or the Executive's legal
representative has determined that the Executive is totally and permanently
disabled. In the event that the Executive and the Company cannot agree as to a
physician to make such a determination, each shall appoint a physician and those
two (2) physicians shall select a third who shall make such determination in
writing.
(v) The termination of the Executive's employment by the Company
without Cause.
(b) In the event of termination of the Executive's employment for
any reason other than death or Disability, the Executive agrees to be reasonably
available to consult with members of the Company Affiliated Group with respect
to matters arising out of the Executive's
-4-
employment hereunder.
(c) Upon termination of the Executive's employment for any reason,
the Executive shall be deemed to have resigned from all positions (as an
employee, officer or director) with each member of the Company Affiliated Group;
provided, however, that nothing in this Section 5(c) shall be deemed to affect
rights that the Executive may have pursuant to the Stockholders' Agreement by
and among the Company, the Executive, the GSCP Parties (as defined therein) and
the TRP Parties (as defined therein), dated as of June 21, 2004 (the
"Stockholders' Agreement") (including, without limitation, the right to
designate one or more individuals to serve on the Board and the Executive (or
his designee(s)) shall not be deemed to have resigned from any position of
director as to which the Executive is entitled to designate such director
thereunder).
(d) Notice of the Executive's termination of employment by the
Executive or by the Company shall be provided by means of a written notice of
termination of the Executive's employment, signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive,
which indicates the specific termination provision in this Agreement, if any,
relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. The failure by the Executive or the
Company to set forth in such notice any fact or circumstance which contributes
to a showing of Good Reason, Disability or Cause shall not serve to waive any
right of the Executive or the Company, respectively, hereunder or preclude the
Executive or the Company, respectively, from asserting such fact or circumstance
in enforcing the Executive's or the Company's rights hereunder. A notice of
termination shall provide for at least thirty days between the date that such
notice is delivered and the Termination Date specified therein, provided, that
so long as the Company has complied with the last sentence of Section 5(a)(ii)
hereof, a notice of termination by the Company for Cause may provide for a
shorter period or no period between the date that such notice is delivered and
the Termination Date specified therein.
6. Termination Payments.
(a) If the Executive's employment with the Company terminates for
any reason, the Company shall cause the Executive to be paid, within five
business days following the Termination Date, in a single lump sum in cash, (x)
any earned and unpaid Base Salary as of the Termination Date, (y) reimbursement
of any unreimbursed business expenses properly incurred on or prior to the
Termination Date and (z) such other benefits to which the Executive may be
entitled as a terminated employee under the Benefit Plans (the "Accrued
Compensation").
(b) (i) If during the Employment Term (x) the Executive terminates
his employment with the Company for Good Reason pursuant to Section
5(a)(iii)(a), (b), (c), (d), or (e) hereof or (y) the Company terminates the
Executive's employment without Cause pursuant to Section 5(a)(v) hereof, the
Company shall cause the Executive to be paid, within five business days
following the Termination Date, in a single lump sum in cash, (1) an amount
equal to 1.5 times the sum of the Executive's Base Salary and Target Bonus, in
each case as in effect
-5-
immediately prior to the Termination Date and (2) an amount equal the Target
Bonus as in effect immediately prior to the Termination Date multiplied by a
fraction, the numerator of which is the number of days elapsed from the
beginning of the calendar year in which the termination occurs through the
Termination Date and the denominator of which is 365.
(ii) If during the Employment Term the Executive terminates his
employment with the Company for Good Reason pursuant to Section 5(a)(iii)(f)
hereof, the Company shall cause the Executive to be paid, within five business
days following the Termination Date, in a single lump sum in cash, (1) the sum
of the Executive's Base Salary and Target Bonus, in each case as in effect
immediately prior to the Termination Date and (2) the Target Bonus as in effect
immediately prior to the Termination Date multiplied by a fraction, the
numerator of which is the number of days elapsed from the beginning of the
calendar year in which the termination occurs through the Termination Date and
the denominator of which is 365.
