1
EXHIBIT 10.17
Name
Address
OVERSEAS VERSION
Dear _____________________:
This letter agreement (the "Agreement") is made between you (the
"Executive") and ________________________________________ (the "Employer") and
sets out the agreement between the Executive and the Employer with respect to
certain severance arrangements which shall apply only in the event that a Change
in Control, as hereinafter defined, of TransTechnology Corporation (the
"Corporation") occurs after the date hereof.
1. For purposes of this Agreement, a "Change in Control" shall
mean the occurrence of any one (or more) of the following
events after the date of this Agreement:
a. When the Corporation acquires actual knowledge that
any person, including a group as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, is
or has become the beneficial owner of shares of the
Corporation with respect to which twenty percent
(20%) or more of the total number of votes for the
election of the Corporation's Board of Directors may
be cast;
b. As a result of, or in connection with, any cash
tender offer, exchange offer, merger or other
business combination, sale of assets or contested
election, or combination of the foregoing, persons
who were directors of the Corporation immediately
prior to such event shall cease to constitute a
majority of the Board of Directors;
c. The stockholders of the Corporation shall approve an
agreement providing either for a transaction in which
the Corporation will cease to be an independent
publicly owned corporation or for a sale or other
disposition of all or substantially all the assets of
the Corporation; or
d. A tender offer or exchange offer is made for shares
of the Corporation's common stock (other than one
made by the Corporation) and shares of common stock
are acquired thereunder.
2
[date]
Page 2
2. In the event of a Change in Control of the Corporation, and
the termination by the Employer of the Executive's employment
upon such Change in Control or within 24 months thereafter for
reasons other than Cause, as defined in Paragraph 3 below, or
the Executive terminates his employment with the Employer for
"Good Reason," as defined in Paragraph 5 below, in connection
with, or within 24 months after a Change in Control, the
Employer shall pay to the Executive an amount equal to (a) the
Executive's annual salary in effect on the date of said
termination ("Base Salary"), plus (b) the average of his total
bonuses paid or due for each of the last 2 completed fiscal
years prior to the Termination Date, as defined below (or, in
the event the Executive has been employed by the Employer for
less than 2 fiscal years and has received only one bonus, an
amount equal to the bonus received by the Executive) plus (c)
the working days pay equivalent of earned but unused vacation
and sick time, plus (d) the fair market value of any accrued
but unvested restricted stock and stock options outstanding as
of the Executive's Termination Date, plus (e) the amount
payable to the Executive under the Employer's severance pay
policy applicable pursuant to applicable law or pursuant to
any agreement between the Executive and either or both the
Employer and the Corporation plus (f) all accrued and unpaid
salary, less any governmentally required withholdings on the
foregoing. As used in clause (d), the term "fair market value"
means the closing price of the common stock of the Corporation
on the New York Stock Exchange on the Termination Date. Said
lump sum shall be paid within 10 days of the Executive's last
day of employment with the Employer (said last day being
hereinafter the "Termination Date"); provided that in the
event of a breach by the Employer of this Agreement as set out
in Paragraph 9 below, the aforesaid sums referenced in clauses
2(a) through (f) above shall be paid in one installment within
10 days of the exercise by the Executive of his rights under
Paragraph 9. The aforesaid sums referenced in clauses 2(a)
through (f) shall be reduced by all other amounts which may
become payable to the Executive as a result of the employment
termination under applicable law or pursuant to any agreement
between the Executive and either or both the Employer and the
Corporation. The Employer shall exercise its best efforts to
continue to provide the Executive for a period of 24 months
from the Termination Date with life, health, and disability
insurance coverage substantially identical to the coverage
maintained for the Executive prior to the Termination Date.
3. For purposes of this Agreement, termination for "Cause" shall
mean only the following conduct by the Executive:
a. material breach of any provision of this Agreement;
b. breach of fiduciary duty to the Employer involving
personal gain or profit;
c. intentional and repeated failure to perform material
stated duties;
3
[date]
Page 3
d. conviction of any felony, any crime involving moral
turpitude, or any crime committed in the conduct of
his or her official duties which is materially
adverse to the welfare of the Employer.
The Executive shall not be deemed to have been terminated for
Cause unless there shall have been delivered to the Executive
a copy of a resolution adopted by the Board of Directors of
the Employer, finding that in the good faith opinion of the
Board of Directors of the Employer the Executive was guilty of
conduct specified in this Paragraph 3 and specifying the
particulars thereof in detail. Except in the event of a
conviction as described in subparagraph 3(d), in no event will
the Executive be subject to termination for Cause pursuant to
this Agreement unless the Executive shall have failed to cure,
correct or prevent the alleged breach or failure within thirty
(30) days after such resolution has been delivered to the
Executive.
4. This Agreement terminates upon the termination of the
employment relationship between Executive and Employer, unless
the termination of the employment relationship occurs after a
Change in Control and was effected by the Employer for reasons
other than Cause, or was effected by the Executive for Good
Reason.
