SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
report: April 26, 2010
(Date of earliest event reported: April 22,
2010)
RBC
BEARINGS INCORPORATED
(Exact
name of registrant as specified in its charter)
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Delaware
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333-124824
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95-4372080
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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One
Tribology Center
Oxford,
CT 06478
(Address
of principal executive offices) (Zip Code)
(203)
267-7001
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Page
1
On April
22, 2010 the Company entered into a new Employment Agreement with Dr. Michael J.
Hartnett, effective April 4, 2010, pursuant to which Dr. Hartnett will
continue to be employed as President, Chief Executive Officer and Chairman of
the Board of Directors of the Company.
The new
Employment Agreement replaces the current Employment Agreement, dated as of July
1, 2005, between the Company and Dr. Michael J. Hartnett, filed as Exhibit 10.19
to Amendment No. 4 to the Company’s Registration Statement dated August 8, 2005
and described therein. A copy of the new Employment Agreement is filed as
Exhibit 10.1 and incorporated herein by reference.
Dr. Hartnett's
new Employment Agreement has a two year initial term with automatic annual
renewals thereafter, is substantially similar to his current Employment
Agreement and provides for:
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·
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The
continuation of his current base salary and annual performance bonus
formula based on the Company’s performance in relation to an approved
operating plan both as previously disclosed by the
Registrant.
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·
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A
retention payment and restricted stock grant upon signing as described in
the Employment Agreement.
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·
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An
amended change in control provision consistent with those provisions
previously approved for other Executive Officers of the Company generally
providing for a payment equal to 2.5 times his annual base salary plus 2.5
times his target bonus in the event that his employment is terminated
without cause following a change in control of the
Company.
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The
foregoing description of Dr. Hartnett’s employment terms does not
purport to be complete and is subject to, and qualified in its entirety by,
prior related disclosures by Registrant and reference to the provisions of the
Employment Agreement attached as Exhibit 10.1 to this Current Report on
Form 8-K.
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Item 5.02
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Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers; Compensatory Arrangements of Certain
Officers.
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Item 9.01
Financial Statements and Exhibits
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(d)
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Exhibits
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Exhibit
No.
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Description
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10.1
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Employment
Agreement, effective April 4, 2010, between the Registrant and
Dr. Hartnett.
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SIGNATURES
According
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized.
Date:
April 26, 2010
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RBC
BEARINGS INCORPORATED
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By:
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/s/
Thomas J. Williams
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Name:
Thomas J. Williams
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Title:
General Counsel & Secretary
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Page
2
EMPLOYMENT
AGREEMENT
WITH
MICHAEL
J. HARTNETT
This
Employment Agreement (the “Employment Agreement”) is dated effective as of this
4th day of April, 2010 (the “Commencement Date”) and made between RBC Bearings
Incorporated, a Delaware corporation (“Employer” or the “Company”) and Michael
J. Hartnett Ph.D. (“Employee”). Prior to and through the time of their entry
into this Agreement, Employee has served as Employer’s President, Chief
Executive Officer and Chairman of its Board of Directors pursuant to an
Employment Agreement dated July 1, 2005 (“Prior Employment Agreement”). Both
parties wish to continue this employment relationship under the terms reflected
in this Agreement.
Therefore,
Employer hereby employs Employee and Employee hereby accepts employment, on the
terms and conditions hereinafter set forth.
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1.
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DEFINITIONS.
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As used
in this Agreement, and unless the context requires a different meaning, the
following terms shall be defined as follows:
“Change
in Control” is as defined in the RBC 2005 Long-Term Equity Incentive Plan as
amended.
“Competing
Business” means any business (including, without limitation, research and
development) that is carried on by Employer in any material respect, and with
which Employee is actively involved, during the Term.
“EBITDA”
shall mean the income of the Employer increased by interest, taxes, depreciation
and amortization, calculated in a manner consistent with the calculation of the
Plan.
