================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): DECEMBER 20, 2006
DURA AUTOMOTIVE SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 000-21139 38-3185711
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
2791 RESEARCH DRIVE, ROCHESTER HILLS, MICHIGAN 48309
(Address of Principal Executive Offices, including Zip Code)
(248) 299-7500
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
================================================================================
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
In connection with the execution of an Employment Agreement between Dura
Automotive Systems, Inc. (the "Company") and Mr. David L. Harbert, the Company
entered into a related services agreement with Tatum, LLC (the "Tatum
Agreement"), to provide resources and support in connection with Mr. Harbert's
employment with the Company. The Tatum Agreement was executed by the parties
thereto on December 20, 2006, and sets forth the rights of the Company, through
Mr. Harbert, to use such resources for the benefit of the Company and for the
payment for such services. The Tatum Agreement is subject the approval of the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court").
The following is a summary of the principal terms of the Tatum Agreement:
(i) Beginning Date. Subject to Bankruptcy Court approval, the Tatum
Agreement will be deemed effective as of December 9, 2006.
(ii) Compensation. The Company will pay directly to Tatum a fee equal
to 25% of the Mr. Harbert's Salary (initially $5,400
semi-monthly) as partial compensation for resources provided.
Should the Tatum Partner be paid a bonus the Company will pay
Tatum (whether cash or equity) 25% of the total bonus paid by the
Company during the term of this agreement.
(iii) Converting Interim to Permanent. The Company will have the
opportunity to make the Tatum Partner a full-time permanent
member of Company management at any time during the term of this
agreement by entering into another form of Tatum agreement, the
term so which will be negotiated at such time.
(iv) Termination. This agreement will terminate immediately upon the
earlier of the effective date of termination or expiration of the
Tatum Partner's employment with the Company or upon the Tatum
Partner ceasing to be a partner of Tatum.
(v) Hiring Tatum Partner Outside of Agreement. During the twelve
(12)-month period following termination or expiration of this
agreement, other than in connection with another Tatum agreement,
the Company will not employ the Tatum Partner, or engage the
Tatum Partner as an independent contractor, to render services of
substantially the same nature as those for which Tatum is making
the Tatum Partner available pursuant to this agreement. The
parties recognize and agree that a breach by the Company of this
provision would result in the loss to Tatum of the Tatum
Partner's valuable expertise and revenue potential and that such
injury will be impossible or very difficult to ascertain.
Therefore, in the event this provision is breached, Tatum will be
entitled to receive as liquidated damages an amount equal to
forty-five percent (45%) of the Tatum Partner's Annualized
Compensation (as defined below), which amount the parties agree
is reasonably proportionate to the probable loss to Tatum and is
not intended as a penalty. If, however, a court or arbitrator, as
applicable, determines that liquidated damages are not
appropriate for such breach, Tatum will have the right to seek
actual damages. The amount will be due and payable to Tatum upon
written demand to the Company. For this purpose, "Annualized
Compensation" will mean the Tatum Partner's most recent annual
Salary and the maximum amount of any bonus for which the Tatum
Partner was eligible with respect to the then current bonus year.
(vi) Insurance. The Company will provide Tatum or the Tatum Partner
with written evidence that the Company maintains directors' and
officers' insurance covering the Partner as it covers similarly
situated executive employees of the Company and at no additional
cost to the Tatum Partner, and the Company will maintain such
insurance at all times while this agreement remains in effect.
ITEM 5.02. DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
On December 20, 2007, the Board of Directors of the Company appointed Mr.
David L. Harbert as the Chief Financial Officer of the Company. In connection
therewith, the Company entered into an employment agreement with Mr. Harbert,
which is subject to obtaining appropriate approval of the Bankruptcy Court.
Mr. Harbert has been a partner of Tatum CFO Partners, LLP, a professional
services firm, since 2003. As a Tatum partner, Mr. Harbert has served as Interim
Chief Financial Officer for: (i) Ensesco Group, Inc., a leading distributor of
giftware, and home and garden decor products; (ii) Truck Bodies & Equipment
International, a manufacturer of truck dump bodies and hoists; (iii) Wausau
Financial Systems, Inc., a provider of enterprise transaction processing
solutions for financial institutions; and (iv) CCC Information Services Group,
Inc., a supplier of advanced software, communications systems and internet
technology solutions to the automotive collision repair market. Prior to joining
Tatum, Mr. Harbert served as a chief financial officer and chief operations
officer for three Citigroup Venture Capital "CVC" Portfolio Companies over a
nine year period (FastenTech, Paper-Pak Products and Delco Remy International).
He was also Chief Financial Officer of Applied Power, Inc, Vice President Chief
Financial Officer of SSA, Inc., Chief Financial Officer of Tenneco Automotive,
and Controller for GenCorp. Mr. Harbert is 64 years old.
The following is a summary of the principal terms of the employment
agreement executed between Mr. Harbert (the "Employee") and the Company:
(vii) Beginning Date. Subject to Bankruptcy Court approval, the
agreement will be deemed effective as of December 9, 2006 (the
"Beginning Date").