(c) Notwithstanding any other provision of this Agreement (but
subject to Section 20 hereof), no Severance Payment shall become payable under
this Agreement, taking into account Section 6(d) hereof, unless and until the
Executive executes a general release of claims substantially in the form
attached as Exhibit C hereto. The Severance Payment shall constitute the
exclusive payments in the nature of severance or termination pay which shall be
due to the Executive upon a termination of employment without Cause or for Good
Reason and shall be in lieu of any other such payments under any plan, program,
policy or other arrangement which has heretofore been or shall hereafter be
established by any member of the Company Affiliated Group; provided, that
nothing in this Agreement shall be construed to enlarge or diminish the rights
of the Executive or the Company applicable upon and following the Executive's
termination of employment under any other agreement to which they are parties,
including, without limitation, the Stockholders' Agreement. The Executive shall
have no obligation to mitigate any amounts payable to the Executive under this
Agreement, whether by seeking employment or otherwise, and the amount of any
payment or benefit due the Executive shall not be reduced or offset by any
payment or benefit that the Executive may receive from any other source.
(d) Anything in this Agreement to the contrary notwithstanding (but
subject to Section 20 hereof), in the event it shall be determined that any
payment or distribution, or any acceleration thereof, by the Company or any
member of the Company Affiliated Group (or any entity whose actions result in a
change in the ownership, effective control or a change in the ownership of a
substantial portion of the assets (as such terms are interpreted in the
regulations promulgated under Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code")) of any member of the Company Affiliated Group) to or
for the benefit of the Executive paid or payable, distributed or distributable
or accelerated or subject to acceleration pursuant to the terms of this
Agreement, but determined without regard to any additional payments required
under this Section 6(d) (a "Payment") would be subject to the excise tax imposed
by Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes imposed upon the Gross-Up Payment and any interest or
penalties imposed
-6-
with respect to such taxes, the Executive retains an amount of the Gross-Up
Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y)
the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in the Executive's adjusted gross income and the highest
applicable marginal rate of federal income taxation for the calendar year in
which the Gross-Up Payment is to be made; provided, that in the event that the
Executive becomes subject to the Excise Tax by reason of any payment, vesting or
distribution, or any acceleration thereof, arising by reason of any agreement,
arrangement or understanding between the Executive and any member of the Company
Affiliated Group other than this Agreement (whether alone or in connection with
payments, distributions or accelerations under this Agreement), including,
without limitation, in respect of equity granted by any member of the Company
Affiliated Group to the Executive at any time following the date hereof, no
Gross-Up Payment shall be payable under this Section 6(d). For purposes of
determining the amount of the Gross-Up Payment (if any), the Executive shall be
deemed to (A) pay federal income taxes at the highest marginal rates of federal
income taxation for the calendar year in which the Gross-Up Payment is to be
made, (B) pay applicable state and local income taxes at the highest marginal
rate of taxation for the calendar year in which the Gross-Up Payment is to be
made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes and (C) have otherwise
allowable deductions for federal income tax purposes at least equal to those
which could be disallowed because of the inclusion of the Gross-Up Payment in
the Executive's adjusted gross income.
Subject to the succeeding provisions of Section 6(d), all determinations
required to be made under this Section 6(d), including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
the accounting firm that is retained by the Company as of the date immediately
prior to the change in the ownership, effective control or a change in the
ownership of a substantial portion of the assets of the Company (the "Accounting
Firm") which shall provide detailed supporting calculations both to the Company
and the Executive within fifteen business days of the receipt of notice from the
Company or the Executive that there has been a Payment, or such earlier time as
is requested by the Company (collectively, the "Determination"). In the event
that the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the change, the Executive may appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company and the Company shall enter into any agreement requested
by the Accounting Firm in connection with the performance of its services
hereunder. The Gross-Up Payment under this Section 6(d) with respect to any
Payment shall be made no later than thirty days following such Payment. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion to such effect, and to the
effect that failure to report the Excise Tax, if any, on the Executive's
applicable federal income tax return will not result in the imposition of a
negligence or similar penalty. The Determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the Determination, it
is possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment") or Gross-Up Payments are made by the
Company which should not have been made ("Overpayment"),
-7-
consistent with the calculations required to be made hereunder. In the event
that the Executive thereafter is required to make payment of any additional
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the
Company to or for the benefit of the Executive. In the event the amount of the
Gross-Up Payment exceeds the amount necessary to reimburse the Executive for his
Excise Tax, the Accounting Firm shall determine the amount of the Overpayment
that has been made and any such Overpayment (together with interest at the rate
provided in Section 1274(b)(2) of the Code) shall be promptly paid by the
Executive to or for the benefit of the Company. The Executive shall cooperate,
to the extent his expenses are reimbursed by the Company, with any reasonable
requests by the Company in connection with any contests or disputes with the
Internal Revenue Service in connection with the Excise Tax.