“Good
Reason” shall mean for the 24 month period following a Change in Control any of
the following which occur subsequent to the Commencement Date without your
express written consent:
(i)
a substantial reduction in the Employee’s title, position, duties,
responsibilities and status with the Company inconsistent with the Employee’s
title, duties, responsibilities and status immediately prior to a change in the
Employee’s titles or offices, or any removal of the Employee from or any failure
to reelect the Employee to any of such positions, except in connection with the
termination of his employment for disability, retirement or Cause or by the
Employee other than for Good Reason;
(ii)
a relocation of Employee’s principal work location without his consent to a
location more than 25 miles from the Company’s headquarters at Oxford,
Connecticut;
(iii)
any material breach by the Company of any provision of this Agreement; or
(iv) any failure by the Company to obtain the assumption of this Agreement
by any successor or assign of the Company.
“Plan”
shall mean the operating plan established by the Employee, in his status as CEO
of Employer and as approved by the Board within thirty (30) days following the
beginning of each fiscal year, as applicable to Employer and as applicable to
the determination of bonuses payable to others of Employer’s employees to the
extent such bonuses are calculated by reference to operating
results.
“Person”
means any natural person, partnership, corporation, trust, company or other
entity.
“Territory”
means the geographical area in which the Employer engages in any business (other
than an insignificant amount of business), with which Employee is actively
involved, during the Term.
“Equity
Vesting Triggering Event” means the occurrence of any of the
following:
(i) the expiration of the Term of this
Agreement pursuant to Section 2;
Page 1 of
10
(ii) the
termination of this Agreement pursuant to Section 8(a) upon Employee’s death or
Total Disability;
(iii) the
termination of this Agreement by the Employer pursuant to Section 8(c) without
Cause; or
(iv) the
termination of this Agreement by the Employee pursuant to Section 8(d) for other
than Good Reason.
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2.
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TERM.
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Subject
to the terms and conditions of this Agreement, the Company shall employ Employee
as its President, Chief Executive Officer, and Chairman of its Board of
Directors for a term commencing on the Commencement Date hereof and continuing
until March 31, 2012 or until earlier terminated pursuant to the provisions of
Section 8 hereof (the “Initial Term”). Upon expiration of the
Initial Term, this Agreement will automatically renew for additional one (1)
year periods (each a “Renewal Term”) unless either party notifies the other of
its intent not to so renew within ninety (90) days prior to the expiration of
the Initial Term or any Renewal Term. (The Initial Term and all Renewal Terms
shall collectively be referred to as the “Term”).
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3.
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DUTIES.
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(a) During
the Term, Employee agrees to serve Employer as its President, Chief Executive
Officer and Chairman of its Board of Directors (the “Board”) reporting to the
Board, and in such other executive capacities as may be agreed from time to time
by the Board (or a duly authorized committee thereof) and Employee; provided
that (i) Employee’s duties shall at all times be limited to those
commensurate with the foregoing offices, and (ii) Employee shall not be
obligated, without his consent, to relocate his principal office location from
Oxford, Connecticut (or the surrounding reasonable commuting area), although the
foregoing limitation is not intended to limit Employee’s requirement, in the
normal course of business, to travel to the Employer’s other business locations.
Employee shall serve, if elected, as a director of, and if agreed by Employee
and the board of directors of the organization in question, shall serve as an
officer and render appropriate services to, corporations directly or indirectly
controlled by Employer (“Employer’s Affiliates”) as Employer may from time to
time reasonably request (but only such services as shall be consistent with the
duties Employee is to perform for Employer and with Employee’s stature and
experience). All duties and services contemplated by this Section 3 are
hereinafter referred to as the “Services.”
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(b) During
the Term, Employee will devote his full business time and attention to, and use
his good faith efforts to advance, the business and welfare of Employer;
provided that the foregoing shall not restrict Employee’s rights to engage in
passive investment activities, to serve on the boards of directors of other
entities (so long as such activities are not violative of Section 4 below),
or to engage in civic, charitable and other similar activities.
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4.
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CONFIDENTIAL
INFORMATION AND COVENANT NOT TO
COMPETE.
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(a) Employee
hereby agrees that, during the Term and thereafter, he will not disclose to any
Person, or otherwise use or exploit in competition with Employer or Employer’s
Affiliates, any of the proprietary or confidential information or knowledge
treated by the Employer or Employer’s Affiliates as confidential, including
without limitation, trade secrets, processes, records of research, information
included in proposals, reports, methods, processes, techniques, computer
software or programming, or budgets or other financial information, regarding
Employer or Employer’s Affiliates, its or their business, properties or affairs
obtained by him at any time (i) during the Term or (ii) during any
employment of Employee with the Employer or any of Employer’s Affiliates prior
to the Commencement Date (“Prior Employment”), except to the extent required to
perform the Services; PROVIDED that the foregoing shall not apply to:
(A) information in the public domain other than by reason of a violation of
this Agreement by Employee, or (B) information that Employee is compelled
to disclose by operation of law or legal process (so long as Employee provides
Employer with prior notice of any such compelled disclosure and an opportunity
to defend against such disclosure), or (C) information generally known to
Employee by reason of his particular expertise that is not specific to the
Employer.
