Exhibit 10-E(1)
EMPLOYMENT AGREEMENT
BETWEEN
DANA CORPORATION
AND
WILLIAM J. CARROLL
DATED FEBRUARY 2, 2004
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
1. Employment and Term..................................................................................... 1
2. Position and Duties of the Executive.................................................................... 1
(a) Position....................................................................................... 1
(b) Scope of Duties................................................................................ 2
3. Compensation............................................................................................ 2
(a) Salary......................................................................................... 2
(b) Additional Compensation........................................................................ 3
(c) Incentive, Stock and Savings Plans............................................................. 3
(d) Retirement and Welfare Benefit Plans........................................................... 3
(e) Expenses....................................................................................... 4
(f) Fringe Benefits................................................................................ 4
(g) Office and Support Staff....................................................................... 4
(h) Vacation and Other Absences.................................................................... 4
(i) Certain Retirement and Severance Definitions................................................... 4
4. Termination of Employment............................................................................... 5
(a) Death or Disability............................................................................ 5
(b) Cause.......................................................................................... 5
(c) Good Reason.................................................................................... 7
(d) Notice of Termination.......................................................................... 7
(e) Date of Termination............................................................................ 7
5. Obligations of the Corporation Upon Termination......................................................... 8
(a) Termination Other Than for Cause............................................................... 8
(b) Cause; Other Than for Good Reason.............................................................. 10
(c) Death or Disability............................................................................ 10
(d) Resolution of Disputes/Right of Election by Executive to Arbitrate or Sue...................... 10
6. Non-exclusivity of Rights............................................................................... 11
7. Full Settlement......................................................................................... 11
8. Confidential Information................................................................................ 11
9. Competition............................................................................................. 12
10. Successors.............................................................................................. 13
11. Amendment or Modification; Waiver....................................................................... 13
12. Miscellaneous........................................................................................... 13
-i-
EMPLOYMENT AGREEMENT (the "Agreement") made effective as of
the 2nd day of February, 2004, by and between DANA CORPORATION, a Virginia
corporation whose principal place of business is located at 4500 Dorr Street,
Toledo, Ohio (the "Corporation"), and William J. Carroll (the "Executive");
WHEREAS, the Executive is an executive officer of the
Corporation and is currently serving as Acting President and Acting Chief
Operating Officer in addition to his duties as President - Automotive Systems
Group; and
WHEREAS, the Corporation wishes to assure itself of the
continuing services of the Executive as an executive officer of the Corporation
during the period of employment hereunder by providing him with the definitive
employment terms set forth in this Agreement; and
WHEREAS, the Executive is willing to commit himself to remain
in the employ of the Corporation during such period on the terms and conditions
set forth herein, and to forego opportunities elsewhere during such period; and
WHEREAS, the parties have entered into a Change of Control
Agreement, dated December 8, 1997 (such Change of Control Agreement, as the same
may be amended and/or restated from time to time, or any successor agreement
thereto, shall be referred to herein as the "Change of Control Agreement"); and
WHEREAS, the parties intend for this Agreement to operate
until terminated in accordance with the terms hereof or, if earlier, until the
occurrence of a Change of Control (as defined in the Change of Control
Agreement) as more fully set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the mutual promises,
covenants and agreements set forth below, it is hereby agreed as follows:
1. Employment and Term.
(a) The Corporation agrees to continue the employment of the
Executive, and the Executive agrees to remain in the employ of the Corporation,
in accordance with the terms and provisions of this Agreement, for the period
set forth below (the "Employment Period").
(b) The Employment Period under this Agreement shall commence as
of February 2, 2004, and, subject to the provisions of Section 4 below relating
to termination of employment, shall continue until the close of business on
October 21, 2005. Notwithstanding the foregoing, this Agreement shall be
superceded and cease to have any effect if a Change of Control of the
Corporation (as defined in the Change of Control Agreement) occurs during the
Employment Period, in which case the Change of Control Agreement shall become
fully operative in accordance with its terms.
2. Position and Duties of the Executive.
(a) Position. During the Employment Period, the Executive shall be
an executive officer of the Corporation, initially serving as its Acting
President and Acting Chief Operating
-1-
Officer and President - Automotive Systems Group, with such duties and reporting
responsibilities as the Board of Directors of the Corporation (the "Board")
shall determine, subject to the provisions of the next succeeding sentence of
this Section 2(a). The Executive hereby agrees that the Board (or the executive
officer of the Corporation to whom the Executive reports) may, at any time,
without the Executive's consent, change the Executive's office(s), title(s),
reporting responsibility, and duties or responsibilities as in effect on the
date of this Agreement, so long as the Executive shall continue to serve as an
executive officer of the Corporation, as designated by the Board.
During the Employment Period the Executive shall, without
compensation other than that herein provided, also serve and continue to serve,
if and when elected and re-elected, as an officer or director, or both, of any
Subsidiary, division or Affiliate of the Corporation.
