Exhibit 10.1

 

January 13, 2009

 

CONFIDENTIAL

 

Mr. Grant H. Beard

 

Dear Grant:

 

The purpose of this letter (“Agreement”) is to confirm our understanding and
agreements regarding your separation from employment with TriMas Corporation
(“Company” or “TriMas”).  For purposes of this Agreement, TriMas or Company
includes all of its subsidiaries and affiliates.

 

1.                                       Employment and Severance Benefits

 

Your employment with TriMas will end on January 13, 2009 (the “Termination
Date”), and the termination of your employment is intended to constitute a
“separation from service” as defined under Internal Revenue Code Section 409A
and Treasury regulations issued under that section (collectively
“Section 409A”).  Effective as of the Termination Date, TriMas will discontinue
your compensation and benefits, and you shall cease to accrue additional
benefits under any qualified or nonqualified retirement or incentive plans of
the Company.

 

In exchange for the agreements contained herein and after this Agreement becomes
binding, TriMas will, subject to the six month delay and separation pay
limitation described in Paragraph 15 below, pay you the following severance
benefits (“Benefits”):

 

(a)                                  Base salary continuation for twenty-four
(24) months at your annual base salary rate in effect on the Termination Date,
subject to all applicable withholding and reporting requirements.  Payment of
this benefit will commence on the first regular payroll date following
Termination Date and will be paid in accordance with the Company’s usual payroll
practices.

 

(b)                                 An amount equal to one (1) year’s bonus
under the Annual Value Creation Plan (“AVCP”) at your target level for 2009 of
Eight Hundred and Seventy-Five Thousand Dollars ($875,000) paid in equal
installments over the twenty-four (24) month period described in Item (a) above,
in accordance with the Company’s usual payroll practices, subject to all
applicable withholding and reporting requirements.  In addition, you will
receive the AVCP bonus payment for 2008 if such bonus is declared but not paid
before the Termination Date.

 

(c)                                  The amount of Thirty-One Thousand One
Hundred and Sixty-Four Dollars ($31,164), representing one (1) year’s AVCP bonus
at your target level for 2009, prorated for the number of days that you were
employed during 2009.  The amount is calculated by multiplying the full year
target bonus by a fraction, the

 

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numerator of which is the number of days during 2009 that you were employed and
the denominator of which is 365.  This amount will also be paid in equal
installments over the 24-month period described in Item (a) above, in accordance
with the Company’s usual payroll practices, subject to all applicable
withholding and reporting requirements.

 

(d)                                 Executive level outplacement services, as
determined by the Company, will be provided to you by an outplacement firm
selected by the Company until the earlier of the 12-month anniversary of the
Termination Date or the date on which you accept an offer of employment.

 

(e)                                  Provided that you timely elect to continue
health care coverage under COBRA and subject to the Company’s COBRA policies,
reimbursement of COBRA premiums to the extent described below for medical
benefits under Company group benefits (including health, dental and prescription
plans) as defined by the plan documents, until the earliest of:

 

i.                                          the termination of the COBRA period;

 

ii.                                       24-months following the Termination
Date; or

 

iii.                                  the date on which you become eligible to
receive any medical benefits under any plan or program of any other employer.

 

You will be responsible for payment of the COBRA premium and will be reimbursed
monthly by the Company for the portion of the premium that the Company would
have paid if you had continued to be an employee of the Company.  If you do not
become eligible for medical benefits of another employer and the COBRA period
expires before 24 months have lapsed, during the remaining portion of the
24-month period, the Company shall monthly pay you an amount in cash equal to
the amount that the Company would have paid for your coverage if you had
continued as an employee of the Company.

 

(f)                                    The amount of Two Hundred and Fifty-One
Thousand One Hundred and Seventy-Eight and 59/100 Dollars ($251,178.59),
adjusted for gains and losses from January 13, 2009 to the date of distribution,
plus any contributions for the fourth quarter of 2008 or for 2009 to the
Termination Date to be paid as full satisfaction of all your rights and benefits
under the Executive Retirement Program, subject to all applicable withholding
and reporting requirements; which amount shall be paid by the Company to you in
a lump sum on the first payroll date that occurs on or after the date six
(6) months and one (1) day following your Termination Date.

