Exhibit 10.26
EMPLOYMENT AGREEMENT
Between
INTERMET CORPORATION
And
LAURENCE VINE-CHATTERTON
THIS AGREEMENT, dated as of the 17th Day of November, 1998, is made by and
between INTERMET CORPORATION, a Georgia corporation having its principal place
of business in Troy, Michigan (the "Company"), and Laurence Vine-Chatterton (the
"Executive").
WHEREAS, the Company desires to continue the services of the Executive, and the
Executive is willing to continue to render such services; and
WHEREAS, in order to secure the continued services of the Executive, the Company
believes it should provide the Executive with an agreement for severance
payments.
NOW, THEREFORE, the Company and the Executive agree as follows:
Termination of Employment
1.1 Termination of Employment for Cause or Other Than for Good Reason. If,
before the end of the Contract Term, the Company terminates the
Executive's employment for Cause or the Executive terminates employment
other than for Good Reason, then the Company shall pay to the Executive in
a lump sum immediately after the Date of Termination that portion of the
Executive's then current annual base salary which is accrued but unpaid as
of such Date of Termination. The Executive will not be entitled to receive
any other compensation or benefits under this Agreement.
1.2 Termination of Employment for Death or Disability. If, before the end of
the Contract Term, the Executive's employment terminates due to death or
Disability, the Company shall pay to the Executive (or to the Executive's
estate), in accordance with Company policy following the Date of
Termination:
(a) that portion of the Executive's annual base salary which is accrued but
unpaid as of the Date of Termination;
(b) the amount of any Annual Bonus applicable to any Annual Bonus Period which
ended prior to the Date of Termination, but which is unpaid as of the Date
of Termination;
(c) disability, life insurance, and other benefits as typically provided to an
executive under the Company's employee welfare benefit plans as a result
of such an executive's death or Disability; and
(d) a pro rata portion of the Annual Bonus applicable to the Annual Bonus
Period during which the Date of Termination occurs based upon actual
performance for the Annual Bonus Period (such pro rata bonus shall be
based on the portion of such Annual Bonus Period that expired prior to the
Date of Termination, shall be payable following such Annual Bonus Period
in accordance with Company policy and shall be determined without regard
to any reduction in earnings on account of
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interest paid on additional debt incurred by the Company in connection
with any Change in Control).
1.3 Termination of Employment By the Company Without Cause or By the Executive
for Good Reason. If, before the end of the Contract Term, the Executive's
employment is terminated by the Company without Cause or by the Executive
for Good Reason, the Executive shall receive the following:
(a) In a lump sum, that portion of the Executive's annual base salary which is
accrued but unpaid as of the Date of Termination and any unpaid Annual
Bonus applicable to any Annual Bonus Period which ended prior to the Date
of Termination;
(b) In monthly payments, the amount of the Executive's annual base salary (not
taking into account any reductions which would constitute Good Reason)
which would be payable for the period beginning on the Date of Termination
and ending on the last day of the Contract Term;
(c) Following the Annual Bonus Period during which the Date of Termination
occurs and in accordance with Company policy, a pro rata portion of the
Annual Bonus applicable to such Annual Bonus Period based upon actual
performance for the Annual Bonus Period (such pro rata bonus shall be
based on the portion of such Annual Bonus Period that expired prior to the
Date of Termination, shall be payable following such Annual Bonus Period
in accordance with Company policy and shall be determined without regard
to any reduction in earnings on account of interest paid on additional
debt incurred by the Company in connection with any Change in Control);
and
(d) The benefits to which the Executive was entitled during the Contract Term.
(The amount of any benefits shall be reduced or eliminated to the extent
the Executive becomes entitled to duplicative benefits by virtue of
his/her subsequent employment after the Date of Termination.)
1.4 Other Termination Benefits. In addition to any payments or benefits
provided to Executive upon termination of employment under this Agreement,
the Executive shall also be entitled to any payments or benefits
explicitly provided under the terms of any plan, policy or program of the
Company which may then be applicable to Executive. In the event that
Executive is entitled upon termination of employment to any payment or
benefits in the nature of severance or separation pay under state or
Federal law, or under the law of any foreign country, then the payments
and benefits payable hereunder shall be reduced dollar for dollar by the
equivalent value of any such entitlement.
Certain Definitions
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2.1 "Annual Bonus" means the annual cash bonus paid to the Executive pursuant
to the Company's annual bonus plan. During the Contract Term, the Company
shall maintain an annual bonus plan that provides the Executive with
benefits that are substantially equivalent to the benefits provided under
the Company's current annual bonus plan.
2.2 "Annual Bonus Period" means the annual period on which the Executive's
Annual Bonus is based.
2.3 "Contract Term" means the period commencing on January 1, 1999 and ending
on December 31, 1999; provided, that, commencing January 1, 2000 the
Contract Term shall be automatically extended by one day on each day the
Executive remains employed.
