Exhibit 10.13
SFC DRAFT 9/05/03
JOHN R. BUCHAN
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
January 21, 2002 by and between John R. Buchan, an individual ("Executive"), and
Autocam Corporation (the "Company").
1. Employment by the Company and Term.
(a) Full Time and Best Efforts. Subject to the terms set
forth herein, the Company agrees to employ Executive as its Chief Operating
Officer, and in such additional executive capacities as may be requested from
time to time by the Board of Directors of the Company (the "Board") or a duly
authorized committee thereof, and Executive hereby accepts such employment.
Executive shall render such other services for the Company and corporations
controlled by, under common control with or controlling, directly or indirectly,
the Company, and to successor entities and assignees of the Company ("Company
Affiliates") as the Company may from time to time reasonably request and as
shall be consistent with the duties Executive is to perform for the Company and
Executive's experience.
(b) Duties. During the term of his employment with the
Company, Executive will devote substantially his full working time, attention
and efforts to advance the business and welfare of the Company, and will not
engage in any other employment or business activities for any direct or indirect
remuneration that would be directly harmful or detrimental to, or that may
compete with, the business and affairs of the Company, or that would interfere
with his duties hereunder. Executive shall perform such duties as are
customarily associated with his position, consistent with the Bylaws of the
Company and as reasonably required by the Board.
(c) Company Policies. The employment relationship between
the parties shall be governed by the general employment policies and practices
of the Company, including, but not limited to, those relating to protection of
confidential information and assignment of inventions related to the business of
the Company and arising directly out of Executive's employment hereunder;
provided, however, that when the terms of this Agreement differ from or are in
conflict with the Company's general employment policies or practices, this
Agreement shall control.
(d) Term. The initial term of employment of Executive
under this Agreement shall begin as of January 21, 2002 for an initial term
ending on January 20, 2007 (such five (5) year period, the "Initial Term"),
subject to the provisions for termination set forth herein and renewal as
provided in Section 1(e) below.
(e) Renewal. Unless either party shall have given the
other notice that this Agreement shall not be renewed at least ninety (90) days
prior to the end of the Initial Term, the term of this Agreement shall be
automatically extended for a period of one year, such procedure
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to be followed in each such successive period. Each extended term shall continue
to be subject to the provisions for termination set forth herein.
2. Compensation and Benefits.
(a) Salary. During the term hereof, Executive shall
receive for services to be rendered hereunder a salary at the rate of One
Hundred Seventy Thousand Dollars ($170,000) per year (as may be increased from
time to time, the "Base Salary"). Executive's salary shall be payable at least
as frequently as monthly and according to the Company's normal payroll practices
in effect from time to time and shall be subject to payroll deductions as may be
necessary or customary in respect of the Company's salaried employees. The Base
Salary shall be reviewed by and shall be subject to increase at the sole
discretion of the Board each year during the term of this Agreement. The Base
Salary may be reduced by the Board consistent with, during any period and in the
event of a general reduction of compensation for employees of the Company
generally or all executives of the Company specifically and in connection with
fiscal conservation measures taken by the Company.
(b) Participation in Benefit Plans. During the term
hereof, Executive and his immediate family shall be entitled to participate in
any group insurance, hospitalization, medical, dental, health, accident,
disability or similar plan or program of the Company now existing or established
hereafter to the extent that he is eligible under the general provisions thereof
and on the terms as established by the Company for its employees generally or
for senior executives of the Company, including payment of the cost thereof. The
Company may, from time to time, amend, eliminate or establish additional benefit
programs as it deems appropriate. The Company will reimburse Executive the
amount of any continuation premium paid by Executive in the continuation of any
health insurance plan maintained by Executive's previous employer until the date
Executive is eligible to participate in the health plan maintained by the
Company.
(c) Vacation. Executive shall be entitled to a period of
annual vacation time equal to 4 weeks plus 5 personal days in addition to the
Company's regularly scheduled paid holidays. The days selected for Executive's
vacation must be mutually agreeable to Company and Executive.