7. Executive Covenants.
(a) Unauthorized Disclosure. The Executive agrees and understands
that in the Executive's position with the Company, the Executive has been and
will be exposed to and has and will receive information relating to the
confidential affairs of the Company Affiliated Group, including, without
limitation, technical information, intellectual property, business and marketing
plans, strategies, customer information, software, other information concerning
the products, promotions, development, financing, expansion plans, business
policies and practices of the Company Affiliated Group and other forms of
information considered by the Company Affiliated Group to be confidential and in
the nature of trade secrets (including, without limitation, ideas, research and
development, know-how, formulas, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information and
business and marketing plans and proposals) (collectively, the "Confidential
Information"). Notwithstanding the foregoing, Confidential Information shall not
include any and all information readily available to the public (other than as a
result of the Executive's unauthorized disclosure). The Executive agrees that at
all times during the Executive's employment with the Company and thereafter, the
Executive shall not disclose such Confidential Information, either directly or
indirectly, to any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof
(each a "Person"), without the prior written consent of the Company and shall
not use or attempt to use any such information in any manner other than in
connection with the Executive's employment with the Company, unless required by
law to disclose such information, in which case the Executive shall provide the
Company with written notice of such requirement as far in advance of such
anticipated disclosure as possible so as to enable the Company to seek an
appropriate protective order or confidential treatment. This confidentiality
covenant has no temporal, geographical or territorial restriction. Upon
termination of the Executive's employment with the Company, the Executive shall
promptly supply to the Company all property, keys, notes, memoranda, writings,
lists, files, reports, customer lists, correspondence, tapes, disks, cards,
surveys, maps, logs, machines, technical data and any other tangible product or
document which has been produced by, received by or otherwise submitted to the
Executive during or prior to the Executive's employment with the Company or any
member of the Company Affiliated Group, and any copies thereof in the
Executive's (or capable of being reduced to the Executive's) possession.
-8-
(b) Non-Competition. By and in consideration of the Company's
entering into this Agreement and the payments to be made and benefits to be
provided by the Company hereunder, and in further consideration of the
Executive's exposure to the Confidential Information of the Company Affiliated
Group, the Executive agrees that the Executive shall not, during the Executive's
employment with the Company (whether during the Employment Term or thereafter)
and for a two-year period thereafter (the "Restriction Period"), directly or
indirectly, be, own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of, or be
connected in any manner with, including, without limitation, holding any
position as a stockholder, director, officer, consultant, independent
contractor, employee, partner, or investor in, any Restricted Enterprise (as
defined below), provided, however, that (A) any investments in the Executive's
portfolio that are managed by a third party professional investment manager that
is not affiliated with or related to the Executive (an "IM") shall not violate
this Section 7(b) so long as the decisions to make such investments are made
exclusively by the IM without any participation or direction by the Executive
and the Executive is not in any way involved in the management or operation of
the business conducted by such investment and does not otherwise provide any
services or advice to the business or to the IM with respect to such investment
(the "IM Exception"), provided that the IM Exception shall not apply to an
investment managed or to be managed by an IM that, at the time such investment
is made by the Executive, whether through a mutual fund, hedge fund, limited
partnership, collective investment vehicle or otherwise (collectively, "Fund
Investment"), directly or indirectly is an investment in a Restricted Enterprise
and where, in the case of a Fund Investment, the Executive's interest in the