(viii) Position and Duties. During the term of employment, the
Employee will be employed as the Chief Financial Officer of the
Company and shall perform all duties as are consistent therewith
as the Chief Executive Officer or the Board of Directors of the
Company shall designate. The Employee shall report directly to
the Company's Chief Executive Officer. During his employment, the
Employee shall devote his full time and attention and expend his
best efforts, energies and skills on behalf of the Company in the
performance of the foregoing duties and responsibilities.
(ix) Compensation. The Company shall pay to the Employee a salary of
$43,200 a month ("Salary") payable in accordance with the
Company's normal payroll periods and procedures, but no less
frequently than on a semi-monthly basis. The Employee's Salary
may be increased from time to time by the Company in its
discretion. Should the Company elect to terminate the agreement
within 90 days of the Beginning Date, the Company will pay the
Employee an early termination fee ("Early Termination Fee") in an
amount such that the total of Salary and Early Termination Fee
paid is equal to $2,250 per day worked by the Employee from the
Beginning Date to such date of termination of the agreement. The
Early Termination fee, if any, will be paid to the Employee upon
a termination of the agreement that occurs within 90 days of the
Beginning Date.
(x) Other Compensation Provisions. During the course of the
Employee's employment hereunder, the Employee will remain a
Partner of Tatum. As a Partner of Tatum, Employee will share with
Tatum a portion of his economic interest in any stock options or
equity bonus that the Company may, in its discretion, grant the
Employee and may also share with Tatum a portion of any cash
bonus and severance the Company may, in its discretion, pay the
Employee, but only to the extent specified in that certain
Interim Engagement Resources Agreement between the Company and
Tatum (the "Resources Agreement"). The Company acknowledges and
consents to such arrangement. The Company will promptly reimburse
the Employee directly for reasonable travel and out-of-pocket
business expenses in accordance with the expense reimbursement
policies and procedures of the Company and a per diem of $50.00.
2
(xi) Benefits. The Employee will be eligible for (1) any 401(k) plan
offered to senior management of the Company in accordance with
the terms and conditions of such 401(k) plan, (2) holidays
consistent with the Company's policy as it applies to senior
management, and (3) vacation accrued at 1.67 days per month. The
Employee will be exempt from any waiting periods required for
eligibility under any benefit plan of the Company, other than a
qualified retirement plan or if such exemption would otherwise
cause impermissible discrimination under the income tax laws
applicable to employee benefit plans.
(xii) Insurance and Indemnification. The Employee must receive written
evidence that the Company maintains directors' and officers'
insurance to cover him in an amount comparable to that provided
to senior management of the Company at no additional cost to the
Employee, and the Company will maintain such insurance at all
times while the agreement remains in effect. Furthermore, the
Company will maintain such insurance coverage with respect to
occurrences arising during the term of the agreement for at least
three years following the termination or expiration of the
agreement or will purchase a directors' and officers' extended
reporting period, or "tail," policy to cover the Employee. The
Company has also agreed to indemnify the Employee for any claim
arising from, related to or in connection with the Employee's
performance of the services described in the agreement pursuant
to the terms and conditions set forth therein.
(xiii) Termination. The Company may terminate the Employee's
employment for any reason upon at least 30 days' prior written
notice to the Employee, such termination to be effective on the
date specified in the notice, provided that such date is no
earlier than 30 days from the date of delivery of the notice.
Likewise, the Employee may terminate his employment for any
reason upon at least 30 days' prior written notice to the
Company, such termination to be effective on the date 30 days
following the date of the notice. The Employee will continue to
render services and to be paid during such 30-day period,
regardless of who give such notice. Notwithstanding the above:
(1) the Employee may terminate the agreement immediately if the
Company has not remained current in its obligations under the
agreement or the Tatum Agreement or if the Company engages in or
asks the Employee to engage in or to ignore any illegal or
unethical conduct; (2) the Company may terminate the agreement
immediately for cause; and (3) either party may terminate the
agreement in the event the Bankruptcy Court declines to approve
the agreement on or before January 23, 2007. For purposes of this
paragraph, "cause" shall be defined as (a) the conviction of the
Employee, or an agreement to a plea of nolo contendere to, any
felony or other crime involving moral turpitude, (b) willful and
continuing refusal to substantially perform his duties, or (c) in
performing such duties, conduct constituting gross negligence or
gross misconduct. The agreement will also terminate immediately
upon the death or disability of the Employee. Upon termination of
the agreement, the Employee's salary will be prorated for the
final pay period based on the number of days in the final pay
period up to the effective date of termination. Except for any
Early Termination Fee that may be payable thereunder, no other
severance payments or benefits shall be provided by the Company
to the Employee.
Effective December 20, 2007, Mr. Keith R. Marchiando ceased to serve as the
Company's Chief Financial Officer.
3
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) None
(b) None
(c) None
(d) None
4
SIGNATURES
According to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on December 26, 2006.
DURA AUTOMOTIVE SYSTEMS, INC.
/s/ Lawrence A. Denton
----------------------------------------
Date: December 26, 2006 By: Lawrence A. Denton
Its: Chairman of the Board, President
and Chief Executive Officer
5