Page 2 of
10
(b) Employee
hereby agrees that during the Term and for a period of two years thereafter (the
“Non-Compete Term”), he will not (i) engage in or carry on, directly or
indirectly, any Competing Business in any Territory in which such Competing
Business is then engaged in by the Employer, (ii) allow his name to be used
by any Person engaged in any Competing Business, (iii) invest in, directly
or indirectly, any Person engaged in any Competing Business, or (iv) serve
as an officer or director, employee, agent, associate or consultant of any
Person engaged in a Competing Business (other than Employer or any Employer’s
Affiliate). Notwithstanding the foregoing, the Non-Compete Term shall be only
for the Term hereof in the event Employee’s employment hereunder is terminated
by the Employer hereunder without Cause (as provided in
Section 8(c) below) and shall be for a period of twelve (12) months
following such termination by the Employee with Good Reason (as provided in
Section 8(d) below). Subject to Section 3 (b) hereof,
nothing herein shall prohibit the Employee from (A) investing in any
business that is not a Competing Business or (B) investing in a
publicly-held entity if such investment (individually or as part of a group) is
limited to not more than five percent (5%) of the outstanding equity issue of
such entity.
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(c) All
intellectual properties developed by Employee during the Term or during any
Prior Employment and that is related to the business (or foreseeable business
prospects) of the Employer with which Employee is actively involved shall be for
the account of the Employer. Employee agrees to enter into such agreements
(including transfer documents) as may be reasonably required by Employer to
confirm the foregoing.
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(d) Employee
shall not, during the Non-Compete Term, directly or indirectly, solicit or
induce or attempt to solicit or induce any affiliate, director, agent, or
employee of Employer or contractor then under contract to the Employer, to
terminate his, her or its employment or other relationship with Employer for the
purpose of entering into a similar relationship with any Employer’s competitors
or for any other purpose or no purpose. Employee shall not, during the
Non-Compete Term, directly or indirectly, solicit or induce or attempt to
solicit or induce any customer or supplier of Employer to terminate his, her or
its relationship with Employer for the purpose of entering into a similar
relationship with any competitors of Employer or Employer’s Affiliates or for
any other purpose or no purpose.
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(e) Employee
agrees that the remedy at law for any breach by him of any of any of the
covenants and agreements set forth in this Section 4 will be inadequate and
will cause immediate and irreparable injury to Employer and that in the event of
any such breach, Employer, in addition to the other remedies which may be
available to it at law, shall be entitled to seek injunctive relief prohibiting
him from the breach of such covenants and agreements.
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(f)
The parties hereto intend that the covenants and agreements contained in this
Section 4 shall be deemed to include a series of separate covenants and
agreements, one for each and every county of the states in which the Employer
does business. If, in any judicial proceeding, the duration or scope of any
covenant or agreement of Employee contained in this Section 4 shall be
adjudicated to be invalid or unenforceable, the parties agree that this
Agreement shall be deemed amended to reduce such duration or scope to the extent
necessary to permit enforcement of such covenant or agreement.
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5.
INDEMNIFICATION.
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Employer
hereby agrees to indemnify Employee to the maximum extent permitted by Delaware
law at the time of the assertion, against any liability against Employee arising
out of or relating to his status as an employee, officer or director acting
within the course and scope of employment, office or director responsibility of
Employer or any Employer’s Affiliate at any time during the Term, whether such
liability is asserted during or after the Term.
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6.
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COMPENSATION
AND BENEFITS.
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(a) During
the Term, Employer shall pay Employee a salary at the rate of sixty
thousand five hundred and thirty one dollars ($60,531) per month
payable at least as frequently as monthly and subject to payroll deductions as
may be necessary or customary in respect of Employer’s salaried employees (“Base
Salary”). The Base Salary will be subject to an automatic annual increase
effective December 1 of each year during the Term in a percentage amount
equal to the greater of (i) five percent (5%) or (ii) the annual
percentage increase in the All-Items Consumer Price Index for All Urban
Consumers for such year as determined for the month of August.