For all purposes of this Agreement, (i) a "Subsidiary" shall
mean a corporation or other entity, of which 50% or more of the voting
securities or other equity interests is owned directly, or indirectly through
one or more intermediaries, by the Corporation, and (ii) an "Affiliate" shall
mean a corporation or other entity which is not a Subsidiary and which directly,
or indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, the Corporation. For the purpose of this
definition, the terms "control," "controls" and "controlled" mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a corporation or other entity, whether through
the ownership of voting securities, by contract, or otherwise.
(b) Scope of Duties. Throughout the Employment Period the
Executive shall devote his full time and undivided attention during normal
business hours to the business and affairs of the Corporation except for
reasonable vacations and except for illness or incapacity, but nothing in this
Agreement shall preclude the Executive from devoting reasonable periods required
for the following activities, provided that such activities do not materially
interfere with the regular performance of his duties and responsibilities under
this Agreement or violate Sections 8 or 9 of this Agreement:
(i) serving as a director or member of a committee or any
organization involving no conflict of interest with the interests of
the Corporation;
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing his personal investments.
3. Compensation.
The Executive shall receive the following compensation for his
services:
(a) Salary. During the Employment Period, the Executive shall be
paid an annual base salary of no less than $620,000, with such increases as
shall be awarded from time to time in accordance with the Corporation's regular
administrative practices of other salary increases
-2-
applicable to executives of the Corporation or other upward adjustments as the
Board (or the Compensation Committee thereof) deems to be necessary or
desirable, subject to any and all required withholdings and deductions for
Social Security, income taxes and the like (the "Annual Base Salary"). During
the Employment Period, the Annual Base Salary shall be payable in regular
installments, no less frequently than monthly. Annual Base Salary shall not be
reduced after any increase thereof pursuant to this Section 3(a). Any increase
in Annual Base Salary shall not serve to limit or reduce any other obligation of
the Corporation under this Agreement.
(b) Additional Compensation. During the Employment Period, the
Executive shall be eligible to receive annual short-term incentive awards or
bonuses (such award or bonus is hereinafter referred to as "Short-Term Award" or
"Annual Bonus") from the Dana Corporation Additional Compensation Plan, and from
any successor or replacement plan (the Dana Corporation Additional Compensation
Plan and such successor or replacement plans being referred to herein
collectively as the "ACP"), in accordance with the terms thereof. Each Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless the
receipt of such Annual Bonus is deferred in accordance with the terms of the
ACP.
(c) Incentive, Stock and Savings Plans. During the Employment
Period, the Executive shall be and continue to be a full participant in the Dana
Corporation Amended and Restated Stock Incentive Plan, the ACP (providing for
Short-Term Awards) and in any and all other incentive, stock, savings or
retirement plans, practices or policies in which executives of the Corporation
participate that are in effect on the date hereof and that may hereafter be
adopted, including, without limitation, any stock option, stock purchase or
stock appreciation plans, or any successor plans that may be adopted by the
Corporation with at least the same reward opportunities, if any, that have
heretofore been provided to the Executive. Nothing in this Agreement shall
preclude improvement of reward opportunities in such plans or other plans in
accordance with the practice of the Corporation on or after the date of this
Agreement.
(d) Retirement and Welfare Benefit Plans. The Executive, his
dependents and Beneficiary (as defined below), including, without limitation,
any beneficiary of a joint and survivor or other optional method of payment
applicable to the payment of benefits under the Pension and Retirement Program
of the Corporation, as defined in Section 3(i)(ii) below, shall be entitled to
all payments and benefits and service credit for benefits during the Employment
Period to which other senior executives of the Corporation (other than the
Chief Executive Officer), their dependents and their beneficiaries are entitled
under the terms of employee retirement and welfare benefit plans and practices
of the Corporation, including, without limitation, the Pension and Retirement
Program of the Corporation, the Corporation's Savings and Investment Plan, its
Stock Purchase Plan, its Stock Award Plan, its Income Protection Plan for
Management and Certain Other Employees providing layoff and severance benefits,
its 1989 and 1999 Restricted Stock Plans, its Excess Benefits Plan, its
Supplemental Benefits Plan, its death benefit plans (consisting of its Group
Insurance Plan for Management Employees providing life insurance, accidental
death and dismemberment insurance, and travel accident insurance), its
disability benefit plans (consisting of its salary continuation, sickness and
accident and long-term disability benefits programs), its medical, dental and
health and welfare plans and other present or equivalent successor plans and
practices of the Corporation, its Subsidiaries and divisions, for active and
retired employees, for which senior executive officers (other than the
-3-
Chief Executive Officer), their dependents and beneficiaries, are eligible, and
to all payments or other benefits under any such plan or practice subsequent to
the Employment Period as a result of participation in such plan or practice
during the Employment Period. The term "Beneficiary" as used in this Agreement
shall, in the event of the death of the Executive, mean an individual or
individuals and/or an entity or entities, including, without limitation, the
Executive's estate, duly designated on a form filed with the Corporation by the
Executive to receive any amount that may be payable after his death or, if no
such individual, individuals, entity or entities has or have been so designated,
or is at the time in existence or able to receive any such amount, the
Executive's estate.