2.4 "Date of Termination" means the date on which the Executive's employment
with the Company terminates.
2.5 "Disability" means any medically determinable physical or mental
impairment that can be expected to last for a continuous period of not
less than six (6) months, and that renders the Executive unable to perform
the duties required under this Agreement. The date of the determination of
Disability is the date on which the Executive is certified as having
incurred a Disability by a physician acceptable to the Company.
2.6 "Cause" means (a) the Executive's committing any felony or other crime
involving dishonesty; (b) any serious misconduct in the course of the
Executive's employment; or (c) the Executive's habitual neglect of the
Executive's duties (other than on account of Disability), except that (d)
Cause shall not mean:
(1) bad judgment or negligence other than habitual neglect of duty;
(2) any act or omission believed by the Executive in good faith to have been
in or not opposed to the interest of the Company (without intent of the
Executive to gain therefrom, directly or indirectly, a profit to which the
Executive was not legally entitled); or
(3) any act or omission with respect to which a determination could properly
have been made that the Executive met the applicable standard of conduct
for indemnification or reimbursement under the By-Laws of the Company, any
applicable indemnification agreement or the laws and regulations under
which the Company is governed, in each case in effect at the time of such
act or omission.
2.7 "Change in Control" means the occurrence of any of the following events:
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(a) any "person" (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the "Exchange Act") and as used in Sections 1
3(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial
owner" (as defined in Rule 1 3d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities
eligible to vote for the election of the Board of Directors of the Company
(the "Company Voting Securities") provided, however, that the event
described in this paragraph shall not be deemed to be a Change in Control
by virtue of any of the following acquisitions: (i) by the Company or,
direct or indirect, majority-owned subsidiaries of the Company, (ii) by
any employee benefit plan sponsored or maintained by the Company or any
corporation controlled by the Company, (iii) by any underwriter
temporarily holding securities pursuant to an offering of such securities,
(iv) pursuant to a Non-Control Transaction (as defined in paragraph (c)),
(v) pursuant to any acquisition by the Executive or any group of persons
including the Executive, or (vi) in which Company Voting Securities are
acquired from the Company, if a majority of the Board of Directors of the
Company approves a resolution providing expressly that the acquisition
pursuant to this clause (vi) does not constitute a Change in Control under
this paragraph (a);
(b) individuals who, on January 1, 1999, constitute the Board of Directors of
the Company (the "Incumbent Board") cease for any reason to constitute at
least a majority thereof, provided that (i) any person becoming a director
subsequent to January 1, 1999, whose election, or nomination for election,
by the Company's shareholders was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board (either by
a specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without objection to
such nomination) shall be, for purposes of this paragraph (b), considered
as though such person were a member of the Incumbent Board; Provided
however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest
with respect to directors or any other actual or threatened solicitation
of proxies or consents by or on behalf of any person other than the Board
of Directors shall be deemed to be a member of the Incumbent Board;
(c) the consummation of a merger or consolidation or similar form of corporate
reorganization, or sale or other disposition of all or substantially all
of the assets, of the Company (a "Business Combination") is consummated,
unless immediately following such Business Combination: (i) more than 50%
of the total voting power of the corporation resulting from such Business
Combination (including, without limitation, for purposes of making such
50% determination, any shares owned through any entity which directly or
indirectly has beneficial ownership of the Company Voting Securities or
all or substantially all of the Company's assets) eligible to elect
directors of such corporation is represented by shares held by
shareholders of the Company immediately prior to such Business Combination
(either by remaining outstanding or being converted), (ii) no person
(other than any holding company resulting from such Business Combination,
any employee benefit
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plan sponsored or maintained by the Company (or the corporation resulting
from such Business Combination), or any person which beneficially owned,
immediately prior to such Business Combination, directly or indirectly,
30% or more of the Company Voting Securities) becomes the beneficial
owner, directly or indirectly of 30% or more of the total voting power of
the outstanding voting securities eligible to elect directors of the
corporation resulting from such Business Combination, and (iii) at least a
majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or action of
the Board of Directors, providing for such Business Combination (a
"Non-Control Transaction"); or
(d) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of more than 30% of the
Company Voting Securities as a result of the acquisition of Company Voting
Securities by the Company which, by reducing the number of Company Voting
Securities outstanding, increases the percentage of shares beneficially owned by
such person; provided, that if a Change in Control would occur as a result of
such an acquisition by the Company (if not for the operation of this sentence),
and after the Company's acquisition such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, then a
Change in Control shall occur.
2.8 "Good Reason" means the occurrence of any one of the following events:
(a) assignment to the Executive of any duties materially and adversely
inconsistent with the Executive's current position (or such other position
to which he/she may be promoted) (but excluding a diminution of title
which does not result in a diminution of status, offices, or
responsibilities), or any other action by the Company which results in a
material and adverse change in such position, status, offices, titles or
responsibilities;
(b) the failure of the Company to assign this Agreement to a successor to the
Company,
(c) any reduction in the Executive's annual base salary, or
(d) any material adverse change to the terms and conditions of the Executive's
employment under this Agreement,
if the Company fails to cure such event within thirty (30) days after written
notice from the Executive; provided, however, that if the event is intentional,
knowing or repeated, the Executive shall not be required to provide written
notice or an opportunity to cure.