Page 3 of
10
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(b) During
the term, Employee shall also be entitled to receive the benefits set forth in
Schedule A hereto (the “Additional Benefits”) as well as any normal
executive benefits of Employer not enumerated in that Schedule.
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(c) During
the Term, Employee shall also be entitled to receive annual-performance bonuses
in amounts and at times as follows:
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Employee
shall be entitled to an annual performance bonus with respect to each fiscal
year of the Employer during which Employee remains an employee of the Company
beginning with the fiscal year ending April 1, 2011, in an amount determined as
a percentage of Employee’s Base Salary, based on the following
criteria:
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Percentage
of Actual EBITDA to Plan
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Amount
of Bonus
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Less
than 90%
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Discretion
of Board of Directors
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90%
to 99.9%
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100%
of Base Salary
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100%
to 109.9%
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150%
of Base Salary
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110%
or higher
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200%
of Base Salary
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The
amount payable under this formula, if any, shall be paid to Employee within
fifteen (15) days following the publication of the Company’s financial
statements for each fiscal year of the Employer during the Term, but in no event
later than one hundred twenty (120) days following the end of such fiscal
year.
(d) Upon
execution of this Agreement, the Company shall pay Employee a signing bonus in
the amount of $500,000 and will grant Employee as of the
Commencement Date 25,000 shares of Restricted Stock which shall vest
over a three (3) year period on each subsequent anniversary of the Commencement
Date.
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7.
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EXPENSES.
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Employer
will pay or reimburse Employee for such reasonable travel, entertainment,
educational and other expenses as he may incur on behalf of Employer during the
Term in connection with the performance of his duties hereunder.
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8.
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TERMINATION
OF EMPLOYMENT.
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Notwithstanding
Section 1 hereof, the Initial Term may be terminated prior to March 31,
2012, and any Renewal Term may be terminated under the following
circumstances:
(a) DEATH
OR TOTAL DISABILITY. The Term shall automatically and immediately terminate upon
Employee’s death or “Total Disability.” For purposes of this Agreement,
“Total Disability” shall mean Employee’s physical or mental incapacitation or
disability that renders Employee unable to perform the Services as performed
prior to such incapacitation or disability for the period of twenty-six (26)
consecutive weeks or during anyone hundred fifty (150) business days (whether or
not consecutive) during any twelve (12) month period during the
Term.
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(b) TERMINATION
BY EMPLOYER FOR CAUSE. Employer, at its election, shall have the right to
terminate the Term, by written notice to Employee to that effect, for “Cause”.
The term “Cause” shall mean:
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(i)
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any
act of fraud, embezzlement, theft or conviction of a crime involving moral
turpitude;
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(ii)
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any
material breach by Employee of any material covenant, condition, or
agreement in this Agreement (“Employee’s Material Breach”);
or
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(iii)
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any
chemical dependency by Employee (other than in connection with medicines
prescribed for
Employee).
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To
terminate the Term pursuant to this Section 8(b), Employer shall give
written notice (“Cause Notice”) to the Employee specifying the claimed Cause. If
Employee fails to cure the same within thirty (30) days after the receipt of the
applicable Cause Notice (or such longer period as may be reasonably required if
such actions are subject to cure), the Term shall terminate at the end of such
thirty (30) day period or such longer reasonable period, as the case may be.
Notwithstanding anything that may be interpreted to the contrary, it is
expressly agreed that no act of the type contemplated by or described in
Section 8(b)(i) shall be capable of being cured by Employee and the
Employer may terminate Employee immediately without the requirement for such
cure period.
Page 4 of
10
(c) TERMINATION
BY EMPLOYER WITHOUT CAUSE. Employer shall have the right, at its election, to
terminate the Term at any time for any reason other than “Cause” upon not less
than sixty (60) days prior written notice to Employee.
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(d) TERMINATION
BY EMPLOYEE. Employee shall have the right, at his election, to terminate the
Term at any time by written notice to Employer upon not less than one hundred
and twenty (120) days prior written notice; provided, however, that
(i) such notice period shall be thirty (30) days in the case of a
termination for “Good Reason”; and (ii) if such termination is other than
for Good Reason the Non-Compete Term, for purposes of Section 4(b) and
(d), shall continue through March 31, 2012.