5. For purposes of this Agreement, "Good Reason" shall mean the
occurrence, in connection with, or within 24 months after, a
Change in Control, of any of the events or conditions
described in subparagraphs (a) through (g) hereof without the
Executive's express written consent. Executive's right to
terminate his employment pursuant to this Paragraph 5 shall
not be affected by his incapacity due to physical or mental
illness.
a. A change in the Executive's status, title, position
or responsibilities (including reporting
responsibilities) which, in the Executive's
reasonable judgment, does not represent a promotion
from his status, title, position or responsibilities
as in effect immediately prior thereto; the
assignment to the Executive of any duties or
responsibilities which, in the Executive's reasonable
judgment, are inconsistent with such status, title,
position or responsibilities; or any removal of the
Executive from or failure to reappoint him to any of
such positions, except in connection with the
termination of his employment for (i) Cause, (ii) as
a result of his death or (iii) by the Executive other
than for Good Reason;
b. A reduction by the Employer in the Executive's Base
Salary as in effect on the date of a Change in
Control or as the same may be increased from time to
time;
c. The intention of the Employer to relocate or transfer
the Executive to a location outside a 80 kilometer
radius of the location which is his primary office
location as of the date immediately preceding the
date of a Change in Control.
4
[date]
Page 4
d. The adverse and substantial alteration in the nature
and quality of the office space from which the
Executive performs his duties, including the size and
location thereof, as well as the secretarial and
administrative support provided to him;
e. The failure by the Employer to continue to provide
the Executive with compensation and benefits provided
for under this Agreement or benefits substantially
similar to those provided under any of the employee
benefit plans in which the Executive becomes a
participant, or the taking of any action by the
Employer which would directly or indirectly
materially reduce any of such benefits or deprive the
Executive of any material benefit enjoyed by him at
the time of the Change in Control;
f. Any material breach by the Employer of any provision
of this Agreement; or
g. The failure of the Employer to obtain a satisfactory
agreement from any successor or assignee of the
Employer to assume and agree to perform this
Agreement, as contemplated in Paragraph 9 hereof.
6. All reasonable legal fees and expenses paid or incurred by the
Executive relating to any dispute, controversy or claimed
breach regarding this Agreement shall be paid or reimbursed by
the Employer, if the Executive is successful, or as may be
determined to be appropriate by any judgment or award based on
the relative merits of the two parties.
7. In addition to, and not in limitation of, any obligations of
confidentiality or non-competition which Executive may have
under any agreement between Executive and either or both the
Employer and the Corporation, or arising under applicable law,
the Executive agrees that during the term of this Agreement,
and for a period of one (1) year commencing the Termination
Date, he will not directly or indirectly:
a. Solicit, divert or take away any of the customers,
business or patronage of the Employer or its
subsidiaries or affiliates; or
b. Induce or attempt to influence any employee of the
Employer or its subsidiaries or affiliates to
terminate his or her employment therewith.
c. In the event of a breach or threatened breach of the
Executive of the provisions of this Paragraph 7, the
Employer, or any duly authorized officer thereof,
will be entitled to a temporary restraining order or
injunction.
8. The Executive shall not, during the term of this Agreement,
have any other employment (exclusive of volunteer services
with not-for-profit institutions or occasional speaking
engagements) except with the prior approval of the Chairman of
the Board and Chief Executive Officer of the Corporation.
5
[date]
Page 5
9. The Employer will require any successor including any
successor parent entity (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the
Employer, by an assumption agreement in form and substance
satisfactory to the Executive, to expressly assume and agree
to perform this Agreement in the same manner and to the same
extent that the Employer would be required to perform it if no
such succession had taken place. Failure of the Employer to
obtain such assumption agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Employer
in the same amount and on the same terms that he would be
entitled to hereunder if he terminated his employment for Good
Reason in connection with, or within 24 months after, a Change
in Control.
This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by his personal or
legal representatives, successors, heirs, distributees,
devisees, legatees and permitted assigns.
10. This Agreement is personal to each of the parties hereto and,
except as provided in Paragraph 9, neither party may assign or
delegate any of its rights or obligations hereunder without
first obtaining the written consent of the other party.
11. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed, certified or
registered mail, return receipt requested with postage
prepaid, or delivered by next day courier service such as is
offered by Federal Express and competing carriers, to the
following addresses or to such other address as either party
may designate by like notice.
If to the Employer, to:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
6
[date]
Page 6
with a copy to:
TransTechnology Corporation
150 Allen Road
Liberty Corner, New Jersey 07938
USA
Attention: Chief Executive Officer
If to the Executive, to:
[name]
__________________________________
__________________________________
__________________________________
__________________________________
12. No amendments or additions to this Agreement shall be binding
unless in writing and signed by both parties.
13. The provisions of this Agreement shall be deemed severable and
the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions
hereof.
14. This Agreement is governed by the laws of ___________. All
disputes in connection with this Agreement shall be brought
exclusively before the competent court in
___________________________________________.
15. Nothing in this Agreement amends or modifies, or shall be
deemed or construed to amend or modify, the terms and
provisions (including the triggers and dates of payments
thereunder) of any stock option granted by the Corporation
and/or the Employer to the Executive.
16. Absent a Change in Control or unless extended in writing by
the parties hereto, this Agreement shall expire on January 14,
1999.
7
Please signify your agreement to the terms of this Agreement by signing
in the space provided below and returning one fully executed copy to the
undersigned.
_______________________________________
By: _____________________________
By: _____________________________
Date: _____________________________
Accepted and agreed:
__________________________________
[name]
Date: ____________________________
GH:1966