 

(g)                                 The benefits to which you are entitled under
the defined benefits portion of the Benefits Restoration Plan, to be paid in the
form and at the time permitted under the Benefits Restoration Plan. The net
present value of such benefit as of

 

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December 31, 2008 is $24,684. A payment of Sixteen Thousand Eight Hundred and
Seventy-Eight Dollars ($16,878), adjusted for gains or losses in 2009, in
accordance with the terms of the Benefits Restoration Plan for partial years,
which amount shall be paid by the Company to you in a lump sum on the first
payroll date that occurs on or after the date six (6) months and one (1) day
following your Termination Date.  The payments under this provision shall be in
full satisfaction of all your rights under the TriMas Benefits Restoration Plan
and shall be subject to all applicable withholding and reporting requirements.

 

(h)                                 It is agreed that on the Termination Date,
you will be vested in 16,082 of the restricted shares granted to you under the
2006 Long Term Equity Incentive Plan.  If the applicable performance targets for
2008 were satisfied, you will also vest on the Termination Date in a portion of
the performance units granted to you under the 2006 Long Term Equity Plan.  Your
rights with respect to such restricted shares and units shall be in accordance
with the terms of the 2006 Long Term Equity Plan.  All other grants of
restricted shares or performance units by the Company under any plan have lapsed
or will lapse as of the Termination Date.

 

(i)                                     The amount of Twenty Five Thousand
Dollars ($25,000), which shall be paid on the next normal payroll date following
the Termination Date, as consideration for your surrender, effective as of the
Termination Date, of any and all rights to stock options, whether vested or
unvested, granted to you under the 2002 Long-Term Equity Incentive Plan and all
agreements evidencing awards of such options; provided that this consideration
shall not be paid unless this Agreement is signed within the time period set
forth is Section 10(a) and is not revoked under Section 10(b) below.  If stock
options are not surrendered in accordance with this section, they will expire 90
days following the Termination Date.  In addition, the Company will pay you Five
Thousand Six Hundred and Nine Dollars ($5,609) for your accrued and unused
vacation time for calendar year 2009.  This payment will be made at the next
normal payroll date following the Termination Date, subject to all applicable
withholding and reporting requirements.

 

The amount, time and form of Benefits described in this Paragraph 1 are subject
to the terms and conditions set forth in this Agreement, including adjustments
described in Paragraph 15 to the extent required to comply with Section 409A.

 

2.                                       Resignation as Officer and Director;
Termination of Other Benefits.  You agree to sign a written letter of
resignation as an officer and director in a form acceptable to the Board.  Your
rights to any accrued and vested benefits under a qualified retirement plan
shall be determined in accordance with the applicable plan document.  Except as
provided herein, you will not receive any other payments or benefits and your
right to participate in or to receive any and all TriMas benefits will terminate
on the Termination Date.   No amounts paid under this Agreement shall constitute
compensation for purposes of any benefit plan.  Notwithstanding the foregoing or
anything else in this Agreement to the contrary, that certain Indemnification
Agreement between

 

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you and the Company, dated November 1, 2006, shall remain unmodified and in full
force and effect.

 

3.                                       Taxes.  Any payments made by TriMas
hereunder are subject to applicable federal, state and local tax withholding. 
You agree that you are exclusively liable for the payment of any federal, state,
local or other taxes that may be due as a result of any benefits received by you
as provided in this Agreement.

 

4.                                       Confidentiality.  Upon the Termination
Date, you will return to TriMas all originals and copies of TriMas documents and
all TriMas property.  You will continue to treat as strictly confidential all
Confidential Information.  You acknowledge that TriMas would be immediately and
irreparably harmed by an unauthorized disclosure of Confidential Information in
such manner and extent that it would be difficult or impossible to ascertain
with certainty the exact financial or economic damages.  For purposes of this
Agreement, “Confidential Information” includes, but is not limited to,
information (whether in tangible form or oral) relating to TriMas’ business,
finances, customers, suppliers, property, employees, technical information,
concepts, ideas, trade secrets, plans, formulas, drawings, designs, processes,
procedures, inventions, specifications, prototypes, samples, parts, data, and
manufacturing techniques.

