Exhibit 10.9
_______________, 2001
Dear _________:
Safety Components International, Inc. (the "Company") hereby agrees that,
except as set forth in the following paragraph, if there occurs a Change of
Control (as defined below) of the Company, and within twelve (12) months
thereafter, there occurs either (i) a termination by the Company of your
employment with the Company (other than a termination for Cause (as defined
below), death or Disability (as defined below)) or (ii) a termination by you by
reason of a Constructive Termination (as defined below), the Company shall pay
to you, in lieu of any other payments or benefits to which you may otherwise be
entitled, a severance payment equal to _____ months, calculated at the salary in
effect at the effective date of the termination (the "Effective Date") and shall
provide ____ months of health insurance continuation under "COBRA" at the same
cost to you of such coverage prior to the Effective Date. Such severance payment
shall be payable in ____ equal monthly installments commencing on the first day
of the month following the Effective Date.
Nothwithstanding the foregoing, the Company will not pay to you the
above-referenced severance payment in the event that your employment with the
Company is terminated by the Company within twelve (12) months (the "Grace
Period") after a Change of Control, if the acquirer (the "Acquiring Person")
agrees to employ you in a substantially equivalent position, at the same or a
higher salary and with substantially the same duties as you held with the
Company prior to such transaction, in which event, if your employment with the
Acquiring Person is terminated within the Grace Period (a) by the Acquiring
Person other than for cause, disability (as such terms may be defined by the
Board of Directors of the Acquiring Person) or death or (b) by you by reason of
a Constructive Termination, the Acquiring Person will make the severance payment
to you required by the first paragraph hereof. Such agreement by the Acquiring
Person to employ you as aforesaid, without any further action, shall relieve the
Company of any and all obligations under this Agreement.
Notwithstanding anything else in this Agreement, the cash component of any
severance payment under this Agreement shall no longer be payable to any extent
in the event that you receive any amount of Severance Period Earnings. For
purposes of this Agreement, "Severance Period Earnings" shall mean any amount(s)
received as income from a subsequent employer or business during the period such
severance amount otherwise would be payable. In addition, the health insurance
continuation component of any severance payment under this Agreement also
(except as required by applicable federal or state "COBRA" continuation laws)
shall no longer apply in the event that you become covered, or become eligible
to be covered (even if your contribution or application is required), by a group
health insurance plan of a subsequent employer or business.
For purposes of this Agreement:
1. A "Change of Control" will be deemed to have occurred upon:
(i) the acquisition by any one person or a group of associated
persons (the "Person") of beneficial ownership (within the meaning of
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
the shares of Common Stock then outstanding (the "Outstanding Common
Stock") or the voting securities of the Company then outstanding
entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"), if such acquisition of beneficial
ownership would
result in such Person beneficially owning either individually or in
the aggregate 50.1% or more of the Outstanding Common Stock or 50.1%
or more of the combined voting power of the Outstanding Voting
Securities; provided, however, that immediately prior to such
acquisition such Person(s) was not a direct or indirect beneficial
owner of 50.1% or more of the Outstanding Common Stock or 50.1% or
more of the combined voting power of Outstanding Voting Securities, as
the case may be; and provided further, however, that if such
acquisition is by a person who was a stockholder of the Company as of
October 31, 2000, then a Change of Control does not occur unless both
this Subsection (i) and Subsection (iii)'s change in Board composition
provisions are met; or
(ii) approval by the stockholders of the Company of a
reorganization, merger, consolidation, substantial liquidation or
dissolution of the Company, sale or disposition of all or
substantially all of the assets of the Company, or similar corporate
transaction (in each case referred to herein as a "Corporate
Transaction"); provided, however, in any such case, payment of any
benefits, or amounts (cash, stock or otherwise) shall be conditioned
upon the actual consummation of such Corporate Transaction; or
(iii) a change in the composition of the Board such that the
individuals who, immediately prior to the date hereof, constitute the
Board (such Board hereinafter referred to as the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual who becomes a member of the
Board on or subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was as a result
of the retirement, resignation or removal of a Board member in the
ordinary course of business and was approved by a vote of at least a
majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided,
further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule l4a-11 of Regulation 14A under the
Securities Exchange Act of 1934 (as amended from time to time),
including any successor to such Rule) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person(s)
other than the Board shall not be so considered as a member of the
Incumbent Board.