(d) Life Insurance. The Company agrees that at the
execution hereof and upon each anniversary hereof during Executive's employment
with the Company, the Company will pay an amount up to 10% of Executive's Base
Salary plus annual bonus pursuant to Section 3, below, as may be elected by the
Executive, but not less than the sum of Thirty Thousand Dollars ($30,000.00), as
ordinary premiums as they become due on policies of insurance on the Executive's
life and owned by the Executive. These payments and policies shall be subject to
reimbursing the Company for all premiums paid by it in accordance with the terms
of a normal so called collateral assignment split-dollar agreement at the time
of payment or other distribution under such policies of proceeds to Executive or
Executive's estate; provided, however, that all such policies shall be
distributed to Executive (without any reimbursement to the Company and with the
collateral assignment split dollar agreement terminated) as a bonus immediately
upon the occurrence of any of the following:
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(i) Change of Control. At any time after a
Change of Control as defined in paragraph 6(d)(iii) below, any termination of
this benefit or any involuntary termination of Executive's employment with
Company.
(ii) Retirement. Any voluntary termination of
Executive's employment with Company at any time after Executive has attained the
age of 60 years.
(iii) Termination. Any involuntary termination of
Executive's employment with Company at any time, including in the event of a
Disability.
(iv) Plan Termination. Upon termination of this
plan by the Company.
(v) Change of Conditions. In the event that
Executive's principal place of employment with Company is changed to a location
more than thirty (30) miles from the boundary of the corporate limits of Grand
Rapids, Michigan without Executive's consent or Executive suffers a material
reduction in the aggregate of cash compensation and benefits which is not in
proportion to a general reduction for salaried employees of Company.
(e) Existing Supplemental Retirement Plan. Company will
pay premiums on a policy or policies of life insurance on Executive's life to
the extent and at a time as determined by company so that the "paid up" cash
value of the policy or policies is not less than $111,000 at the expiration of
the initial Term of this Agreement. This is to compensate Executive for the loss
of the supplemental retirement plan in existence at Executive's previous
employer and will be offset by any payment received under such plan. Company
agrees to distribute to Executive the policy or policies purchased upon
termination of Executive's employment from Company at any time after a Change of
Control of Company as defined in Section 6(d) below or upon any termination of
Executive's employment with Company after the expiration of the Initial Term
hereof, or after any involuntary termination of employment with the Company
(including by Disability), whichever is the first to occur. In the event of a
voluntary termination of Executive's employment with Company for any reason
prior to the expiration of the Initial Term hereof and not after an applicable
Change of Control, Company agrees to distribute to Executive a sum equal to the
then surrender value of the policy or policies times the applicable percentage
indicated below.
Number of Completed Years
of the Term Hereof Applicable %
------------------ ------------
1 20
2 40
3 60
4 80
In the event of the death of Executive prior to the distribution of the policy
or policies and while employed by the Company, the entire death benefit payable
under such policy shall be paid,
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subject to applicable withholding, to executive's designated beneficiary or
beneficiaries from time to time.
(f) Car Allowance. The Company will pay Executive a
monthly car allowance of Six Hundred ($600.00) which will be included in your
annual compensation.
(g) Club Membership. The Company shall pay for a family
membership at the East Hills Athletic Club for Executive.
(h) Withholding. All payments under this agreement will
be made subject to and are less standard withholdings for tax and social
security purposes.
(i) Disability. All compensation payable hereunder shall
be reduced by the amount of any disability insurance benefit payments made to
Employee during the term hereof as the result of any insurance policy paid for
by the Company.
(j) Retirement Plans. During the term hereof, Executive
shall be entitled to participate in any retirement plan or program of the
Company now existing or established hereafter to the extent that he is eligible
under the general provisions thereof and on the terms as established by the
Company for its employer generally or for senior executives of the Company,
including payment of the cost thereof. The Company may, from time to time,
amend, eliminate or establish retirement plans as it deems appropriate.
3. Annual Bonuses. Executive shall be entitled to an annual merit
performance award as set out on Exhibit 3 hereto in accordance with the
provisions thereof as it relates to the return on invested capital experienced
by the Company; provided that for the year ended December 31, 2002, a bonus of
One Hundred Thirty Thousand ($130,000.00) shall be paid. All bonuses are payable
only in the event that you are employed as a full time employee of the Company
under this agreement on the last day of the fiscal year for which a bonus is
applicable, no part of any bonus shall accrue or be paid otherwise and all
bonuses are subject to applicable requirements for withholdings for tax and
social security purposes. In the event that a bonus is not required under the
terms of Exhibit 3, Executive shall never the less be entitled to a bonus of
some other amount to be determined by the Chief executive officer of the Company
in his discretion according to the performance of the Company and the individual
contributions and effort of the Executive during the period considered.