 

5.                                       Non-Competition.  You accept the
following covenants restricting competition with the Company:

 

(a)                                  You acknowledge and recognize the highly
competitive nature of the business of Company and accordingly agree that for the
duration of the twenty-four (24) month period following the Termination Date you
shall not engage, either directly or indirectly, as a principal for your own
account or jointly with others, or as a stockholder in any corporation or joint
stock association, or as a partner or member of a general or limited liability
entity, or as an employee, officer, director, agent, consultant or in any other
advisory capacity in any business which designs, develops, manufacturers,
distributes, sells or markets the type of products or services sold, distributed
or provided by Company during the twelve (12) month period prior to the
Termination Date (“the Business”); provided that nothing herein shall prevent
you from (i) owning, directly or indirectly, not more than five percent (5%) of
the outstanding shares of, or any other equity interest in, any entity engaged
in the Business and listed or traded on a national securities exchange or in an
over-the-counter securities market, or (ii)  engaging, directly or indirectly,
as a partner, stockholder, member, manager, employee, officer, director, agent,
consultant or in any other advisory capacity in any entity engaged in the
Business, provided that not more than 5% of the gross revenue of such entity (or
any subsidiary or affiliate of such entity) is attributable to the types of
products or services sold, distributed, or provided by Company during the twelve
(12) month period prior to the Termination Date.  You will cooperate with
Company regarding validation of the exceptions in the foregoing sentence.

 

(b)                                 It is expressly understood and agreed that
although you and Company consider the restrictions contained in this Section to
be reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against you, the provisions of
this Section shall

 

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not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially
determine or indicate to be enforceable.  Alternatively, if any tribunal of
competent jurisdiction finds that any restriction contained in this Agreement is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

 

6.                                       Non-Solicitation.  For the duration of
the Benefits payments provided for under this Agreement or for the twenty-four
(24) month period following the Termination Date, whichever is longer, you shall
not (i) directly or indirectly employ or solicit, or receive or accept the
performance of services by, any active employee of TriMas or any of its
subsidiaries who is employed primarily in connection with the Business on the
Termination Date, except in connection with general, non-targeted recruitment
efforts such as advertisements and job listings, or directly or indirectly
induce any employee of TriMas to leave TriMas, or assist in any of the
foregoing, or (ii) solicit for business (relating to the Business) any person
who is a customer or former customer of TriMas or any of its subsidiaries,
unless such person shall have ceased to have been such a customer for a period
of at least six (6) months.

 

7.                                       Cooperation.

 

(a)                                  You agree that you will not in any way
criticize, disparage, attempt to discredit, demean or otherwise call into
disrepute TriMas.  Your obligations hereunder with respect to TriMas include its
successors, assigns, officers, directors, employees or agents, or any of TriMas’
products or services.

 

(b)                                 You agree that you will not assist any party
other than TriMas in any claim, litigation, proceeding or investigation against
TriMas or other Released Parties (as defined below), except as required by law. 
You further agree that if you believe any such action is required by law, you
will first afford TriMas the opportunity to raise and obtain a ruling on any
claim of attorney-client or other privilege, attorney work product protection,
contractual or other defense that may be applicable.

 

(c)                                  You agree to cooperate with TriMas and the
Released Parties (i) in any existing or future claim, litigation, proceeding,
investigation or other judicial, administrative or legislative matter in which
TriMas may desire your assistance, and (ii) with TriMas’ reasonable requests for
assistance with the transition of your duties or ordinary course assistance with
administrative matters relating to your services.  No additional consideration
will be provided for such assistance, but TriMas will pay or reimburse you for
reasonable expenses incurred by you in providing such assistance.

