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EXHIBIT 9
AGREEMENT
This Agreement (the "Agreement") is made as of the 17th day of May, 1996,
between Douglas & Lomason Company, a Michigan corporation (hereinafter called
the "Company") and
(hereinafter called "Employee").
WHEREAS, should the Company receive any proposal for a Change in Control,
as defined in Section 1 hereof, the Board of Directors of the Company (the
"Board") believes it imperative that the Company and the Board be able to rely
upon Employee to continue in his or her position, and that they be able to
receive and rely upon Employee's advice, if they request it, as to the best
interests of the Company and its shareholders, without concern that Employee
might be distracted or his or her advice affected by the personal uncertainties
and risks created by such a proposal;
NOW, THEREFORE, to induce Employee to remain in the employ of the Company,
and for other good and valuable consideration, the Company and Employee agree as
follows:
1. Definitions.
(i) "Change in Control" shall mean the occurrence of any of the
following events:
(a) a third "person," including a "group," becomes the "beneficial
owner" (as these terms are defined in or for the purposes of Section
13(d) of the Securities Exchange Act of 1934, as in effect on the date
hereof) of shares of the Company having more than 50% of the total
number of votes that may be cast for the election of Directors of the
Company;
(b) the merger or consolidation of the Company with or into any
other corporation or entity or the merger or consolidation of any other
corporation or entity into or with the Company, in which merger or
consolidation those persons who are shareholders of the Company
immediately prior to such merger or consolidation do not receive, as a
result of such merger or consolidation, more than 50% in voting power of
the outstanding capital stock of the surviving corporation;
(c) any sale or transfer in a single transaction or series of
related transactions (other than a public offering of securities) of
more than 50% of fair market value of the Company's assets; or
(d) the Board determines in its sole and absolute discretion that
there has been a change in control of the Company.
(ii) "Controlling portion of the Company's stock" shall mean shares of
the Company having more than 50% of the total number of votes that may be
cast for the election of Directors of the Company.
(iii) "Company" shall mean Douglas & Lomason Company and any successor
(whether such succession is direct or indirect, by purchase, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
business and/or assets of the Company.
(iv) "Good Reason," when used with reference to a voluntary
termination by Employee of Employee's employment with the Company, shall
mean:
(a) the assignment to Employee of any duties substantially
inconsistent with, or the reduction of powers or functions associated
with, Employee's positions, duties, responsibilities and status with the
Company as they existed immediately prior to a Change in Control;
(b) a reduction by Company in Employee's base salary as in effect
on the date hereof or as the same may be increased from time to time;
(c) a change in Employee's principal work location outside of the
Farmington Hills, Michigan metropolitan area, except for required travel
on the Company's business to an extent substantially consistent with
Employee's business travel obligations immediately prior to a Change in
Control;
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(d) the failure by the Company to obtain an agreement to expressly
assume this Agreement from any successor (whether such succession is
direct or indirect by purchase, merger, consolidation, liquidation or
otherwise) to substantially all of the business and/or assets of the
Company or from a person or group (as these terms are defined in or for
the purposes of Section 13(d) of the Securities Exchange Act of 1934, as
in effect on the date hereof) acquiring a controlling portion of the
Company's stock; or
(e) any purported termination of Employee's employment by the
Company during the Contract Period which is not effected pursuant to the
requirements of this Agreement.
(v) "Contract Period" shall mean the period commencing on the day a
Change in Control takes place and continuing for three (3) years. A
Contract Period shall only exist for the first Change in Control which
takes place after the date hereof.
(vi) "Disability" shall mean a physical or mental incapacity of
Employee which entitles Employee to benefits under the long term disability
plan applicable to Employee and maintained by the Company as in effect
immediately prior to the Change in Control. However, if the Company has no
such plan at that time, "Disability" shall mean any physical or mental
condition that renders Employee unable to substantially perform Employee's
duties with the Company for a period exceeding six (6) consecutive months
or for a period exceeding four (4) months if a physician selected by the
Company, and reasonably satisfactory to Employee, specializing in the area
of the disability in question determines in good faith that Employee will
be permanently unable to substantially perform Employee's duties with the
Company.