4. Options. The Company has establish a stock option program for
senior executive officers and Executive shall be eligible to participate in such
program. The President of the Company will recommend to the Board of Directors
of the company, at their meeting that immediately succeeds the date hereof, that
Executive receive a grant of options under this plan to purchase up to 31,299
shares of common stock in the parent of Company, Titan Holdings, Inc. at
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a price of Sixteen Dollars ($16.00) per share, vesting over a 5 year period or,
if earlier, upon a change of control of Company.
5. Reasonable Business Expenses and Support. The Company shall
provide to Executive such office space, furniture, materials, supplies and
secretarial and other staff help as are necessary or appropriate to his duties
hereunder. Executive shall be reimbursed for documented and reasonable business
expenses in connection with the performance of his duties hereunder.
6. Termination of Employment. The date on which Executive's
employment by the Company ceases, under any of the following circumstances,
shall be defined herein as the "Termination Date."
(a) Termination for Cause.
(i) Termination; Payment of Accrued Salary and
Vacation. The Board may terminate Executive's employment with the Company at any
time for Cause, immediately upon notice to Executive of the circumstances
leading to such termination for Cause. In the event that Executive's employment
is terminated for Cause, Executive shall receive payment for all accrued Base
Salary and vacation time through the Termination Date, which in this event shall
be the date upon which notice of termination is given. The Company shall have no
further obligation to pay severance of any kind whether under this Agreement or
otherwise nor to make any payment in lieu of notice.
(ii) Definition of Cause. "Cause" means the
occurrence or existence of any of the following with respect to Executive, as
determined by a majority of the disinterested directors of the Board: (A) a
material breach by Executive of his duty not to engage in any transaction that
represents, directly or indirectly, self-dealing with the Company or any Company
Affiliates that has not been approved in advance by a majority of the
disinterested directors of the Board, which remains uncured after the lapse of
30 days following the date that the Company has given Executive written notice
thereof; (B) the repeated material breach by Executive of any duty referred to
in clause (A) above as to which at least two (2) written notices have been given
pursuant to such clause (A); (C) any act of dishonesty, misappropriation,
embezzlement, fraud or similar conduct involving the Company or any Company
Affiliate; (D) the conviction or the plea of nolo contendere or the equivalent
in respect of a felony involving moral turpitude, which, in any case described
in this clause (D), the Board reasonably determines renders Executive unfit to
serve in his capacity as an officer or employee of the Company or any Company
Affiliate; (E) intentional infliction of any damage of a material nature to any
property of the Company or any Company Affiliate; or (F) the repeated abuse of
any controlled substance or alcohol or any other non-controlled substance which,
in any case described in this clause (F), the Board reasonably determines
renders Executive unfit to serve in his capacity as an officer or employee of
the Company or any Company Affiliate.
(b) Termination by Executive.
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(i) Breach by Company. Executive shall have the
right, at his election, to terminate his employment with the Company by written
notice to the Company to that effect if the Company shall have failed to perform
a material condition or covenant of this Agreement or the Company shall have
made a change resulting in diminution in Executive's duties, authority,
responsibility or compensation without performance or market justification (a
"Company Material Breach"); provided, however, that termination for a Company
Material Breach will not be effective until Executive shall have given written
notice specifying the claimed breach and, provided such breach is curable, the
Company fails to cure the alleged breach within thirty (30) days after the
receipt of the applicable notice (but within ten (10) days if the failure to
perform is a failure to pay monies when due under the terms of this Agreement),
or if the Company repeatedly commits a Company Material Breach as to which at
least two (2) written notices have been given pursuant to clause 6(b)(i) above.
(ii) Other Voluntary Terminations. In the event
that Executive voluntarily terminates employment with the Company other than
pursuant to 6(b)(i) above, Executive shall be bound by Sections 7, 8 and 9
below, Company may elect not to pay any severance pay otherwise provided for
hereunder and Company's sole remedy under this Agreement shall be to pursue an
injunction against, or damages from, Executive for violation of such Sections.