 

8.                                       Release; Acknowledgments.

 

(a)                                  You release and discharge TriMas, its
shareholders, directors, officers, agents, employees (current and former),
subsidiaries and any and all affiliate companies, as well as any predecessors
and successors to TriMas (collectively, the “Released Parties”), for yourself,
your

 

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spouse, heirs, agents and assignees, from all claims, liabilities, demands, and
causes of action, fixed or contingent and known or unknown, arising from your
employment, or any condition or benefit related to your employment or as a
result of your separation from employment, which you ever had, now have or may
have as of the date of signature of this Agreement; except that nothing herein
shall be construed as a release by you of your rights under this Agreement. 
This includes, but is not limited to (i) claims arising under any written or
oral agreement regarding compensation, benefits, or options or equity grants
(including, but not limited to, the TriMas Executive Severance/Change of Control
Policy, the Executive Retirement Program, the TriMas Benefits Restoration Plan,
the 2002 Long Term Equity Incentive Plan, and the 2006 Long Term Equity
Incentive Plan); (ii) claims arising under federal, state, or local workplace
law, including, without limitation, Title VII of the Civil Rights Act of 1964 or
any analogous state civil rights statutes (including, without limitation, the
Michigan Elliott-Larsen Civil Rights Act), the Age Discrimination in Employment
Act (“ADEA”), the Older Worker Benefit Protection Act (“OWBPA”), the Americans
with Disabilities Act, the Michigan Persons With Disabilities Civil Rights Act,
the Family and Medical Leave Act, the Fair Labor Standards Act, the National
Labor Relations Act, the Employee Retirement Income Security Act, and the
Michigan Whistle Blowers’ Protection Act; and (iii) claims for breach of express
or implied contract, breach of promise, promissory estoppel, loss of income,
back pay, reinstatement, front pay, impairment of earning capacity, wrongful
termination, defamation, libel, slander, discrimination, damage to reputation,
fraud, violation of public policy, retaliation, negligent or intentional
infliction of mental or emotional distress, intentional tort or any other
federal, state or local common law or statutory claims, and all other claims and
rights, whether in law or equity.  It is the intention of the parties that this
paragraph will be construed as broadly as permissible by law; however, this
paragraph does not include claims arising under state workers’ compensation laws
and state unemployment laws.  This paragraph also does not affect your right to
file a charge or otherwise participate in an EEOC proceeding insofar as it is
required by current EEOC regulations.  You understand that TriMas will assert
this Agreement as an affirmative defense against any claim asserted by you in
any forum.

 

(b)                                 In signing this Agreement, you agree to
waive any rights you might have to pursue any claims against the Released
Parties through any alternative dispute resolution process, or through any court
or administrative agency, to the extent permitted by law, and further agree not
to bring any suit or action in any court or administrative agency, to the extent
permitted by law, against any of the Released Parties, arising out of or
relating to the subject matter of this Agreement.

 

(c)                                  You acknowledge that this Agreement
provides additional and sufficient consideration for the release contained
herein.

 

9.                                       References.  If you seek a reference
for employment purposes, you agree to direct inquiries to TriMas’ Human
Resources Department.  References to be provided by TriMas regarding you shall
be limited to dates of employment, positions held and compensation.  Those
making such inquiries will be advised that it is the general policy of TriMas to
provide only such neutral references in response to employment inquiries.

 

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10.                                 Consideration Time and Revocation Period.

 

(a)                                  You acknowledge you have sufficient time,
totaling twenty-one (21) days from receipt of this Agreement on January 13, 2009
to determine if you wish to accept the terms.  In the event you sign and return
this Agreement before that time, you certify, by such execution, that you
knowingly and voluntarily waive the right to the full time period, for reasons
personal to you, with no pressure by TriMas to do so.  TriMas has made no
promises, inducements or threats to cause you to sign this Agreement before the
end of the twenty-one (21) day period.

 

(b)                                 You understand that you may revoke this
Agreement for a period of seven (7) calendar days following your execution of
the Agreement.  You understand that any revocation, in order to be effective,
must be: in writing and either (1) postmarked within seven (7) days of your
execution of the Agreement and addressed to General Counsel, TriMas Corporation,
39400 Woodward, Suite 130, Bloomfield Hills, MI  48304 or (2) hand-delivered
within seven (7) days of your execution of the Agreement to TriMas’ General
Counsel at the address listed above.  If revocation is by mail, certified mail,
return receipt requested is required to show proof of mailing.

 

(c)                                  No payments or benefits under this
Agreement shall be made to you until after the seven (7) day revocation period
has expired.  If you do not revoke this Agreement within the seven (7) day
revocation period, then this Agreement shall become fully and finally effective
and the payments and benefits provided hereunder will be made to you in
accordance with this Agreement.