(vii) "Cause," when used in connection with the termination of
Employee's employment by the Company, shall mean (a) the willful and
continued failure by Employee substantially to perform Employee's duties
and obligations to the Company (other than any such failure resulting from
Employee's Disability), (b) the willful engaging by Employee in misconduct
which is materially injurious to the Company, monetarily or otherwise, or
(c) a conviction for or plea of nolo contendere to a felony under the laws
of any state within the United States or of the United States. For purposes
of this definition, no act, or failure to act, on Employee's part shall be
considered "willful" unless done, or omitted to be done, by Employee in bad
faith and without reasonable belief that Employee's action or omission was
in the best interests of the Company.
(viii) "Without Cause," when used in connection with the termination
of Employee's employment by the Company, shall mean any termination of
employment of Employee by the Company which is not a termination of
employment for Cause or for Disability.
(ix) "Termination Date" shall mean the effective date as provided
hereunder of the termination of Employee's employment.
2. Application of this Agreement: Term of Agreement. This Agreement shall
apply with respect to any termination of employment of Employee which occurs
during the Contract Period. It shall not apply to any termination of employment
of Employee which occurs other than during the Contract Period. As provided in
the definition of Contract Period, a Contract Period shall only exist for the
first Change in Control after the date hereof. This Agreement shall terminate
automatically upon termination of employment of Employee by reason of Employee's
death. Continuation of employment with a successor to the Company, as described
in Section 1 (iii), shall not alone constitute termination of Employee's
employment. This Agreement shall also terminate upon the expiration of five (5)
years from the date hereof unless the Contract Period has commenced on or prior
to the expiration of such five (5) years, in which case this Agreement will
terminate upon the expiration of the Contract Period. Any such termination shall
not affect obligations incurred prior to the date of termination, including any
obligation to provide benefits under Section 5.
3. Termination of Employment of Employee By the Company During the Contract
Period.
(i) During the Contract Period, the Company shall have the right to
terminate Employee's employment hereunder for Cause, for Disability or
Without Cause upon compliance with the procedures hereinafter specified.
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(ii) Termination of Employee's employment for Disability shall become
effective no sooner than thirty (30) days after a notice of intent to
terminate Employee's employment, specifying Disability as the basis for
such termination, is given to Employee by the Board or by a Committee of
the Board.
(iii) Termination of Employee's employment for Cause shall not be
deemed effective unless and until there shall have been delivered to
Employee a copy of a notice of termination from the Chief Executive Officer
of the Company, after reasonable notice to Employee and an opportunity for
Employee, together with Employee's counsel, to be heard before the Chief
Executive Officer, finding that in the good faith opinion of the Chief
Executive Officer Cause existed and specifying the particulars thereof in
detail.
(iv) The Company shall have the absolute right to terminate Employee's
employment Without Cause at any time by vote of a majority of the whole
Board. Termination of Employee's employment Without Cause shall be
effective five (5) business days after the date of the Company's giving to
Employee a notice of termination, specifying that such termination is
Without Cause.
(v) Upon a termination of Employee's employment for Cause or for
Disability, Employee shall have no right to receive any compensation or
benefits hereunder. Upon a termination of Employee's employment Without
Cause, Employee shall be entitled to receive the benefits provided in
Section 5 hereof.
4. Termination of Employment By Employee During Contract Period. During the
Contract Period, Employee shall be entitled to terminate employment with the
Company for any reason and, if such termination is for Good Reason, to receive
the benefits provided in Section 5 hereof. Employee shall give the Company
notice of voluntary termination of employment, which notice need specify only
Employee's desire to terminate employment and, if such termination is for Good
Reason, also set forth in reasonable detail the facts and circumstances claimed
by Employee to constitute Good Reason. Any notice by Employee pursuant to this
Section shall be effective five (5) business days after the date it is given by
Employee.
5. Benefits Upon Termination in Certain Circumstances. Upon the termination
of the employment of Employee by the Company pursuant to Section 3(iv) or by
Employee for Good Reason pursuant to Section 4 hereof, Employee shall be
entitled to receive the following benefits:
(i) The Company shall pay to Employee, not later than the Termination
Date, a lump sum cash amount equal to the sum of (a) the full base salary
earned by Employee through the Termination Date and unpaid at the
Termination Date, (b) the amount of any base salary attributable to
vacation earned by Employee but not taken before the Termination Date, and
(c) all other amounts earned by Employee and unpaid at the Termination
Date.