(c) Termination Upon Disability. The Company may
terminate Executive's employment in the event Executive suffers a disability
that renders Executive unable to perform the essential functions of his
position, even with reasonable accommodation, for any consecutive ninety (90)
days or for any one hundred and eighty (180) days within any two hundred and
seventy (270) day period. After the Termination Date, which in this event shall
be the date upon which notice of termination is given, Executive shall receive
the accrued portion of any Base Salary and vacation hereunder through the
Termination Date, less standard withholdings for tax and social security
purposes and no further compensation shall be payable under Sections 2(a) or 3
of this Agreement.
(d) Termination Without Cause. The Company may terminate
Executive's employment at any time for other than Cause or disability, pursuant
to the following termination payment requirements.
(i) Termination Payments during the Initial
Term. In the event that, during the Initial Term, Executive's employment is
terminated (A) by the Company other than pursuant to paragraph 6(a) or 6(c), or
(B) by Executive pursuant to paragraph 6(b), the Company shall pay Executive as
severance an amount equal to eighteen (18) months of his then Base Salary. Such
severance shall be paid, less standard withholdings for tax and social security
purposes, over such term in monthly pro rata payments commencing as of the
Termination Date, plus the accrued portion of any vacation through the
Termination Date, less standard withholdings for tax and social security
purposes.
(ii) Termination Payments After the Initial Term.
In the event that the term of this Agreement is extended pursuant to Section
1(e) hereof (an "Extension Period"), and during such Extension Period
Executive's employment is terminated (A) by the Company other
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than pursuant to paragraph 6(a) or 6(c), or (B) by Executive pursuant to
paragraph 6(b), the Company shall pay Executive as severance an amount equal to
twelve (12) months of his then Base Salary, less standard withholdings for tax
and social security purposes, payable over such twelve (12) month term in
monthly pro rata payments commencing as of the Termination Date, plus the
accrued portion of any vacation through the Termination Date, less standard
withholdings for tax and social security purposes.
(iii) Termination On Change of Control. In the
event that Executive's employment is involuntarily terminated within 180 days of
a "Change of Control" of Company, the Company shall pay Executive as severance
an amount equal to twenty four (24) months of his then Base Salary plus a bonus
equal to the average of the bonus paid to Executive in respect of the two most
recent completed fiscal years of the Company and prorated according to the
number of days in the current fiscal year Executive was employed, less standard
withholdings for tax and social security purposes, payable over such twenty four
(24) month term in monthly pro rata payments commencing as of the Termination
Date, plus the accrued portion of any vacation through the Termination Date,
less standard withholdings for tax and social security purposes. "Change of
Control" means with respect to the Company (x) any sale, transfer or other
conveyance, whether direct or indirect, of all or substantially all of the
assets of the Company, on a consolidated basis, in one transaction or a series
of related transactions, (y) any transaction as a result of which any person or
group other than Aurora Capital Partners II L.P. ("ACP") Controls the Company,
or (z) a reorganization, merger (not including a merger to effectuate a
reincorporation of the Company) or consolidation of the Company as a result of
which the outstanding securities of the class then owned by or subject to an
option to purchase by the Executive are exchanged for or converted into cash,
property and/or securities not issued by the Company, which reorganization,
merger or consolidation shall have been affirmatively recommended to the
stockholders of the Company by the Board. "Control" means the possession,
directly or indirectly, of the ownership of a majority of the voting securities
of the Company or the owner of all of the outstanding capital stock of the
Company. In the event that Executive has not been offered a position with the
Company for a term of not less than one year following the date of the Change of
Control without a reduction or proposed reduction in the aggregate compensation
package of Executive compared to that as in effect on the date of Change of
Control and with Executive's principal place of employment with Company at a
location not more than thirty (30) miles from the boundary of the corporate
limits of Grand Rapids, Michigan and if Executive terminates employment prior to
the 180 day period provided above, Executive will be deemed to have been
terminated involuntarily.
(iv) Breach. The Company shall not be obligated
to pay any termination payments under clauses 6(d)(i), (ii) or (iii) above if
Executive breaches the provisions of Sections 7, 8 or 9 below.