investment is deemed to be more than three percent of the outstanding securities
of any class of the issuer; and (B) any investment by Bridge Street Capital Fund
I ("Bridge Street") in a Restricted Enterprise shall not violate this Section
7(b) if (i) the investment was initially identified by the Executive on behalf
of Bridge Street, the Executive provides the Company a reasonable opportunity to
make the investment, and the Company decides not to make the investment or (ii)
the investment is one that was not initially identified by the Executive on
behalf of Bridge Street and the Executive does not participate in managing or
providing advisory services at any time with respect to such investment once
made; and (C) in no event shall ownership of three percent or less of the
outstanding securities of any class of any issuer the securities of which are
registered under the Securities Exchange Act of 1934, as amended, standing
alone, be prohibited by this Section 7(b), so long as the Executive does not
have, or exercise, any rights to manage or operate the business of such issuer
other than rights as a stockholder thereof. For purposes of this Section 7(b),
an investment by the Executive in a Fund Investment shall be deemed to be an
investment by the Executive in the securities or other property then held in
such Fund Investment based on the Executive's proportionate interest in such
Fund Investment. For purposes of this Section 7(b), "Restricted Enterprise"
shall mean, at any given time during the Restriction Period, (x) if the
Executive is then a stockholder of the Company, any Person whose engagement in
the precision machining industry anywhere in the United States of America is a
core business activity of such Person or any of such Person's affiliates and any
Person that is a customer of any member of the Company Affiliated Group and the
affiliates of such Person or (y) if the Executive is not then a stockholder of
the Company, any Person that is engaged, directly or indirectly, in (or intends
or proposes to engage in, or has been organized for the purpose of engaging in)
the precision machining industry anywhere in the United States of America and
any Person that is a customer of any member of the Company Affiliated Group and
the affiliates of such Person. During the two-year period following the
-9-
termination of the Executive's employment with the Company, upon request of the
Company, the Executive shall notify the Company of the Executive's then-current
employment status.
(c) Non-Solicitation of Employees. During the Restriction Period,
the Executive shall not directly or indirectly, other than pursuant to general
non-targeted advertisements, contact, induce or solicit (or assist any Person to
contact, induce or solicit) for employment, other than on behalf of the Company
Affiliated Group, any person who is, or within twelve (12) months prior to the
date of such solicitation was, an employee of any member of the Company
Affiliated Group.
(d) Non-Solicitation of Customers. During the Restriction Period,
the Executive shall not, other than pursuant to general non-targeted
advertisements, (i) contact, induce or solicit (or assist any Person to contact,
induce or solicit) any Person which has a business relationship with any member
of the Company Affiliated Group to terminate, curtail or otherwise limit such
business relationship, or (ii) solicit, other than on behalf of the Company
Affiliated Group, any Person that the Executive knows or should have known (x)
is a current customer of any member of the Company Affiliated Group, (y) was,
within twelve (12) months prior to the date of such solicitation, a customer of
any member of the Company Affiliated Group or (z) is a Person with respect to
which the Company or any member of the Company Affiliated Group has, within the
twelve (12) months prior to the date of such solicitation, devoted more than de
minimis resources in an effort to cause such Person to become a customer of any
member of the Company Affiliated Group. Notwithstanding the foregoing provisions
of this Section 7(d), it shall not be a violation of clause (ii) hereof for any
solicitation to be made to any Person if such solicitation does not relate to
any business (or potential business) such Person has with any member of the
Company Affiliated Group.
(e) Extension of Restriction Period. The Restriction Period shall be
tolled for any period during which the Executive is in breach of any of Sections
7(b) (other than the last sentence thereof), 7(c) or 7(d) hereof.