(ii) The Company shall pay to Employee a cash amount equal to
thirty-six (36) times the Employee's base monthly salary at the rate in
effect immediately prior to the Termination Date. Such sum shall be paid at
the option of Employee either (i) in a lump sum, (ii) in monthly
installments over a period of 36 months, or (iii) in monthly installments
with a lump sum payable upon request from Employee.
(iii) The Company shall further pay to Employee a pro-rata amount of
any bonus award earned by the Employee during the year of the Termination
Date under the Company's Annual Incentive Plan.
(iv) The Company shall also pay to Employee all legal fees and
expenses incurred by Employee as a result of successfully enforcing any
right or benefit provided to Employee by this Agreement.
(v) The Company shall pay, when due, for outplacement services as
requested by Employee to assist in locating new employment, up to a maximum
amount of $30,000.
(vi) The Company will continue to provide Employee with an automobile
for a period of six months after the Termination Date.
(vii) The Company shall maintain in full force and effect for
Employee's continued benefit until the earlier of (a) the end of the
Contract Period or (b) Employee's commencement of employment with a new
employer, any medical insurance plans or medical insurance arrangements in
which Employee was
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entitled to participate upon the Termination Date, provided that Employee's
continued participation is possible under the general terms and provisions
of such plans or arrangements. In the event that Employee's participation
in any such plans or arrangements is barred, the Company shall arrange to
provide Employee with benefits substantially similar to those which
Employee is entitled to receive under such plans or arrangements. Should
the medical insurance plans or arrangements provided by Employee's new
employer not entitle Employee or Employee's dependents (a) to any coverage
during an initial qualification period or (b) to coverage for any condition
which is considered a pre-existing condition under the new employer's plan
and which was covered under the Company's medical insurance plans or
arrangements at the Termination Date, then notwithstanding Employee's
employment, the Corn any shall continue to provide medical benefits as
stated above in this Section 5(v) during such qualification period (if
clause (a) of this sentence is applicable) and at least for such
pre-existing condition (if clause (b) of this sentence is applicable).
(viii) The Company shall assign to Employee without any cost to
Employee the Company's interest in any insurance policies issued on the
life of Employee.
6. Excess Parachute Payment. In the event that it is determined that the
payments and benefits to Employee provided for in Section 5 hereof shall
constitute an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Internal Revenue Code of 1986, as amended and any successors
thereto (the "Code"), and would be subject to an excise tax pursuant to Section
4999 of the Code, Employee shall be entitled to receive additional payments from
the Company in an amount equal to that gross amount which when all additional
income or excise taxes payable by Employee by reason of the imposition of such
excise tax pursuant to Section 4999 of the Code are deducted therefrom is equal
to the net amount which Employee was intended to receive pursuant to Section 5
of this Agreement.
7. Other Employment. Employee shall not be required to mitigate the amount
of any payment or benefit provided for in Section 5 by seeking other employment
or otherwise. The amount of any such payment or benefit shall not be reduced by
any compensation earned or benefit received by Employee as the result of other
employment.
8. Life Insurance. During the Contract Period the Company will continue to
maintain in effect and pay the premiums on any insurance policies on the life of
Employee which are in effect on the effective date of a Change in Control.
9. Successors: Binding Agreement.
(i) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, liquidation or otherwise) to
all or substantially all of the business and/or assets of the Company, or
any person or group (as these terms are defined in or for the purposes of
Section 13(d) of the Securities Exchange Act of 1934, as in effect on the
date hereof acquiring a controlling portion of the Company's stock, to
agree to expressly assume the obligation of the Company to perform this
Agreement upon or prior to such succession taking place. A copy of such
assumption and agreement shall be delivered to Employee promptly after its
execution by the successor or such person or group. Failure of the Company
to obtain such agreement upon or prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Employee
to benefits as set forth above in Sections 4 and 5. Further, if the Company
fails to obtain such agreement upon or prior to the effectiveness of any
such succession, the Company shall place in trust or escrow, with an
independent third party as trustee or escrow agent, for the benefit of
Employee cash in an amount equal to the total of the following: the maximum
amounts which are or may become payable to Employee by reason of Section
5(i), (ii), (iv) and (v). This amount shall not be discounted to any
present value. All or any portion of such amount held in trust or escrow
shall be paid to Employee at the times required by Section 5 hereof, and
any remaining balance shall be returned to the Company only after there are
no obligations of the Company under Section 5 that may be required to be
performed in the future.