(e)
SALARY AND BENEFITS IN EVENT OF TERMINATION. Upon termination of the Term, the
following shall be applicable, notwithstanding anything to the contrary
elsewhere herein:
(i)
If the Term is terminated by Employer for Cause pursuant to Section 8
(b) or by Employee pursuant to Section 8 (d) other than for Good
Reason, Employee shall thereafter be entitled to the Base Salary and all
benefits, including the Special Benefits for six months following the effective
date of such termination, unless otherwise agreed by Employer.
(ii)
If the Initial Term is terminated (A) due to Employee’s death or Total
Disability pursuant to Section 8 (a) hereof, or (B) by the
Employer without Cause pursuant to Section 8
(c) hereof, (x) Employer shall pay to Employee on the date of
termination the Base Salary due to Employee for the then remainder of the period
ending March 31, 2012, net of any benefits paid to Employee pursuant
to any policy of disability insurance maintained by Employer, plus a PRO RATA
portion of the Employee’s annual bonus for the fiscal year of the Employer in
which such termination occurs (provided that in the case of
Employee’s death or Total Disability such payment and benefits shall extend for
no longer than for the then remainder of the period ending March 31, 2012), and
(y) Employee shall be entitled to all benefits including the Special Benefits
described in Section 6 (b) hereof for the then remainder of the period
ending March 31, 2012.
(iii) If
a Renewal Term is terminated (A) pursuant to Employee’s death or Total
Disability pursuant to Section 8 (a) hereof, or (B) by the
Employer without Cause pursuant to Section 8
(c) hereof, (x) Employer shall pay to Employee (or Employee’s
estate or designated beneficiaries) on the date of termination the Base Salary
due to Employee for the then remainder of the Renewal Term, net of any benefits
paid to Employee pursuant to any policy of disability insurance
maintained by Employer, plus a PRO RATA portion of the Employee’s annual bonus
for the fiscal year of the Employer in which such termination
occurs (provided that in the case of Employee’s death or Total
Disability such payment and benefits shall extend for no longer then remainder
of the Renewal Term), and (y) Employee shall be entitled to all benefits
including the Special Benefits described in Section 6 (b) hereof for
the than remainder of the Renewal Term.
(iv) If
a Change in Control occurs and if within 24 months after a Change in Control,
Employee’s employment is either terminated by the Company without Cause or by
Employee for Good Reason, Employee shall be entitled to the compensation and
benefits set forth in Schedule B, Change in Control Provisions.
(v)
If an Equity Vesting Triggering Event occurs, all restricted stock and stock
option awards that have been granted to Employee shall immediately and fully
vest and all stock options grants shall be exercisable by Employee on or before
the day which is thirty nine (39) months from the initial grant date, in the
case of stock option grants with three (3) year vesting, and on or before the
day which is sixty three (63) months from the initial grant date in the case of
stock option grants with five (5) year vesting. Approval of this Agreement by
the Company’s Board Compensation Committee shall be deemed approval of the
amendments of the restricted stock and stock option grants as provided in the
immediately preceding sentence for all purposes under the RBC 2005 Long-Term
Equity Incentive Plan as amended. The vesting provisions contained in this
subsection (v) shall take precedent over any vesting provisions contained in
Schedule B.
Page 5 of
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(f) DELIVERY
OF RECORDS UPON TERMINATION. Upon termination of the Term, Employee will deliver
to Employer all records of research, proposals, reports, memoranda, computer
software and programming, budgets and ether financial information, and ether
materials or records (including any copies thereof) made, used or obtained by
Employee in connection with his employment by Employer and/or any Employer’s
Affiliate.
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9.
MISCELLANEOUS.
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(a)
MODIFICATION AND WAIVER OF BREACH. No. waiver or modification of this
Employment Agreement shall be binding unless it is in writing signed by the
parties hereto and expressly stating that it is intended to modify this
Agreement. No waiver of a breach hereof shall be deemed to constitute a
waiver of a future breach, whether of a similar or dissimilar
nature.