(f) Proprietary Rights. The Executive shall disclose promptly to the
Company any and all inventions, discoveries, and improvements (whether or not
patentable or registrable under copyright or similar statutes), and all
patentable or copyrightable works, initiated, conceived, discovered, reduced to
practice, or made by the Executive, either alone or in conjunction with others,
during the Executive's employment with the Company and related to the business
or activities of any member of the Company Affiliated Group (the
"Developments"). Except to the extent any rights in any Developments constitute
a work made for hire under the U.S. Copyright Act, 17 U.S.C. Section 101 et seq.
that are owned ab initio by the Company or other members of the Company
Affiliated Group (or both), the Executive assigns all of the Executive's right,
title and interest in and to all Developments (including all intellectual
property rights therein) to the Company or its nominee without further
compensation, including all rights or benefits therefor, including, without
limitation, the right to sue and recover for past and future infringement. The
Executive acknowledges that any rights in any developments constituting a work
made for hire under the U.S. Copyright Act, 17 U.S.C Section 101 et seq. are
owned upon creation by the Company or other members of the Company Affiliated
Group as the Executive's employers. Whenever requested to do so by the Company,
the Executive shall execute any and
-10-
all applications, assignments or other instruments which the Company shall deem
necessary to apply for and obtain trademarks, patents or copyrights of the
United States or any foreign country or otherwise protect the interests of the
Company Affiliated Group therein. These obligations shall continue beyond the
end of the Executive's employment with the Company with respect to inventions,
discoveries, improvements or copyrightable works initiated, conceived or made by
the Executive while employed by the Company and shall be binding upon the
Executive's employers, assigns, executors, administrators and other legal
representatives. In connection with the Executive's execution of this Agreement,
the Executive has informed the Company in writing of any interest in any
inventions or intellectual property rights that the Executive holds as of the
date hereof. If the Company is unable for any reason, after reasonable effort,
to obtain the Executive's signature on any document needed in connection with
the actions described in this Section 7(f), the Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as the Executive's agent and attorney in fact to act for and in the Executive's
behalf to execute, verify and file any such documents and to do all other
lawfully permitted acts to further the purposes of this Section with the same
legal force and effect as if executed by the Executive.
(g) Non-Disparagement. From and after the Termination Date, the
Executive shall not make or publish any disparaging statements (whether written
or oral) regarding any member of the Company Affiliated Group or the affiliates,
directors, officers, employees or shareholders of any of them, and the Company
shall not, and shall use reasonable efforts to cause its affiliates, directors,
officers, employees or shareholders to not, make or publish any disparaging
statements (whether written or oral) regarding the Executive.
(h) Remedies. The Executive agrees that any breach of the terms of
this Section 7 would result in irreparable injury and damage to the Company for
which the Company would have no adequate remedy at law; the Executive therefore
also agrees that in the event of said breach or any threat of breach, the
Company shall be entitled to an immediate injunction and restraining order to
prevent such breach, any threatened breach and any continued breach by the
Executive and any and all Persons acting for or with the Executive, without
having to prove damages, in addition to any other remedies to which the Company
may be entitled at law or in equity, including, without limitation, the
obligation of the Executive to return the Severance Payment to the Company. The
terms of this paragraph shall not prevent the Company from pursuing any other
available remedies for any breach or threatened breach hereof, including,
without limitation, the recovery of damages from the Executive. The Executive
and the Company further agree that the covenants contained in this Section 7 are
reasonable and necessary to protect the businesses of the Company Affiliated
Group because of the Executive's access to Confidential Information and the
Executive's material participation in the operation of such businesses. The
existence of any claim or cause of action by the Executive against any member of
the Company Affiliated Group, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
covenants contained in this Section 7.
8. Executive's Representation. The Executive represents to the
Company that the Executive's execution and performance of this Agreement does
not violate any
-11-
agreement or obligation (whether or not written) that the Executive has with or
to any person or entity including, without limitation, any prior employer.
9. Non-Waiver of Rights. The failure of a party to enforce at any
time the provisions of this Agreement or to require at any time performance by
the other party of any of the provisions hereof shall in no way be construed to
be a waiver of such provisions or to affect either the validity of this
Agreement or any part hereof, or the right of either party to enforce each and
every provision in accordance with its terms.