(e) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the polices, practices and procedures of the
Corporation and its Subsidiaries and Affiliates from time to time in effect,
commensurate with his position and on a basis at least comparable to that of
other senior executives of the Corporation other than the Chief Executive
Officer.
(f) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation, the
business and personal use of an automobile, and payment or reimbursement of club
initiation fees and dues, in accordance with the plans, practices, programs and
policies of the Corporation and its Subsidiaries and Affiliates from time to
time in effect, commensurate with his position and at least comparable to those
received by other senior executives of the Corporation other than the Chief
Executive Officer.
(g) Office and Support Staff. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to personal secretarial and other
assistance, commensurate with his position and at least comparable to those
received by other senior executives of the Corporation other than the Chief
Executive Officer.
(h) Vacation and Other Absences. During the Employment Period, the
Executive shall be entitled to paid vacation and such other paid absences
whether for holidays, illness, personal time or any similar purposes, in
accordance with the plans, policies, programs and practices of the Corporation
and its Subsidiaries and Affiliates in effect from time to time, commensurate
with his position and at least comparable to those received by other senior
executives of the Corporation other than the Chief Executive Officer.
(i) Certain Retirement and Severance Definitions.
(i) The term "Severance Compensation" shall mean the sum
of (1) one-twelfth (1/12) of the Annual Base Salary provided in Section
3(a) at the rate being paid at the time the Executive's termination of
employment occurred, and (2) one-twelfth (1/12) of the Executive's
target annual bonus in effect under the ACP for the fiscal year in
which the termination occurs, provided, however, that, solely for
purposes of determining the Executive's benefit under the Pension and
Retirement Program of the Corporation, with respect to 1994 and
subsequent years' Annual Bonuses, only that portion of the
-4-
Executive's Annual Bonus as does not exceed 125% of his Annual Base
Salary shall be considered.
(ii) The term "Pension and Retirement Program of the
Corporation" shall mean the Dana Corporation Retirement Plan, the Dana
Corporation Excess Benefits Plan, the Dana Corporation Supplemental
Benefits Plan, and any other supplemental, early retirement and similar
plan or plans of the Corporation, its Subsidiaries and Affiliates,
providing for pension or retirement benefits that may be applicable to
the Executive and that are in effect on the date hereof or may
hereafter be adopted or substituted for any such plan, but exclusive of
the Dana Corporation Savings and Investment Plan and any similar plan
or plans.
(iii) The term "Service" shall mean employment as an
employee by the Corporation, any Subsidiary or Affiliate thereof or any
corporation the capital stock or assets of which have been acquired by,
or which has been merged into or consolidated with the Corporation or
any Subsidiary or Affiliate thereof.
4. Termination of Employment.
(a) Death or Disability.
(i) The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
(ii) If the Corporation determines in good faith that the
Disability (as defined below) of the Executive has occurred during the
Employment Period, it may give to the Executive written notice in
accordance with Section 12(b) below of its intention to terminate the
Executive's employment. In such event, the Employment Period shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided, that within the
30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of the Executive from
the Executive's duties with the Corporation on a full-time basis for
180 consecutive business days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by a
physician selected by the Corporation or its insurers and acceptable to
the Executive or the Executive's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
(b) Cause. The Corporation may terminate the Executive's
employment during the Employment Period for Cause or without Cause. For purposes
of this Agreement, the termination of the Executive's employment shall be deemed
to have been for "Cause" only
(i) if termination of his employment shall have been the
result of his conviction of, or plea of guilty or nolo contendere to,
the charge of having committed a felony (whether or not such conviction
is later reversed for any reason), or
(ii) if there has been a breach by the Executive during
the Employment Period of the provisions of Section 2(b), relating to
the time to be devoted to the affairs of the
-5-
Corporation, or of Section 9, relating to confidential information, and
such breach results in demonstrably material injury to the Corporation,
and, with respect to any alleged breach of Section 2(b) hereof, the
Executive shall have either failed to remedy such alleged breach within
thirty days from his receipt of written notice from the Secretary of
the Corporation pursuant to resolution duly adopted by the Board after
notice to the Executive and an opportunity to be heard demanding that
he remedy such alleged breach, or shall have failed to take all
reasonable steps to that end during such thirty-day period and
thereafter;
provided, that there shall have been delivered to the Executive a certified copy
of a resolution of the Board adopted by the affirmative vote of not less than
three-fourths of the entire membership of the Board called and held for that
purpose and at which the Executive was given an opportunity to be heard, finding
that the Executive was guilty of conduct set forth in subparagraph (i) or (ii)
above, specifying the particulars thereof in detail.
