Exhibit 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 6, 2005 (the “Effective Date”), is entered into among Altra Holdings, Inc., a Delaware corporation (“Holdings”), Altra Industrial Motion, Inc., a Delaware corporation and wholly-owned subsidiary of Holdings (the “Company”), and Michael L. Hurt (“Executive”). Certain capitalized terms used in this Agreement are defined in Section 12 hereof.
Holdings, the Company and Executive desire to enter into this agreement relating to Executive’s employment by the Company.
The parties hereto agree as follows:
Employment. The Company shall employ Executive, and Executive hereby agrees to be employed by the Company, upon the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and ending as provided in Section 3 hereof (the “Employment Period”).
1. 2.
Position and Duties.
Position. During the Employment Period, Executive shall serve as the Chief Executive Officer of the Company and in such capacity shall have the duties, responsibilities and authority that are normally associated with such office, subject to the direction and supervision of the Board.
(a)
Duties. Executive shall report to the Board, and Executive shall devote substantially all of his business time and attention (except for permitted vacation periods and periods of illness or incapacity and other activities approved by the Board from time to time) to the business and affairs
(b)
of the Company and its Subsidiaries.
Termination. The Employment Period shall terminate on the third anniversary of the Effective Date. The date on which the Employment Period terminates after any notice of non-renewal is referred to herein as the “Expiration Date.” Notwithstanding the foregoing, the Company and Executive agree that Executive is an “at-will” employee, subject only to the contractual rights upon termination set forth herein, and that the Employment Period (a) shall terminate automatically at any time upon Executive’s death, (b) shall terminate automatically at any time upon the Board’s determination of Executive’s Disability, (c) may be terminated by the Company at any time for any reason or no reason (whether for Cause or without Cause) by giving Executive written notice of the termination, and (d) may be terminated by Executive for any reason or no reason (including for Good Reason) by giving the Company written notice at least 60 days in advance of his termination date. Notwithstanding anything herein to the contrary, in no event shall delivery of a notice of non-renewal by the Company be deemed a termination without Cause. The date that the Employment Period is terminated for any reason is referred to herein as the “Termination Date.”
3.
4.
Base Salary and Benefits.
Base Salary. During the Employment Period, Executive’s base salary shall be $350,000 per year (the “Base Salary”). The Base Salary shall be reviewed annually. The Base Salary shall not be reduced prior to the Expiration Date, and after any increase of such Base Salary approved by the Board, the term “Base Salary” in this Agreement shall refer to the Base Salary as so increased. The Base Salary shall be payable in regular installments in accordance with the Company’s general payroll practices.
(a)
Performance Bonus. In addition to the Base Salary, Executive shall be eligible for an annual incentive bonus payment of up to 60% of his Base Salary (a “Performance Bonus”), in accordance with the Company’s bonus performance plan approved by the Board in its sole discretion. Executive shall only be eligible to receive a Performance Bonus at the end of such fiscal year if Executive remains employed by the Company through the last day of such fiscal year.
(b)
Expenses. The Company will reimburse Executive for all reasonable travel and other business expenses incurred by Executive during the Employment Period in connection with the performance of his duties and obligations under this Agreement, subject to Executive’s compliance with such limitations and reporting requirements with respect to expenses as may be established by the Company from time to time.
(c)
Other Benefits. During the Employment Period, Executive will be entitled to participate in all compensation or employee benefit plans or programs and receive all benefits and perquisites for which salaried employees of the Company generally are eligible under any plan or program now or established later by the Company on the same basis as other senior executives of the Company. Nothing in this Agreement will preclude the Company from amending or terminating any of the plans or programs applicable to salaried employees or senior executives as long as such amendment or termination is applicable to all salaried employees or all senior executives, as the case may be. Executive shall be entitled to six weeks of paid vacation each year, which may be taken in accordance with the Company’s
(d)
vacation policy. Directorships. Each of the Company and Holdings shall take all actions necessary to elect the Executive to the Board and the Board of Directors of Holdings and to maintain the Executive’s position as a director during the Employment Period.
(e)
Indemnification. To the fullest extent permitted by law and the certificate of incorporation of the Company, the Executive (and his heirs, executors and administrators) shall be indemnified by the Company and its successors and assigns. The obligations of the Company pursuant to this Section shall survive the termination of the Employment Period.
(f)
5.
Severance.
Termination without Cause or for Good Reason. If, prior to the Expiration Date, the Employment Period is terminated by the Company without Cause or by the Executive for Good Reason, (i) Executive shall be entitled to receive for the Severance Period (A) his annual Base Salary as in effect immediately prior to the Termination Date paid in the same
(a) 2
manner and in the same installments as previously paid and (B) to the extent permitted by such plans as in effect on the Termination Date, at the Company’s expense the con