(b)
NOTICES. All notices and other
communications required or permitted under this Employment Agreement shall be in
writing, served personally on, or made by certified or registered United States
mail to, the party to be charged with receipt thereof. Notices and
other communications served in person shall be deemed delivered when so served.
Notices and other communications served by mail shall be deemed delivered
hereunder 72 hours after deposit of such notice or communication in the United
States Post Office as certified or registered mail with postage prepaid and duly
addressed to whom such notice or communications is to be given, in the case
of
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(i) Employer:
RBC
Bearings Incorporated
One
Tribology Center
Oxford,
CT 06478
ATTN :
Chief Financial Officer
(ii)
Employee:
Michael
J. Hartnett
385 South
Street
Middlebury,
Connecticut 06762
Any party
may change said party’s address for purposes of this Section by giving to
the party intended to be bound thereby, in the manner provided herein, a written
notice of such change.
(c) COUNTERPARTS.
This instrument may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same Employment Agreement.
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(d) GOVERNING
LAW. Except as otherwise expressly provided herein, this Employment Agreement
shall be construed in accordance with, and governed by, the internal laws of the
State of Connecticut applicable to agreements executed and to be performed in
such state without regard to principles of choice of law or conflicts of
laws.
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(e)
COMPLETE EMPLOYMENT AGREEMENT. This Employment Agreement and its Exhibits
and Schedules, together contain the entire agreement between the parties hereto
with respect to the subject matter of this Employment Agreement and supersedes
all prior and contemporaneous oral and written negotiations, commitments,
writings, and understandings with respect to the subject matter of Employee’s
relationship with Employer, including Prior Employment Agreement which is
terminated effective as of the Commencement Date.
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(f)
NON-TRANSFERABILITY OF EMPLOYEE’S INTEREST. None of the rights of Employee to
receive any form of compensation payable pursuant to this Employment Agreement
shall be assignable or transferable. Any attempted assignment, transfer,
conveyance, or other disposition of any interest in the rights of Employee
hereunder shall be void.
Page 6 of
10
In
WITNESS WHEREOF, the undersigned have executed this Employment Agreement on the
day and year first above written.
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EMPLOYEE:
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/s/
Michael J. Hartnett
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MICHAEL
J. HARTNETT
EMPLOYER:
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RBC
BEARINGS INCORPORATED
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By:
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/s/
Richard Crowell
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RICHARD
CROWELL
Chairman
Compensation
Committee
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Page 7 of
10
SCHEDULE A
TO EMPLOYMENT AGREEMENT BETWEEN MICHAEL J.
HARTNETT
AND RBC BEARINGS INCORPORATED, APRIL 4, 2010
SPECIAL
BENEFITS
1.
Employee shall be reimbursed by Employer, as valued, determined and approved by
the Vice President and Chief Financial Officer, for personal expenses up to a
total of $50,000 in any fiscal year. Such personal expenses may include, but not
be limited to, use of the Employer’s aircraft facility.
2. At
Employer’s expense,
Executive
Medical Coverage ($10,000 per year supplemental coverage).
Dental
insurance.
Prescription
drug coverage.
The above
medical, dental and prescription drug coverage benefits are subject to change at
any time at the discretion of the Board of Directors of Employer; provided that
such coverages provided to Employee shall at all times be at least as beneficial
to Employee as are the coverages provided to other of Employer’s executive
employees and shall always be fully paid by the Employer.
The above
medical, dental and prescription drug coverage shall be in addition to
Employee’s participation in any medical, hospitalization of related coverage
maintained by Employer for the benefit of all its employees.
3. At
Employer’s expense, disability insurance at least as beneficial to Employee as
the disability provided for Employee immediately preceding the Commencement Date
of this Agreement, provided that within that limitation, such insurance may be
modified from time to time at the discretion of the Board of Directors of
Employer.
4. The
Employer shall maintain an appropriate apartment or other dwelling in Los
Angeles for use by the Employee throughout the Term. The parties acknowledge
that “appropriate” shall mean of at least the quality and convenience of the
dwelling maintained for this purpose immediately preceding the Commencement date
of the Agreement. .
5.
Employee shall be provided six weeks of paid vacation for each twelve month
period during the Term, to accrue PRO RATA during the course of each such twelve
month period; and payable at Employee’s then- effective base salary rate on
termination if not used during the Term.
6.