Anything in this Section 4(b) or elsewhere in this Agreement
to the contrary notwithstanding, the employment of the Executive shall in no
event be considered to have been terminated by the Corporation for Cause if
termination of his employment took place
(1) as the result of bad judgment or negligence on the
part of the Executive, or
(2) because of an act or omission believed by the
Executive in good faith to have been in or not
opposed to the interests of the Corporation, or
(3) for any act or omission in respect of which a
determination could properly be made that the
Executive met the applicable standard of conduct
prescribed for indemnification or reimbursement or
payment of expenses under (A) the Bylaws of the
Corporation, or (B) the laws of the State of
Virginia, or (C) the directors' and officers'
liability insurance of the Corporation, in each case
either as in effect at the time of this Agreement or
in effect at the time of such act or omission, or
(4) as the result of an act or omission which occurred
more than twelve calendar months prior to the
Executive's having been given notice of the
termination of his employment for such act or
omission unless the commission of such act or such
omission could not at the time of such commission or
omission have been known to a member of the Board
(other than the Executive, if he is then a member of
the Board), in which case more than twelve calendar
months from the date that the commission of such act
or such omission was or could reasonably have been so
known, or
(5) as the result of a continuing course of action which
commenced and was or could reasonably have been known
to a member of the Board (other than the Executive,
if he is then a member of the Board) more than twelve
calendar months prior to notice having been given to
the Executive of the termination of his employment.
-6-
(c) Good Reason. During the Employment Period, the Executive may
terminate his employment for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean the breach by the Corporation of the provisions of Section
2(a) or 3(a)-(h), which is not remedied within 30 days after receipt by the
Corporation of written Notice of Termination from the Executive; provided, that
(i) the Executive shall have provided a written Notice of Termination to the
Corporation, attention of the Secretary, given within 90 days following the
occurrence of the event giving rise to the assertion of Good Reason and (ii)
such written Notice of Termination provides for a Date of Termination not less
than 30 days nor more than 60 days after receipt by the Corporation of such
Notice of Termination, unless the Corporation shall agree to an earlier Date of
Termination.
An election by the Executive to terminate his employment given
under this Section 4(c) shall not be deemed a voluntary termination of
employment by the Executive for the purpose of this Agreement or any plan or
practice of the Corporation.
(d) Notice of Termination. Any termination by the Corporation for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b)
below. For purposes of this Agreement, a "Notice of Termination" means a written
notice which
(i) indicates the specific termination provision in this
Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated and
(iii) specifies the Date of Termination (as defined in
Section 4(e) below).
(e) Date of Termination. "Date of Termination" means
(i) if the Executive's employment is terminated by the
Corporation for Cause, the later of the date of receipt of the Notice
of Termination or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the
Executive for Good Reason, the date specified in the Notice of
Termination,
(iii) if the Executive's employment is terminated by the
Corporation other than for Cause or Disability, the Date of Termination
shall be the date on which the Corporation notifies the Executive of
such termination and
(iv) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case
may be.
-7-
5. Obligations of the Corporation Upon Termination.
(a) Termination Other Than for Cause, Death or Disability. If,
during the Employment Period, the Corporation shall terminate the Executive's
employment other than for Cause, death or Disability or the Executive shall
terminate his employment for Good Reason (termination in any such case referred
to as "Termination"), subject to and conditioned upon the execution by the
Executive of, and his not subsequently revoking, a release substantially in the
form attached hereto as Exhibit A:
(i) the Corporation shall pay the Executive in a lump sum
in cash within 30 days after the Date of Termination the sum of
(1) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid,
(2) to the extent that Annual Bonus has not been paid to
the Executive in respect of the fiscal year in which
the Date of Termination occurs, the product of (x)
the Executive's target annual bonus in effect under
the ACP as of the Date of Termination and (y) a
fraction, the numerator of which is the number of
days in the current fiscal year through the Date of
Termination, and the denominator of which is 365, and
(3) any compensation previously deferred by the Executive
(together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2), and (3) shall
be hereinafter referred to as the "Accrued
Obligations"); and
(ii) the Corporation shall pay to the Executive an amount
equal to the aggregate Severance Compensation that would be payable for
the period from the Date of Termination through the end of the
Termination Period (as defined below) payable, in the discretion of the
Compensation Committee of the Board, either in a lump sum within 30
days after the Date of Termination or in installments commencing at the
end of the month next following the Date of Termination and at the end
of each month thereafter for the period from the Date of Termination
until the earlier to occur of (x) the second anniversary of the Date of
Termination and (y) the end of the month in which the death of the
Executive shall have occurred (such period to be called the
"Termination Period"); provided, however, that such amount shall be
reduced (but not below zero) by any other amounts payable to the
Executive in respect of salary or bonus continuation to be received by
the Executive under any severance plan, policy or arrangement of the