2. A "Constructive Termination" shall be deemed to have occurred upon
your voluntary termination of employment following the occurrence of any of
the following: (a) a change in your duties or responsibilities, or a change
in your reporting relationships, either of which results in or reflects a
material diminution of the scope or importance of your responsibilities;
(b) a reduction in your then current base salary or annual target bonus;
(c) a reduction in the level of benefits available or awarded to you under
employee and officer benefit plans and programs including, but not limited
to, annual and long-term incentive and stock-based plans and programs
(other than as part of reductions in such benefit plans or programs
affecting similarly situated employees of the Company); (d) any failure of
any Acquiring Person following a Change of Control to agree to be bound by
this Agreement, or (e) a relocation of your primary employment location
which is more than 50 miles from your current primary employment location;
provided, however, that for Constructive Termination to have been deemed to
have occurred, you must give the Company written notice, at least 30 days
prior to the date you intend to terminate your employment, providing a
description of the events constituting Constructive Termination hereunder
and, in the event the Company corrects or cures such events prior to the
conclusion of such 30 day period, then Constructive Termination shall not
exist hereunder.
3. The term "Disability" shall mean your inability or failure to
perform those duties for the Company or any subsidiary traditionally
assigned to and performed by you because of your then
existing physical or mental condition, impairment or incapacity. The fact
of disability shall be determined by the Board of Directors in its
reasonable discretion, and shall be determined using the same definition of
disability as would qualify you for disability benefits under the Company's
long-term disability program generally applicable to you. The Board may
consider such evidence as it deems desirable under the circumstances, and
the Board's determination shall be final and binding on all parties.
4. The term "Cause", as used herein, shall mean any act, action or
series of acts or actions or any omission, omissions, or series of
omissions which result in, or which have the effect of resulting in, any of
the following: (i) your commission of fraud, embezzlement or theft in
connection with your duties for the Company or any subsidiary; (ii) your
commission of a misdemeanor involving moral turpitude or your commission of
a felony; (iii) the wrongful material damage to Company or subsidiary
property by you; (iv) the wrongful disclosure of any secret process or
confidential information of the Company or any subsidiary; (v) the
violation of any non-disclosure, non-solicitation or non-competition
covenants to which you are subject; (vi) your intentional or grossly
negligent breach of any stated material employment policy of the Company or
any subsidiary; or (vii) your refusal to follow reasonable directions or
instructions of a more senior officer or the Board as to which the Company
has notified you in writing and such refusal shall have continued for a
period of three (3) business days after actual receipt of such notice.
The above payments and benefits are in consideration of and conditional
upon your execution of a release of claims against the Company as of the
Effective Date, which release shall be in the form attached as Exhibit A.
This Agreement shall be effective immediately upon your acceptance hereof
by your signature below and shall remain in effect for as long as you are
employed by the Company, it being understood that nothing contained herein is
intended to create a contract or guaranty of continued employment by the
Company.
This Agreement may be amended only by a subsequent writing signed by each
of the parties hereto.
The validity, interpretation, construction, performance and enforcement of
this Agreement shall be governed by the internal laws of the State of Delaware
without regard to its conflicts of laws rules. The non-prevailing party in any
dispute arising out of or in connection with this Agreement shall bear the
reasonable legal fees of the other party hereto.
This Agreement contains the entire agreement between you and the Company
hereto with respect to the matters contemplated herein and supersedes all prior
agreements or understandings among the parties related to such matters.
Please acknowledge your agreement to the foregoing by signing in the space
provided below and returning to the undersigned an executed copy of this letter
at your earliest convenience.
Sincerely, Accepted and agreed:
Xxxx X. Xxxxx
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President
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and Chief Executive Officer Signature
Exhibit A
RELEASE AGREEMENT
This RELEASE AGREEMENT ("Agreement") is made and entered into by and
between _________________ ("Employee") and Safety Components International, Inc.
("SCI").