10. Taxes. Subject to Section 6(d) hereof, the Executive shall be
solely responsible for taxes imposed on the Executive by reason of any
compensation and benefits provided under this Agreement, and all such
compensation and benefits shall be subject to applicable withholding taxes.
11. Notices. Every notice relating to this Agreement shall be in
writing and shall be given by personal delivery, by a reputable same-day or
overnight courier service (charges prepaid), by registered or certified mail,
postage prepaid, return receipt requested or by facsimile to the recipient with
a confirmation copy to follow the next day to be delivered by personal delivery
or by a reputable same-day or overnight courier service to:
If to the Company:
c/o Transportation Resource Partners, LP
2555 Telegraph Road
Bloomfield Hills, Michigan 43802
Attn: Rich Peters and Dave Mitchell
Facsimile: 248.648.2105
With a copy to:
Donald P. Carleen, Esq.
Fried, Frank, Harris, Shriver & Jacobson, LLP
One New York Plaza
New York, New York 10004
Facsimile: 212.859.4000
If to the Executive:
John C. Kennedy
c/o Autocam Corpration
4070 East Paris Avenue S.E.
Grand Rapids, Michigan 49512
Facsimile: 616.698.6876
-12-
With a copy to:
L. Byron Vance, III
Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, Illinois 60606
Facsimile: 312.407.0411
12. Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, estates, successors (including, without
limitation, by way of merger) and assigns. Notwithstanding the provisions of the
immediately preceding sentence, the Executive shall not assign all or any
portion of this Agreement without the prior written consent of the Company. For
purposes of this Agreement, the term "Company Affiliated Group" shall be deemed
to refer to each predecessor of, and successor to, each member of the Company
Affiliated Group (by merger or otherwise), and the term "Board" shall be deemed
to refer to the Board of Directors or similar body of such predecessor or
successor.
13. Entire Agreement. This Agreement, including the Exhibits hereto,
sets forth the entire understanding of the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements, written or oral,
between them as to such subject matter, provided, that nothing herein shall be
construed to enlarge or constrict any other rights that the Company or the
Executive may have under any agreement between the parties hereto other than
this Agreement.
14. Severability. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to that extent be severable and shall not affect
other provisions or applications of this Agreement. If any of the covenants
contained in Section 7 hereof should be deemed invalid, illegal or unenforceable
because its scope is considered excessive, such covenant shall be modified so
that the scope of the covenant is reduced only to the minimum extent necessary
to render the modified covenant valid, legal and enforceable.
15. Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Michigan, without reference
to the principles of conflict of laws. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of Michigan (collectively, the "Selected Courts") for any action
or proceeding relating to this Agreement, agrees not to commence any action or
proceeding relating thereto except in the Selected Courts, and waives any forum
or venue objections to the Selected Courts.
16. Modifications. No provision of this Agreement may be modified,
altered or amended except by an instrument in writing executed by the parties
hereto.
-13-
17. Headings. The headings contained herein are solely for the
purposes of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
18. Legal Fees for Preparation and Negotiation of Agreements. The
Company shall reimburse the Executive for fifty percent (50%) of the legal fees
and expenses incurred by the Executive in connection with the negotiation and
preparation of this Agreement and the Stockholders' Agreement, provided that
such reimbursement shall not exceed $20,000 in total.
19. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
20. Effectiveness. Notwithstanding anything in this Agreement to the
contrary, the effectiveness of this Agreement is subject to the approval prior
to the Effective Time of (i) all payments which may be made to the Executive
hereunder that could be characterized as a "parachute payment" (as such term is
interpreted in the regulations promulgated under Section 280G of the Code) in
connection with the Merger and (ii) the forgiveness by the Company of all of the
loans owing by the Executive under the Policies pursuant to Section 4(c) hereof,
in each case by the affirmative vote of the holders of more than 75% of the
voting stock of Titan in accordance with Section 280G of the Code and the final
regulations promulgated thereunder, such that the payments may be made and the
loans may be forgiven, collectively and in each case, without resulting in the
application of an excise tax pursuant to Section 4999 of the Code (the "280G
Approval"). In the event that the 280G Approval is not obtained prior to the
Effective Time, this Agreement shall be null, void and of no effect ab initio,
and neither the Executive nor any member of the Company Affiliated Group shall
have any rights or obligations hereunder.