Corporation; and
(iii) During the Termination Period, or such longer period
as any plan, program, practice or policy may provide, the Corporation
shall continue benefits to the Executive and/or the Executive's
dependents at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies
described in Section 3(d) above if the Executive's employment had not
been terminated
-8-
in accordance with the most favorable plans, practices, programs or
policies of the Corporation and its Subsidiaries and Affiliates as in
effect and applicable generally to other senior executives (other than
the Chief Executive Officer) of the Corporation and its Subsidiaries
and Affiliates and their families during the 90-day period immediately
preceding the Date of Termination or, if more favorable to the
Executive, as in effect at any time thereafter or, if more favorable to
the Executive, as in effect generally at any time thereafter with
respect to other senior executives (other than the Chief Executive
Officer) of the Corporation and its Subsidiaries and Affiliates and
their dependents, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or
other welfare benefits under another employer-provided plan, the
medical and other welfare benefits described herein shall be secondary
to those provided under such other plan during such applicable period
of eligibility. For purposes of determining eligibility of the
Executive for retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be considered to have
remained employed until the end of the Termination Period and to have
retired on the date of the end of the Termination Period. To the extent
that any benefits referred to in this Section 5(a)(iii) shall not be
payable or provided under any such plan by reason of the Executive's no
longer being an employee of the Corporation as the result of
Termination, the Corporation shall itself pay, or provide for payment
of, such benefits and the service credit for benefits provided for in
Section 5(a)(iv) below, to the Executive, his dependents and
Beneficiary; and
(iv) The period from the Date of Termination until the end
of the Termination Period shall be considered:
(1) Service with the Corporation for the purpose of
continued credits under the employee benefit plans
referred to in Section 3(d) above and all other
benefit plans of the Corporation applicable to the
Executive, his dependents or his Beneficiary as in
effect immediately prior to Termination but prior to
any reduction of benefits thereunder as the result of
amendment or termination during the Employment
Period; and
(2) Employment with the Corporation for purposes of
determining payments and other rights in respect of
awards made or accrued and award opportunities
granted prior to Termination under the executive
incentive plans referred to in Section 3(c) above and
all other incentive plans of the Corporation in which
the Executive was a participant prior to Termination;
and
(v) to the extent not theretofore paid or provided, the
Corporation shall timely pay or provide to the Executive and/or the
Executive's dependents and/or heirs any other amounts or benefits
required to be paid or provided to the Executive and such individuals
under any plan, program, policy or practice of the Corporation and its
Subsidiaries and Affiliates as in effect and applicable generally to
other senior executives (other than the Chief Executive Officer) of the
Corporation and its Subsidiaries and Affiliates and their dependents
and/or heirs during the 90-day period immediately preceding the Date of
Termination or, if more favorable to the Executive, as in effect
generally thereafter with
-9-
respect to other senior executives (other than the Chief Executive
Officer) of the Corporation and its Subsidiaries and Affiliates and
their dependents and/or heirs (such other amounts and benefits shall be
referred to below as the "Other Benefits").
(b) Cause; Other Than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, the
Corporation shall have no further obligations to the Executive under this
Agreement other than the obligation to pay through the Date of Termination the
Executive's Annual Base Salary, any compensation previously deferred by the
Executive (together with any accrued interest or earnings thereon), and accrued
vacation pay, in each case to the extent not theretofore paid, and any other
amounts or benefits to which the Executive and/or the Executive's family is
otherwise entitled under the terms of any employee benefit or incentive plan of
the Corporation. If the Executive terminates employment during the Employment
Period, excluding a termination for Good Reason, the Corporation shall have no
further obligations to the Executive, other than to pay through the Date of
Termination the Executive's Annual Base Salary, any compensation previously
deferred by the Executive (together with any accrued interest or earnings
thereon), and accrued vacation pay, in each case to the extent not theretofore
paid, any other benefits to which the Executive and/or the Executive's family is
otherwise entitled under the terms of any employee benefit or incentive plan of
the Corporation.
(c) Death or Disability.
(i) In the event of the death of the Executive during the
Employment Period, the legal representative of the Executive shall be
entitled to the compensation provided for in Sections 3(a) and 3(b)
above for the month in which death shall have taken place, at the rate
being paid at the time of death, and the Employment Period shall be
deemed to have ended as of the close of business on the last day of the
month in which death shall have occurred but without prejudice to any
payments due in respect of the Executive's death.
(ii) In the event of the Disability of the Executive
during the Employment Period, the Executive shall be entitled to the
compensation provided for in Sections 3(a) and 3(b) above, at the rate
being paid on the Disability Effective Date, for the period of such
Disability but not in excess of six months. The amount of any payments
due under this Section 5(c)(ii) shall be reduced by any payments to
which the Executive may be entitled for the same period because of
disability under any disability or pension plan of the Corporation or
of any Subsidiary or Affiliate thereof.