(e) Benefits Upon Termination. All benefits provided
under paragraph 2(b) hereof shall be extended, at Executive's election and the
Company's cost, to the extent permitted by the Company's insurance policies and
benefit plans, for a period following the Termination Date equal to one (1) year
or, if greater, throughout the period during which Executive is paid severance
hereunder, except (a) as required by law (e.g., COBRA health insurance
continuation election) or (b) in the event of a termination pursuant to
paragraph 6(a).
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(f) Termination Upon Death. If Executive dies prior to
the expiration of the term of this Agreement, the Company shall (i) continue
coverage of Executive's dependents (if any) under all benefit plans or programs
of the type listed in paragraph 2(b) for such periods as the Company's policy
with respect thereto applies for executives of the Company generally but not
less than 12 months or the maximum then allowed by law if less, and (ii) pay to
Executive's estate or designated beneficiary the accrued portion of any Base
Salary and vacation through the Termination Date, less standard withholdings for
tax and social security purposes.
(g) Non-Renewal. In the event that the Company elects,
pursuant to Section 1(e) hereof, not to renew this Agreement at the end of the
Initial Term or any Extension Period, the Company shall pay Executive as
severance upon a termination thereafter as provided in Section 6, other than
Section 6(d)(iii); provided, however, that the Company shall not be obligated to
pay any such severance amounts if Executive breaches the provisions of Sections
7, 8 or 9 below. In the event of such non-renewal of this Agreement, Executive
shall be entitled to receive benefits for the period and subject to the terms
set forth in Section 6(e) hereof.
7. Proprietary Information Obligations. During the term hereof,
Executive will have access to and become acquainted with the Company's and the
Company Affiliates' confidential and proprietary information, including, but not
limited to, information or plans regarding the Company's and the Company
Affiliates' customer relationships, personnel or sales, marketing, pricing and
financial operations and methods; trade secrets; formulas; devices; secret
inventions; processes; and other compilations of information, records and
specifications (collectively "Proprietary Information"). Executive shall not
disclose any of the Company's or the Company Affiliates' Proprietary
Information, directly or indirectly, or use it in any way, either during the
term of this Agreement or at any time thereafter, except as required in the
course of his employment by the Company or as authorized in writing by the
Company. All files, records, documents, computer-recorded information, drawings,
specifications, equipment and similar items relating to the business of the
Company or the Company Affiliates, whether prepared by Executive or otherwise
coming into his possession, shall remain the exclusive property of the Company
or the Company Affiliates, as the case may be, and shall not be removed from the
premises of the Company under any circumstances whatsoever without the prior
written consent of the Company, except when (and only for the period) necessary
to carry out Executive's duties hereunder, and if removed shall be immediately
returned to the Company upon any termination of his employment; provided,
however, that Executive may retain copies of documents reasonably related to his
interest as a stockholder and any documents that were personally owned, which
copies and the information contained therein Executive agrees not to use for any
business purpose. Notwithstanding the foregoing, Proprietary Information shall
not include (i) information that is or becomes generally public knowledge or
public except through disclosure by Executive in violation of this Agreement and
(ii) information that may be required to be disclosed by applicable law.
8. Noninterference; Noncompetition. Executive agrees that during
the term of this Agreement and throughout that period after the termination
hereof during which Executive is paid severance pursuant to Section 6(d)(i) or
6(d)(ii) hereof, but not for any period that Company has elected not to pay
severance pursuant to its election under section 6(b)(ii) (the "Severance
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Period"), Executive shall not, directly or indirectly, except on behalf of the
Company and its respective Affiliates:
(a) engage, invest, participate or be interested in any
business, enterprise or operation competing with the Company or any of its
Affiliates with respect to the Business in any of the Territories; or
(b) have any interest in, own, manage, operate, control,
be connected with as a stockholder (other than as a stockholder of less than one
percent (1%) of the issued and outstanding stock of a publicly held
corporation), joint venturer, officer, director, agent, lender, representative,
partner, employee or consultant, or otherwise engage or invest or participate in
any business that shall compete with the Business, whether conducted by the
Company, any Affiliate of the Company or any of their successors in any of the
Territories; or
(c) solicit or hire any existing or future employee of
the Company, any Affiliate of the Company or any of their respective Affiliates
or successors; or
(d) solicit or encourage any material customer or
supplier of the Company or any of its Affiliates to terminate or adversely alter
in any material respect any relationship such person may have with the Company,
any of its Affiliates or any of their successors.