 

11.                                 Complete Agreement.  In executing this
Agreement, you are doing so knowingly and voluntarily and agree that you have
not relied upon any oral statements by TriMas or its representatives, and that
this Agreement, when signed by both parties, supersedes any and all prior
written agreements between the parties regarding the terms of your employment or
the termination of such employment.  Any modification of this Agreement must be
made in writing and signed by you and an authorized representative of TriMas and
must specifically refer to and expressly modify this Agreement.

 

12.                                 Choice of Law.  This Agreement shall be
deemed to be made and entered into in the State of Michigan and shall in all
respects be interpreted, enforced and governed under the laws of the State of
Michigan, except if applicable federal law provides differently.

 

13.                                 Attorney.  You acknowledge that you have had
the opportunity to review this Agreement with an attorney of your choosing and
at your cost, and have been encouraged and given ample time to consult with your
own legal counsel prior to executing this Agreement.

 

14.                                 Consequences of Violation of Promise;
Remedies.  If you break the promise in Section 8 of this Agreement and file a
lawsuit based on legal or equitable claims that you have released, it is
expressly understood and agreed that the release and discharge is a complete
defense to the lawsuit. If litigation is brought to enforce the terms of this
Agreement, the prevailing party shall be entitled to reasonable legal fees and
costs incurred in the litigation.  You acknowledge and

 

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agree that Company’s remedies at law for a breach or threatened breach of any of
the provisions of Sections 4, 5, 6, or 7 would be inadequate and, in recognition
of this fact, you agree that, in the event of such a breach or threatened
breach, in addition to any remedies at law, you shall forfeit all payments of
Benefits otherwise due under this Agreement and shall return any payments of
Benefits made under the Agreement.  Moreover, Company, without posting any bond,
shall be entitled to seek equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available.

 

15.                                 Section 409A.

 

(a) Notwithstanding anything to the contrary in this Agreement, if you are a
“specified employee” within the meaning of Section 409A and the Treasury
Regulations and any guidance promulgated thereunder on the Termination Date, the
Benefits otherwise payable to you pursuant to this Agreement within the first
six (6) months following your termination of employment will become payable on
the first payroll date that occurs on or after the date six (6) months and one
(1) day following your Termination Date.  All other payments will be payable in
accordance with the payment schedule applicable to each payment. 
Notwithstanding anything herein to the contrary, if you die following your
Termination Date but prior to the six (6) month anniversary of your Termination
Date, then any payments delayed in accordance with this paragraph will be
payable in a lump sum as soon as administratively practicable after the date of
your death and all other payments will be payable in accordance with the payment
schedule applicable to each payment or benefit.  Each payment and benefit
payable under this Agreement is intended to constitute separate payments for
purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

 

(b) Any amount paid under the Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-l(b)(4) of the Treasury
Regulations will not be subject to the delay described in Item (a) above.

 

(c) Any amount paid under the Agreement that qualifies as a payment made as a
result of an involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed two
(2) times the maximum amount that may be taken into account under a qualified
plan pursuant to Section 401(a)(17) of the Code for the year in which your
employment is terminated will not be subject to (a) above.

 

(d) The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
ambiguities herein will be interpreted to so comply.  You and the Company agree
to work together in good faith and to take such reasonable actions as are
necessary, appropriate or desirable to avoid imposition of any additional tax or
income recognition prior to actual payment to you under Section 409A. 
Notwithstanding any portion of this Agreement, the Company does not guarantee a
particular tax effect.  The Company shall not be liable for any payment that is
determined to result in an additional tax, penalty, or interest under
Section 409A of the Code, nor for reporting in good

 

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faith any payment made under this Agreement as an amount includible in gross
income under Section 409A of the Code.  You shall remain liable for all taxes,
interest or penalties imposed under Section 409A of the Code.

 

 

 

 

 

 

TriMas Corporation

 

 

 

 

 

Date:

  1/30/09

 

By:

/s/ Joshua Sherbin

 

 

 

 

 

 

 

 

Name:

Joshua Sherbin

 

 

 

Title:

VP/ General Counsel

 

 

 

 

 

 

 

 

 

Executive

 

 

 

 

 

 

 

Date:

  1/30/09

 

 

/s/ Grant Beard

 

 

 

 

 

     Grant Beard

 

 

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