(d) Resolution of Disputes/Right of Election by Executive to
Arbitrate or Sue. In the event that the Executive's employment shall be
terminated by the Corporation during the Employment Period and such termination
is alleged to be for Cause, or the Executive's right to terminate his employment
under Section 4(c) above shall be questioned by the Corporation, or the
Corporation shall withhold payments or provision of benefits for any other
reason, the Executive shall have the right, in addition to all other rights and
remedies provided by law, at his election either to seek arbitration within the
Toledo, Ohio area under the rules of the American Arbitration Association by
serving a notice to arbitrate upon the Corporation or to institute a judicial
proceeding, in either case within ninety days after having received notice of
termination
-10-
of his employment or notice in any form that the termination of his employment
under Section 4(c) above is subject to question or that the Corporation is
withholding or proposes to withhold payments or provision of benefits.
6. Non-exclusivity of Rights.
Except as provided in Sections 5(a), 5(b) and 5(c) above,
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Corporation or any of its Subsidiaries and Affiliates and for which the
Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as the Executive may have under any contract or agreement entered into
after the date hereof with the Corporation or any of its Subsidiaries and
Affiliates. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or program of, or
any contract or agreement entered into after the date hereof with, the
Corporation or any of its Subsidiaries and Affiliates at or subsequent to the
Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by
this Agreement.
7. Full Settlement.
The Corporation's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Corporation may have against the Executive or others.
In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and, except as provided in Section
5(a)(iii) above, such amounts shall not be reduced whether or not the Executive
obtains other employment.
8. Confidential Information.
(a) The Executive agrees not to disclose, either while in the
Corporation's employ or at any time thereafter, to any person not employed by
the Corporation, or not engaged to render services to the Corporation, except
with the prior written consent of an officer authorized to act in the matter by
the Board, any confidential information obtained by him while in the employ of
the Corporation, including, without limitation, information relating to any of
the Corporation's inventions, processes, formulae, plans, devices, compilations
of information, methods of distribution, customers, client relationships,
marketing strategies or trade secrets; provided, however, that this provision
shall not preclude the Executive from use or disclosure of information known
generally to the public or of information not considered confidential by persons
engaged in the business conducted by the Corporation or from disclosure required
by law or Court order. The agreement herein made in this Section 8(a) shall be
in addition to, and not in limitation or derogation of, any obligations
otherwise imposed by law upon the Executive in respect of confidential
information and trade secrets of the Corporation, its Subsidiaries and
Affiliates.
-11-
(b) The Executive also agrees that upon leaving the Corporation's
employ he will not take with him, without the prior written consent of an
officer authorized to act in the matter by the Board, and he will surrender to
the Corporation any record, list, drawing, blueprint, specification or other
document or property of the Corporation, its Subsidiaries and Affiliates,
together with any copy and reproduction thereof, mechanical or otherwise, which
is of a confidential nature relating to the Corporation, its Subsidiaries and
Affiliates, or, without limitation, relating to its or their methods of
distribution, client relationships, marketing strategies or any description of
any formulae or secret processes, or which was obtained by him or entrusted to
him during the course of his employment with the Corporation.
9. Competition.
(a) The Executive agrees that he will not engage in Competition at
any time (i) during the Employment Period or (ii) during the twenty-four (24)
month period immediately following the termination of the Executive's employment
hereunder if the Executive is entitled to and receives Severance Compensation
pursuant to Section 5(a) above.
(b) The word "Competition" for the purposes of this Agreement
shall mean
(i) taking a management position with or control of a
business engaged in the design, development, manufacture, marketing or
distribution of products, which constituted 15% or more of the sales of
the Corporation and its Subsidiaries and Affiliates during the last
fiscal year of the Corporation preceding the termination of the
Executive's employment, in any geographical area in which the
Corporation, its Subsidiaries or Affiliates is at the time engaging in
the design, development, manufacture, marketing or distribution of such
products; provided, however, that in no event shall ownership of less
than 5% of the outstanding capital stock entitled to vote for the
election of directors of a corporation with a class of equity
securities held of record by more than 500 persons, standing alone, be
deemed Competition with the Corporation within the meaning of this
Section 9,
(ii) soliciting any person who is a customer of the
businesses conducted by the Corporation and its Subsidiaries and
Affiliates, or any business in which the Executive has been engaged on
behalf of the Corporation and its Subsidiaries or Affiliates at any
time during the term of this Agreement on behalf of a business
described in clause (i) of this Section 9(b),
(iii) inducing or attempting to persuade any employee of
the Corporation or any of its Subsidiaries or Affiliates to terminate
his employment relationship in order to enter into employment with a
business described in clause (i) of this Section 9(b), or
(iv) making or publishing any statement which is, or may
reasonably be considered to be, disparaging of the Corporation or any
of its Subsidiaries or Affiliates, or directors, officers, employees or
the operations or products of the Corporation or any of its
Subsidiaries or Affiliates, except to the extent the Executive, during
the Employment Period, makes the statement to employees or other
representatives of the Corporation or
-12-
any of its Subsidiaries or Affiliates in furtherance of the
Corporation's business and the performance of his services hereunder.