As used herein, the term "Business" means the precision machining
industry and the term "Territories" means the United States of America.
9. Miscellaneous.
(a) Notices. Any notices provided hereunder must be in
writing and shall be deemed effective upon the earlier of two days following
personal delivery (including personal delivery by telecopy or telex), or the
fourth day after mailing by first class mail to the recipient at the address
indicated below:
To the Company:
Autocam Corporation
4070 East Paris Avenue
Kentwood, MI 49512
Attention: Chief Financial Officer
Telecopier No: 616-698-6876
With a copy to:
Autocam Corporation
4070 East Paris Avenue
Kentwood, MI 49512
Attention: Director of Human Resources
Telecopier No: 616-698-6876
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To Executive:
John R. Buchan
7837 Thornridge Lane
Caledonia, MI 49316
With a copy to:
or to such other address or to the attention of such other person as the
recipient party will have specified by prior written notice to the sending
party.
(b) Severability. Any provision of this Agreement that is
deemed invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction and subject to this paragraph, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any way the
remaining provisions hereof in such jurisdiction or rendering that or any other
provisions of this Agreement invalid, illegal or unenforceable in any other
jurisdiction. If any covenant 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.
(c) Entire Agreement. This document, together with any
noncompetition, confidentiality or similar agreement entered into as part of the
normal employment procedure of Company, constitute the final, complete and
exclusive embodiment of the entire agreement and understanding between the
parties hereto related to the subject matter hereof and supersedes and preempts
any prior or contemporaneous understandings, agreements, or representations by
or between such parties, written or oral.
(d) Counterparts. This Agreement may be executed on
separate counterparts, any one of which need not contain signatures of more than
one party, but all of which taken together will constitute one and the same
agreement.
(e) Successors and Assigns. This Agreement is intended to
bind and inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors and assigns, except that Executive may
not assign any of his duties hereunder, and he may not assign any of his rights
hereunder without the prior written consent of the Company, and except that the
Company may not assign any of its rights hereunder except by operation of a
merger or other business combination.
(f) Amendments; No Third Party Beneficiaries. No
amendments or other modifications to this Agreement may be made except by a
writing signed by both parties hereto. No amendment or waiver of this Agreement
requires the consent of any individual, partnership, corporation or other entity
not a party to this Agreement. Nothing in this Agreement, express or implied, is
intended to confer upon any third person any rights or remedies under or by
reason of this Agreement.
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(g) Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement will be governed by
the laws of the State of Michigan without giving effect to principles of
conflicts of law.
(h) Death After Termination. In the event of the death of
Executive after his termination of employment with the Company and while
severance payments are being made by the Company as provided herein, the entire
amount of severance payment due and unpaid, as determined at the Termination
Date, shall be paid to Executive's estate without reduction.
10. Arbitration.
(a) Any disputes or claims arising out of or concerning
the Executive's employment or termination by the Company, whether arising under
theories of liability or damages based upon contract, tort or statute, shall be
determined exclusively by arbitration before a single arbitrator in accordance
with the commercial transactions arbitration rules of the American Arbitration
Association, except as modified by this Agreement. The arbitrator's decision
shall be final and binding on both parties. Judgment upon the award rendered by
the arbitrator may be entered in any court of competent jurisdiction. In
recognition of the fact that resolution of any disputes or claims in the courts
is rarely timely or cost-effective for either party, the Company and Executive
enter this mutual agreement to arbitrate in order to gain the benefits of a
speedy, impartial and cost-effective dispute resolution procedure.
(b) Any arbitration shall be held in Grand Rapids,
Michigan. The arbitrator shall be an attorney with substantial experience in
commercial transactions, selected by the parties alternately striking names from
a list of five such persons provided by the American Arbitration Association
(AAA) office located nearest to Grand Rapids, Michigan, following a request by
the party seeking arbitration for a list of five such attorneys with substantial
professional experience in commercial transactions. If either party fails to
strike names from the list, the arbitrator shall be selected from the list by
the other party.