[signature page follows]
-14-
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
authority of its Board of Directors, and the Executive has hereunto set the
Executive's hand, effective as of the Effective Date.
MICRON HOLDINGS, INC.
/s/ John C. Kennedy /s/ David R. Mitchell
- ---------------------------------- --------------------------------
John C. Kennedy By: David R. Mitchell
-----------------------------
Title: Vice President
--------------------------
AUTOCAM CORPORATION
/s/ Warren A. Veltman
--------------------------------
By: Warren A. Veltman
-----------------------------
Title: Chief Financial Officer
--------------------------
TITAN HOLDINGS, INC.
/s/ Warren A. Veltman
--------------------------------
By: Warren A. Veltman
-----------------------------
Title: Chief Financial Officer
--------------------------
-15-
EXHIBIT A
Emerald Spa Corporation & affiliates
Emerald Graphics Corporation & affiliates
Bridge Street Capital Fund I and all portfolio companies
-16-
EXHIBIT B
Massachusetts Mutual Life Insurance Company policy # 4400303
Northwestern Mutual Life Insurance Company policy # 11199261
Northwestern Mutual Life Insurance Company policy # 11466899
Northwestern Mutual Life Insurance Company policy # 11467109
-17-
EXHIBIT C
GENERAL RELEASE
1. General Release.
In consideration of the payments and benefits (the "Severance Payments")
to be received by John C. Kennedy (the "Executive") pursuant to the Employment
Agreement to which he, Micron Holdings, Inc., Autocam Corporation ("Autocam"),
and Titan Holdings Inc. are parties, dated as of June 21, 2004 (the "Employment
Agreement"), the sufficiency of which the Executive acknowledges, the Executive,
with the intention of binding himself and his heirs, executors, administrators
and assigns, does hereby release, remise, acquit and forever discharge Micron
Holdings, Inc. (the "Company") and each of its subsidiaries and affiliates
(collectively, the "Company Affiliated Group"), their present and former
officers, directors, shareholders, executives, agents, attorneys, employees and
employee benefit plans (and the fiduciaries thereof), and the successors,
predecessors and assigns of each of the foregoing (collectively, the "Company
Released Parties"), of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys' fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute,
contingent, unliquidated or otherwise and whether now known or unknown,
suspected or unsuspected, which the Executive, individually or as a member of a
class, now has, owns or holds, or has at any time heretofore had, owned or held,
against any Company Released Party in any capacity, including, without
limitation, any and all claims (i) arising out of or in any way connected with
the Executive's service to any member of the Company Affiliated Group (or the
predecessors thereof) in any capacity, or the termination of such service in any
such capacity, (ii) for severance or vacation benefits, unpaid wages, salary or
incentive payments, (iii) for breach of contract, wrongful discharge, impairment
of economic opportunity, defamation, intentional infliction of emotional harm or
other tort, (iv) for any violation of applicable state and local labor and
employment laws (including, without limitation, all laws concerning unlawful and
unfair labor and employment practices) and (v) for employment discrimination
under any applicable federal, state or local statute, provision, order or
regulation, and including, without limitation, any claim under Title VII of the
Civil Rights Act of 1964 ("Title VII"), the Civil Rights Act of 1988, the Fair
Labor Standards Act, the Americans with Disabilities Act ("ADA"), the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the Age
Discrimination in Employment Act ("ADEA") and any similar or analogous state or
local statute, excepting only:
(A) rights of the Executive under (i) this Release of Claims, (ii)
Section 6 of the Employment Agreement, (iii) the Stockholders'
Agreement by and among the Company, the Executive, the GSCP Parties
(as defined therein) and the TRP Parties (as defined therein), dated
as of June 21, 2004, (iv) the Registration Rights Agreement by and
among the Company, the Executive, the GSCP Parties (as defined
therein) and the TRP Parties (as defined therein), dated as of June
21, 2004, and (v) the Management Services Agreement by and among the
Executive, Autocam, Goldman
-18-
Sachs & Co. and Transportation Resource Advisors, LLC, dated as of
June 21, 2004;
(B) rights of the Executive as a stockholder of the Company;
(C) the right of the Executive to receive COBRA continuation coverage in
accordance with applicable law;
(D) rights to indemnification the Executive may have (i) under
applicable corporate law, (ii) under the by-laws or certificate of
incorporation of any Company Released Party or (iii) as an insured
under any director's and officer's liability insurance policy now or
previously in force;
(E) claims (i) for benefits under any health, disability, retirement,
life insurance or other, similar employee benefit plan (within the
meaning of Section 3(3) of ERISA) of the Company Affiliated Group
and (ii) for earned but unused vacation pay through the Termination
Date in accordance with applicable policy of the Company Affiliated
Group; and
(F) claims for the reimbursement of unreimbursed business expenses
incurred prior to the Termination Date pursuant to applicable policy
of the Company Affiliated Group.