(c) If, at any time, the provisions of this Section 9 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope, the provisions of this Section 9
shall be divisible and shall become immediately amended to cover only such area,
duration or scope as shall be determined to be reasonable and enforceable by the
court or other body having jurisdiction over the matter; and the Executive
agrees that Section 9 as so amended shall be valid and binding as though any
invalid or unenforceable provision had not been included herein.
10. Successors. Except as otherwise provided herein,
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Executive, his heirs and legal representatives, and the
Corporation and its successors as provided in this Section 10.
(b) This Agreement shall be binding upon and inure to the benefit
of the Corporation and any successor of the Corporation, including, without
limitation, any corporation or corporations acquiring, directly or indirectly,
50% or more of the outstanding securities of the Corporation, or all or
substantially all of the assets of the Corporation, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
embraced within the term "the Corporation" for the purposes of this Agreement),
but shall not otherwise be assignable by the Corporation.
11. Amendment or Modification; Waiver.
No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board or any authorized committee of the Board and shall be agreed to in
writing, signed by the Executive and by an officer of the Corporation thereunto
duly authorized. Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a subsequent breach of such condition or provision
or a waiver of a similar or dissimilar provision or condition at the same time
or at any prior or subsequent time.
12. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
-13-
If to the Executive: Copy to:
Mr. William J. Carroll Mr. William J. Carroll
c/o Dana Corporation P.O. Box 1000
4500 Dorr Street Toledo, Ohio 43697
Toledo, Ohio 43615
If to the Corporation:
Dana Corporation
4500 Dorr Street
Toledo, Ohio 43615
Attention: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Corporation may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as it determines is required
to be withheld pursuant to any applicable law or regulation.
(e) When used herein in connection with plans, programs and
policies relating to the Executive, employees, compensation, benefits,
perquisites, executive benefits, services and similar words and phrases, the
word "Corporation" shall be deemed to include all wholly-owned Subsidiaries of
the Corporation.
(f) This instrument contains the entire agreement of the parties
concerning the subject matter, and all promises, representations,
understandings, arrangements and prior agreements concerning the subject matter
are merged herein and superseded hereby; provided, however, that this Agreement
shall not affect or supercede the Change of Control Agreement, which shall
operate in accordance with its terms concurrently with this Agreement and shall
supercede this Agreement upon the occurrence of a Change of Control as defined
in the Change of Control Agreement.
(g) No right, benefit or interest hereunder, shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void and of no effect.
(h) The Executive shall not have any right, title, or interest
whatsoever in or to any investments which the Corporation may make to aid it in
meeting its obligations under this Agreement.
-14-
(i) All payments to be made under this Agreement shall be paid
from the general funds of the Corporation and no special or separate fund shall
be established and no segregation of assets shall be made to assure payment of
amounts payable under this Agreement.
(j) The Corporation and the Executive recognize that each party
will have no adequate remedy at law for breach by the other of any of the
agreements contained in this Agreement and, in the event of any such breach, the
Corporation and the Executive hereby agree and consent that the other shall be
entitled to a decree of specific performance, mandamus or other appropriate
remedy to enforce performance of such agreements.
(k) Nothing contained in this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Corporation and the Executive or any other person.
(l) To the extent that any person acquires a right to receive
payments from the Corporation under this Agreement, except to the extent
provided by law such right shall be no greater than the right of an unsecured
general creditor of the Corporation.
(m) In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his legal representative or,
where appropriate, to his Beneficiary.
(n) If any event provided for in this Agreement is scheduled to
take place on a legal holiday, such event shall take place on the next
succeeding day that is not a legal holiday.
-15-
IN WITNESS WHEREOF, the Executive and, pursuant to due authorization
from its Board of Directors, the Corporation have caused this Agreement to be
executed as of the day and year first above written.
DANA CORPORATION
By /s/ G. H. Hiner
--------------------------------------
Acting Chairman of the Board of Directors
By /s/ R. B. Priory
--------------------------------------
Chairman of the Compensation Committee of
the Board of Directors
Attest___________________
/s/ William J. Carroll
---------------------------------------
William J. Carroll
-16-
EXHIBIT A TO EMPLOYMENT AGREEMENT
MADE AS OF FEBRUARY 2, 2004 BETWEEN
DANA CORPORATION AND WILLIAM J. CARROLL
FORM OF RELEASE AGREEMENT
This Release Agreement ("Release") is entered into as of this ______day
of ________, hereinafter "Execution Date", by and between [Executive Full Name]
(hereinafter "Executive"), and [Employer Full Name] and its successors and
assigns (hereinafter, the "Corporation"). The Executive and the Corporation are
sometimes collectively referred to as the "Parties".