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Restrictive Covenants
3.1 Trade Secrets. Confidential and Proprietary Business Information
(a) The Company has advised the Executive and the Executive acknowledges that
it is the policy of the Company to maintain as secret and confidential all
Protected Information (as defined below), and that Protected Information
has been and will be developed at substantial cost and effort to the
Company. "Protected Information" means trade secrets, confidential and
proprietary business information of the Company, any information of the
Company other than information which has entered the public domain (unless
such information entered the public domain through the efforts of or on
account of the Executive), and all valuable and unique information and
techniques acquired, developed or used by the Company relating to its
business, operations, employees and customers, which give the Company a
competitive advantage over those who do not know the information and
techniques and which are protected by the Company from unauthorized
disclosure, including by not limited to, customer lists (including
potential customers), sources of supply processes, plans, materials,
pricing information, internal memoranda, marketing plans, internal
policies, and products and services which may be developed from time to
time by the Company and its agents or employees.
(b) The Executive acknowledges that the Executive will acquire Protected
Information with respect to the Company and its successors in interest,
which information is valuable, special and a unique asset of the Company's
business and operations and that disclosure of such Protected Information
would cause irreparable damage to the Company.
(c) The Executive shall not, directly or indirectly, divulge, furnish or make
accessible to any person, firm, corporation, association or other entity
(otherwise than as may be required in the regular course of the
Executive's employment) nor use in any manner, either during or after
termination of employment by the Company and Protected Information or
cause any such information of the Company to enter the public domain.
3.2 Non-Competition.
(a) The Executive agrees that the Executive shall not during the Executive's
employment with the Company, and, if the Executive's employment is
terminated for any reason other than termination of employment without
Cause or for Good
(b) Reason, thereafter for a period of one (1) year, directly or indirectly,
in any capacity, engage or participate in or become employed by or render
advisory or consulting or other services in connection with any Prohibited
Business as defined below.
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(b) The Executive agrees that the Executive shall not during the Executive's
employment with the Company, and, if the Executive's employment is
terminated for any reason, thereafter for a period of one (1 ) year, make
any financial investment, whether in the form of equity or debt, or own
any interest, directly or indirectly, in any Prohibited Business. Nothing
in this Section 7.02 shall, however, restrict the Executive from making
any investment in any Company whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market;
provided that (i) such investment does not give the Executive the right or
ability to control or influence the policy decisions of any Prohibited
Business, and (ii) such investment does not create a conflict of interest
between the Executive's duties hereunder and the Executive's interest in
such investment.
(c) "Prohibited Business" shall be defined as any business and any branch,
office or operation thereof, which is a direct and material competitor of
the Company wherever the Company does business, in the United States or
abroad, and which has established or seeks to establish contact, in
whatever form (including but not limited to solicitation of sales, or the
receipt or submission of bids) with any entity who is at any time a
client, customer or supplier of the Company (including but not limited to
all subdivisions of the federal government).
(d) Notwithstanding any other provisions in this Section 3.2, this Section 3.2
shall not apply if the Executive's employment with the Company terminates
for any reason during the one-year period following a Change in Control.
3.3 Undertaking Regarding Employees. From the date hereof until two years
after the Executive's Date of Termination, the Executive shall not,
directly or indirectly, (a) encourage any employee of the Company or its
successors in interest to leave their employment with the Company or its
successors in interest; or (b) employ, hire, solicit or, cause to be
employed or hired or solicited (other than by the Company or its
successors in interest), or establish a business with, or encourage others
to hire, any person who within two (2) years prior thereto was employed by
the Company or its successors in interest, to leave their employment with
the Company or its successors in interest.
3.4 Disclosure of Employee-Created Trade Secrets. Confidential and Proprietary
Business Information. The Executive agrees to promptly disclose to the
Company all Protected Information developed in whole or in part by the
Executive during the Executive's employment with the Company and which
relate to the Company's business. Such Protected Information is, and shall
remain, the exclusive property of the Company. All writings created during
the Executive's employment with the Company (excluding writings unrelated
to the Company's business) are considered to be "works-for-hire. for the
benefit of the Company and the Company shall own all rights in such
writings.
Successors
4.1 The Company shall cause this Agreement to be binding on the Company and
any successor to the Company.
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INTERMET CORPORATION
/s/ John Doddridge
- -----------------------------------
By: John Doddridge
Chairman of the Board and
Chief Executive Officer
/s/ Laurence Vine-Chatterton
- -----------------------------------
Laurence Vine-Chatterton
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