(c) Each party shall have the right to take the
deposition of one individual (provided that if arbitrable disputes or claims
have been consolidated, pursuant to Section 10(g) below, such number will be
three) and any expert witness designated by the other party. Each party shall
also have the right to propound requests for production of documents to any
party and the right to subpoena documents and witnesses for the arbitration.
Additional discovery may be made only where the arbitrator selected so orders
upon a showing of substantial need. The arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any party
and shall apply the standards governing such motions under the Federal Rules of
Civil Procedure.
(d) The Company and Executive agree that they will
attempt, and they intend that they and the arbitrator should use their best
efforts in that attempt, to conclude the arbitration proceeding and have a final
decision from the arbitrator within one hundred twenty (120) days from the date
of selection of the arbitrator; provided, however, that the arbitrator shall be
entitled to extend such 120-day period for a total of two (2) one hundred twenty
(120) day periods. The
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arbitrator shall immediately deliver a written award with respect to the dispute
to each of the parties, who shall promptly act in accordance therewith.
(e) The Company shall pay the fees and expenses of the
arbitrator. Each party shall pay its own attorneys' fees and costs including,
without limitation, fees and costs of any experts. However, attorneys' fees and
costs incurred by the party that prevails in any such arbitration commenced
pursuant to this Section 10 or any judicial action or proceeding seeking to
enforce the agreement to arbitrate disputes as set forth in this Section 10 or
seeking to enforce any order or award of any arbitration commenced pursuant to
this Section 10 may be assessed against the party or parties that do not prevail
in such arbitration in such manner as the arbitrator or the court in such
judicial action, as the case may be, may determine to be appropriate under the
circumstances. If any party prevails on a statutory claim that entities the
prevailing party to reasonable attorneys' fees (with or without expert fees) as
part of the costs, the arbitrator may award reasonable attorneys' fees (with or
without expert fees) to the prevailing party in accord with such statute. Any
controversy over whether a dispute is an arbitrable dispute or as to the
interpretation or enforceability of this paragraph with respect to such
arbitration shall be determined by the arbitrator.
(f) In a contractual claim under this Agreement, the
arbitrator shall have no authority to add, delete or modify any term of this
Agreement.
(g) In the event that arbitrable disputes or claims arise
between Executive and the Company under this Agreement and one or more
additional agreements to which Executive, on the one hand, and any one or more
of the Company or Titan Holdings, Inc. on the other hand, are parties, Executive
shall consent to the consolidation and determination of all such disputes and/or
claims in a single arbitration to be held in Grand Rapids, Michigan,
notwithstanding any different location designated by another agreement under
which one or more of the disputes or claims to be arbitrated has arisen,
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
effective as of the date first above written.
/s/ John R. Buchan
____________________________________________
John R. Buchan
Autocam Corporation
By: /s/ John C. Kennedy
_________________________________________
John C. Kennedy, President
12
EXHIBIT 3
EXECUTIVE BONUS SCHEDULE
If the Company's Return on Invested Capital (ROIC) for the 12 month
period for which a bonus is being calculated is less than 25%, the bonus payout
will be subjectively determined. In the event that the ROIC is 25% or greater a
bonus will be paid according to the following schedule:
ROIC BONUS
---- -----
At least 25% but less than 26% 75% of Base Salary.
At least 26% but less than 27% 97% of Base Salary.
At least 27% but less than 28% 106% of Base Salary.
At least 28% but less than 29% 115% of Base Salary.
At least 29% but less than 30% 123% of Base Salary.
At least 30% but less than 31% 132% of Base Salary.
At least 31% but less than 32% 141% of Base Salary.
At least 32% but less than 33% 150% of Base Salary.
At least 33% but less than 34% 158% of Base Salary.
At least 34% but less than 35% 168% of Base Salary.
At least 35% and greater 176% of Base Salary.
ROIC is (i) six times earnings before payment of or provision for
interest, taxes, deprecation and amortization ("EBITDA") for the Company for the
period minus (ii) interest bearing debt as of the end of such period (iii) with
the result divided by original equity of the Company plus any subsequent
contributions to equity. EBITDA and ROIC shall be calculated by the Company on a
consolidated basis according to its regular policies and practices and generally
accepted accounting procedures.