Employee shall have unrestricted use of an appropriate automobile throughout the
Term at the Employer’s expense, including without limitation, fuel, insurance,
maintenance and repair. When the Agreement expires or otherwise terminates,
Employee shall have the option to assume the lease or purchase the vehicle for
its book value as of the Termination date, such option to be exercised within
two months of said Termination date. The parties acknowledge that “appropriate”
shall mean of at least the quality and convenience of the automobile used for
this purpose immediately preceding the Commencement date of the
Agreement.
7. During
the Initial term, Employee shall have the option of purchasing the condominium
owned by the Company at 22432 Manacor in Mission Viejo, California for a price
equal to the Company’s then current book value.
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SCHEDULE B
TO EMPLOYMENT AGREEMENT BETWEEN MICHAEL J.
HARTNETT
AND RBC BEARINGS INCORPORATED, APRIL 4, 2010
CHANGE OF
CONTROL PROVISIONS
1. (a) If
a Change in Control occurs and if within 24 months after a Change in Control,
your employment is either terminated by the Company without Cause or by you for
Good Reason , the Company will pay you on your date of termination a single lump
sum cash payment equal to the sum of:
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The
base salary, unused vacation and any annual bonus applicable to a
completed fiscal year, which have not yet been paid to you through the
date of termination;
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A
bonus equal to your annual base salary applicable to you on your
termination date, multiplied by your maximum target bonus percentage then
in effect and prorated to account for the number of days you were employed
by the Company during the Fiscal Year in which you were
terminated.
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A
severance payment equal to the sum of (i) 250% of your annual base salary,
and (ii) 250% of your Target Bonus in effect on such
date. “Target Bonus” shall mean the amount payable under all
annual incentive compensation plans of the Company in which you
participate, waiving any condition precedent to the payment to you and
assuming that the performance goals for the period were achieved at the
100% level.
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reimbursement for all documented expenses, up to $15,000, actually
incurred by you for professional outplacement services within 3 months
after your termination.
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(b) For
the 18 month period following the termination of the your employment, the
Company (or the subsidiary that employed you) will continue to provide coverage
and participation to you at the same participation, coverage and benefit levels
(or will provide their equivalent) and pay the full cost of coverage and
participation under the employee health and other welfare plans maintained by
the Company and applicable to you on your termination date.
(c) Immediately
prior to a Change in Control, you will completely vest in all restricted stock
and stock options that have been granted to you. Approval of this Agreement by
the Company’s Board Compensation Committee shall be deemed approval of the
vesting of restricted stock and stock options as provided in the immediately
preceding sentence for all purposes under the RBC 2005 Long-Term Equity
Incentive Plan as amended. All stock options that have been granted
to you will additionally be exercisable by you for a period of 18 months
following the termination of your employment.
(d) All
amounts paid under these Change in Control provisions shall be subject to
applicable tax withholding.
(e) In
exchange for and prior to receipt of these benefits you agree to execute and
deliver to the Company its general release agreement applicable to severed
employees.
2. You
agree that in the event a third party (a) begins a tender or exchange
offer; (b) circulates a proxy to stockholders; or (c)
takes other steps to effect a Change in Control, you will not voluntarily
terminate employment with the Company (or the subsidiary that employs you)
unless you provide at least 3 months prior written notice to the Board of
Directors of the Company, and you will continue to render the
services expected of your position, and you will represent the best interests of
the stockholders of the Company until the third party has abandoned or
terminated the efforts to effect a Change in Control or until a Change in
Control has occurred and your employment has been terminated.
3. If
you die prior to the time all payments due to you under these Change in Control
provisions have been made, then as soon as practicable after your death (but in
no event later than one month after), the Company shall pay in a lump sum all
sums not paid to you prior to your death. Payment shall be made to your
designated beneficiary or beneficiaries named under the 401(k) plan maintained
by the Company on the date of your death. If no such beneficiary is named, such
sums shall be paid to your estate.
Page 9 of
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4. Payments
made pursuant to these Change in Control provisions are intended to be exempt
from Code §409A as separation pay to the greatest extent possible. Accordingly,
all provisions herein shall be construed and interpreted consistent with that
intent, but that, to the extent necessary the Company shall amend any
such provision pertaining to such payment to comply with Code §409A, and the
regulations thereunder, in the least restrictive manner necessary
without any diminution in the value of the payments to you.
Page 10
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