2. No Admissions. The Executive acknowledges and agrees that this General
Release is not to be construed in any way as an admission of any liability
whatsoever by any Company Released Party, any such liability being expressly
denied.
3. Application to All Forms of Relief. This General Release applies to any
relief no matter how called, including, without limitation, wages, back pay,
front pay, compensatory damages, liquidated damages, punitive damages, damages
for pain or suffering, costs, and attorney's fees and expenses.
4. Specific Waiver. The Executive specifically acknowledges that his acceptance
of the terms of this General Release is, among other things, a specific waiver
of his rights, claims and causes of action under Title VII, ADEA, ADA and any
state or local law or regulation in respect of discrimination of any kind;
provided, however, that nothing herein shall be deemed, nor does anything
contained herein purport, to be a waiver of any right or claim or cause of
action which by law the Executive is not permitted to waive.
5. Payment of Severance Payments. The Executive shall have a period of 21 days
following the Termination Date to consider whether to execute this General
Release. If the Executive accepts the terms hereof and executes this General
Release prior to the expiration of such 21-day period, he may thereafter, for a
period of 7 days following (and not including) the date of execution, revoke
this General Release. If no such revocation occurs, this General Release shall
become irrevocable in its entirety, and binding and enforceable against the
Executive, on the day next following the day on which the foregoing seven-day
period has elapsed.
-19-
6. No Complaints or Other Claims. The Executive acknowledges and agrees that he
has not, with respect to any transaction or state of facts existing prior to the
date hereof, filed any complaints, charges or lawsuits against any Company
Released Party with any governmental agency, court or tribunal.
7. Effect of Invalidity of Release. In addition to any other remedy available to
the Company hereunder, in the event that this General Release becomes null and
void or is otherwise determined not to be enforceable by the Company for any
reason, then (i) the Company shall cease to have any obligation to pay any
unpaid portion of the Severance Payments and (ii) the Executive shall promptly
repay to the Company any portion of the Severance Payments that has been paid to
him.
8. Return of Property and Information. The Executive agrees to return to the
Company all documents, files, and other property and information of any kind
belonging to any member of the Company Affiliated Group not later than the
Termination Date.
9. Governing Law. Except for issues or matters as to which federal law is
applicable, this General Release shall be governed by and construed and enforced
in accordance with the laws of the State of Michigan without giving effect to
the conflicts of law principles thereof.
[signature page follows]
-20-
IN WITNESS WHEREOF, this General Release has been signed by or on behalf
of each of the parties.
MICRON HOLDINGS, INC.
________________________________
_______________________________ By: ____________________________
John C. Kennedy
Its: ___________________________
Dated:_________________________
Dated: _________________________
AUTOCAM CORPORATION
________________________________
By: ____________________________
Its: ___________________________
Dated: _________________________
TITAN HOLDINGS, INC.
By: ____________________________
Its: ___________________________
Dated: _________________________
-21-