(ii) This Agreement is personal to Employee and Employee may not
assign or transfer any part of Employee's rights or duties hereunder, or
any compensation due to Employee hereunder, to any other
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person, except that this Agreement shall inure to the benefit of and be
enforceable by Employee's personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees or beneficiaries.
10. Modification: Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in a writing signed by Employee and by the Company. Waiver by any party of any
breach of or failure to comply with any provision of this Agreement by the other
party shall not be construed as, or constitute, a continuing waiver of such
provision, or a waiver of any other breach of, or failure to comply with, any
other provision of this Agreement.
11. Arbitration of Disputes.
(i) Any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation or validity hereof shall
be settled exclusively and finally by arbitration. It is specifically
understood and agreed that any disagreement, dispute or controversy which
cannot be resolved between the parties, including without limitation any
matter relating to the interpretation of this Agreement, may be submitted
to arbitration irrespective of the magnitude thereof, the amount in
controversy or whether such disagreement, dispute or controversy would
otherwise be considered justiciable or ripe for resolution by a court or
arbitral tribunal.
(ii) The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA").
(iii) The arbitral tribunal shall consist of one arbitrator. The
parties to the arbitration jointly shall directly appoint such arbitrator
within 30 days of initiation of the arbitration. If the parties shall fail
to appoint such arbitrator as provided above, such arbitrator shall be
appointed by the AAA as provided in the Arbitration Rules and shall be a
person who has had substantial experience in mergers and acquisitions. The
Company shall pay all of the fees, if any, and expenses of such arbitrator.
(iv) The arbitration shall be conducted in the metropolitan Detroit,
Michigan area or in such other city in the United States of America as the
parties to the dispute may designate by mutual written consent.
(v) At any oral hearing of evidence in connection with the
arbitration, each party thereto or its legal counsel shall have the right
to examine its witnesses and to cross-examine the witnesses of any opposing
party. No evidence of any witness shall be presented in form unless the
opposing party or parties shall have the opportunity to cross-examine such
witness, except as the parties to the dispute otherwise agree in writing or
except under extraordinary circumstances where the interests of justice
require a different procedure.
(vi) Any decision or award of the arbitral tribunal shall be final and
binding upon the parties to the arbitration proceeding. The parties hereto
agree that the arbitral award may be enforced against the parties to the
arbitration proceeding or their assets wherever they may be found and that
a judgment upon the arbitral award may be entered in any court having
jurisdiction.
(vii) Nothing herein contained shall be deemed to give the arbitral
tribunal any authority, power, or right to alter, change, amend, modify,
add to, or subtract from any of the provisions of this Agreement.
12. Notice. All notices, requests, demands and other communications
required or permitted to be given by either party to the other party by this
Agreement (including, without limitation, any notice of termination of
employment and any notice under the Arbitration Rules of an intention to
arbitrate) shall be in writing and
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shall be deemed to have been duly given when delivered personally or received by
certified or registered mail, return receipt requested, postage prepaid, at the
address of the other party, as follows:
If to the Company, to:
Douglas & Lomason Company
24600 Hallwood Court
Farmington Hills, MI 48335-1671
Attention: Chairman of the Board of Directors
If to Employee, to:
Either party hereto may change its address for purposes of this Section by
giving fifteen (15) days' prior notice to the other party hereto.
13. Severability. If any term or provision of this Agreement or the
application hereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement or the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
14. Headings. The headings in this Agreement are inserted for convenience
of reference only and shall not be a part of or control or affect the meaning of
this Agreement.
15. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original.
16. Governing Law. This Agreement shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State of Michigan,
without regard to the conflicts of laws principles of such state.
17. Payroll and Withholding Taxes. All payments to be made or benefits to
be provided hereunder by the Company shall be subject to reduction for any
applicable payroll-related or withholding taxes.
18. Entire Agreement. This Agreement supersedes any and all other oral or
written agreements heretofore made relating to the subject matter hereof and
constitutes the entire agreement of the parties relating to the subject matter
hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Douglas & Lomason Company
- --------------------------------------------- By:
(Employee Signature) -----------------------------------------------
Chairman of the Board
- --------------------------------------------- and President
(Employee)
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