WHEREAS, Employee and SCI have entered into a letter agreement dated
___________ under which Employee is entitled to receive certain severance
benefits (the "Letter Agreement"); and
WHEREAS, as a condition precedent to Employee's receipt of such severance
benefits, the Letter Agreement requires Employee to execute a release of claims
against SCI as of the date of Employee's termination from employment;
NOW, THEREFORE, for and in consideration of the mutual promises set forth
below, it is hereby agreed by and between Employee and SCI as follows:
1. In full consideration of Employee's execution of this Agreement and his
compliance with its terms and conditions, SCI agrees to provide the severance
benefits specified in the Letter Agreement subject to the terms and conditions
contained therein.
2. Employee, intending to be legally bound and for and in consideration of
the benefits described in this Agreement, does for himself, his heirs,
executors, administrators, successors and assigns hereby remise, release and
forever discharge SCI, its shareholders, successors, predecessors, subsidiaries,
affiliates, assigns, directors, officers, agents, employees and former
employees, and all persons, corporations or other entities who might be claimed
to be jointly and severally liable with them, from any and all actions, claims,
demands, charges, suits and damages whatsoever arising from or relating in any
way to his employment with SCI, whether known or unknown or whether asserted or
unasserted, from the beginning of time to the date of execution of this
Agreement, including but not limited to claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act (29 U.S.C. ss. 626
et seq.), the Employee Retirement Income Security Act of 1974, the Americans
With Disabilities Act, claims for breach of contract, unpaid wages, wrongful or
constructive discharge, intentional or negligent infliction of emotional
distress and any other statutory or common law theories, including any claim for
attorneys' fees and costs, which he or anyone claiming by, through or under him
in any way might have or could claim against SCI.
3. Employee agrees that he will not institute any legal proceedings either
individually or as a class representative or member against SCI as to any
matter. Employee knowingly and intentionally waives any rights to any additional
recovery that might be sought on his behalf against SCI as to any matter based
upon, arising from or relating to his employment with SCI, by any other person,
entity, local, state or federal government or agency thereof, including
specifically and without limitation, the state and federal Departments of Labor.
4. Employee shall make himself reasonably available for assistance with and
shall cooperate with SCI in connection with litigation or other on-going matters
in which his assistance may be needed during the period in which Employee is
receiving severance benefits pursuant to the Letter Agreement.
5. Employee agrees that he shall remain bound by and subject to all
agreements or other obligations of non-disclosure, non-solicitation and/or
non-competition to which he was a party or otherwise bound in connection with
his employment with SCI.
6. Employee agrees that he will not, at any time or in any manner, either
directly or indirectly, disclose, divulge, communicate or otherwise reveal or
allow to be revealed the facts, terms, substance or content of this Agreement or
the facts, terms, substance or content of any communications, written or oral,
concerning the negotiation, execution or implementation of this Agreement, to
anyone other than his attorney, his accountant or his immediate family members,
except as required by law.
7. It is expressly understood that this Agreement is not to be construed as
an admission of any liability or violation of any federal, state or local
statute or regulation, or of any duty owed by SCI which liability or violation
of statute, regulation or duty is expressly denied by SCI. The consideration set
forth in paragraph 1 of this Agreement is a benefit to which Employee is not
automatically entitled but which has been offered in consideration of the above
release and to resolve any and all potential disputes.
8. Employee acknowledges that he has had up to 21 days to consider the
terms of this Agreement. SCI encourages Employee to review this Agreement with
his attorney, if he so desires.
9. This Agreement shall become effective seven (7) days after its
signature. Within seven (7) days of his signature, Employee may revoke his
Agreement by providing written notice to the Vice President of Human Resources,
Safety Components International, Inc., 00 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx
Xxxxxxxx 00000.
10. This Agreement shall be governed by and construed in accordance with
the laws of the State of South Carolina.
11. Except as provided herein, each provision of this Agreement is intended
to be severable. If any term or provision is held to be invalid, void or
unenforceable by a court of competent jurisdiction for any reason whatsoever,
such ruling shall not affect the remainder of this Agreement.
12. The parties, intending to be legally bound, apply their signatures
voluntarily and with full understanding of the contents of this Release
Agreement and after having had ample time to review and study this Agreement.
Signed and executed this ____ day of _____________, 200__.
(SEAL)
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Employee
Safety Components International, Inc.
By:
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Title:
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