1. The Executive's employment with the Corporation is terminated effective
[Month, Day, Year] (hereinafter "Termination Date"). The Corporation agrees
to provide the Executive the severance benefits provided for in his
Employment Agreement with the Corporation, dated as of [ ] (the
"Agreement"), after he executes this Release and the Release becomes
effective pursuant to its terms [FOR 40+ and does not revoke it as permitted
in Section 4 below, the expiration of such revocation period being the
"Effective Date")].
2. Executive represents that he has not filed, and will not file, any
complaints, lawsuits, administrative complaints or charges relating to his
employment with, or resignation from, the Corporation[; provided, however,
that nothing contained in this Section 2 shall prohibit Executive from
bringing a claim to challenge the validity of the ADEA Release in Section 4
herein]. In consideration of the benefits described in Section 1, for
himself and his heirs, administrators, representatives, executors,
successors and assigns (collectively, "Releasers"), Executive agrees to
release the Corporation, its subsidiaries, affiliates, and their respective
parents, direct or indirect subsidiaries, divisions, affiliates and related
companies or entities, regardless of its or their form of business
organization, any predecessors, successors, joint ventures, and parents of
any such entity, and any and all of their respective past or present
shareholders, partners, directors, officers, employees, consultants,
independent contractors, trustees, administrators, insurers, agents,
attorneys, representatives and fiduciaries, including without limitation all
persons acting by, through, under or in concert with any of them
(collectively, the "Released Parties"), from any and all claims, charges,
complaints, causes of action or demands relating to his employment or
termination of employment that Executive and his Releasers now have or have
ever had against the Released Parties, whether known or unknown. This
Release specifically excludes claims, charges, complaints, causes of action
or demand that (a) post-date the Termination Date, (b) relate to
unemployment compensation claims, (c) involve rights to benefits in which
Executive is vested as of the Termination Date under any employee benefit
plans and arrangements of the Corporation, (d) relate to claims for
indemnification by Employee, or (e) involve obligations owed to Executive by
the Corporation under the Agreement.
3. The Corporation, on its own behalf and on behalf of the Released
Parties, hereby releases Executive from all claims, causes of actions,
demands or liabilities which arose against the Executive on or before the
time it signs this Agreement, whether known or unknown. This Paragraph,
however, does not apply to or adversely affect any claims against Executive
which allege or involve obligations owed by him to the Corporation under the
Agreement.
-17-
The Corporation will indemnify Executive for reasonable attorneys' fees,
costs and damages which may arise in connection with any proceeding by the
Corporation or any Released Party which is inconsistent with this Release by
the Corporation and the Released Parties.
4. [FOR EMPLOYEES OVER 40 ONLY -- In further recognition of the above,
Executive hereby voluntarily and knowingly waives all rights or claims that
he may have against the Released Parties arising under the Age
Discrimination in Employment Act of 1967, as amended ("ADEA"), other than
any such rights or claims that may arise after the date of execution of this
Release. Executive specifically agrees and acknowledges that: (A) the
release in this Section 4 was granted in exchange for the receipt of
consideration that exceeds the amount to which he would otherwise be
entitled to receive upon termination of his employment; (B) he has hereby
been advised in writing by the Corporation to consult with an attorney prior
to executing this Release; (C) the Corporation has given him a period of up
to twenty-one (21) days within which to consider this Release, which period
shall be waived by the Executive's voluntary execution prior to the
expiration of the twenty-one day period, and he has carefully read and
voluntarily signed this Release with the intent of releasing the Released
Parties to the extent set forth herein; and (D) following his execution of
this Release he has seven (7) days in which to revoke his release as set
forth in this Section 4 only and that, if he chooses not to so revoke, the
Release in this Section 4 shall then become effective and enforceable and
the payment listed above shall then be made to him in accordance with the
terms of this Release. To cancel this Release, Executive understands that he
must give a written revocation to the General Counsel of the Corporation at
[ ](1), either by hand delivery or certified mail within the seven-day
period. If he rescinds the Release, it will not become effective or
enforceable and he will not be entitled to any benefits from the
Corporation.]
5. If any provision of this Release is held invalid, the invalidity of
such provision shall not affect any other provisions of this Release. This
Release is governed by, and construed and interpreted in accordance with the
laws of the State of [ ], without regard to principles of conflicts of law.
Executive consents to venue and personal jurisdiction in the State of [ ]
for disputes arising under this Release. This Release represents the entire
understanding with the Parties with respect to subject matter herein, and no
other inducements or representations have been made or relied upon by the
Parties. This Release shall be binding upon and inure to the benefit of
Executive, his heirs and legal representatives, and the Corporation and its
successors as provided in this Section 5. Any modification of this Release
must be made in writing and be signed by Executive and the Corporation.
ACCEPTED AND AGREED TO:
_________________________________ ____________________________________
[Employer Full Name] [Executive Full Name]
Dated:________________________________ Dated:__________________________
- ----------
(1) Insert address.
-18-