Exhibit 10.2

 

March 5, 2009

 

CONFIDENTIAL

 

Mr. Edward Schwartz

 

Dear Ed:

 

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 March 4, 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 twelve (12)
months at your annual base salary rate in effect on the Termination Date
totaling Four Hundred Thousand and 00/100 ($400,000.00) , 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
Two Hundred Eighty Thousand Dollars ($280,000) paid in equal installments over
the twelve (12) month period described in Item (a) above, in accordance with the
Company’s usual payroll practices, subject to all applicable withholding and
reporting requirements.

 

(c)                                  The amount of Seventy Thousand and 00/100
($70,000.00), representing the AVCP bonus payment for 2008 declared as payable
to you by the Company’s Compensation Committee.  This amount will be paid in
equal installments over the twelve (12) month period described in Item
(a) above, in accordance with the Company’s usual payroll practices, subject to
all applicable withholding; provided

 

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that the payments will be accelerated as follows: (i) after payment pursuant to
1(g) below, the balance of the amount payable under this paragraph will be paid
at the next regularly scheduled payroll date, subject to any delay in payment
required under Section 409A, and (ii) any amount subject to delay pursuant to
Section 1(c)(i) will be paid on the first payroll date that occurs on or after
the date six (6) months and one (1) day following your Termination Date.

 

(d)                                 The amount of Forty Eight Thousand Three
Hundred Twenty Nine and 00/100 Dollars ($48,329), 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 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 12-month period
described in Item (a) above, in accordance with the Company’s usual payroll
practices, subject to all applicable withholding and reporting requirements.

 

(e)                                  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.

 

(f)                                    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.               12-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.

 

(g)                                 The amount of Sixty Nine Thousand One
Hundred Ninety Seven and 00/100 Dollars ($69,197), adjusted for gains and losses
from February 27, 2009 to the date of distribution, plus any contributions for
the first quarter of 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

 

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and reporting requirements; which amount shall be paid by the Company to you in
a lump sum during the first month after the Termination Date.

 

(h)                                 It is agreed that on the Termination Date,
you will be vested in 7,083 of the restricted shares granted to you under the
2006 Long Term Equity Incentive Plan (comprised of (i) 3,000 previously vested
restricted shares from the September 1, 2007 grant, (ii) 1,750 restricted shares
vesting as of the Termination Date with respect to the September 1, 2007 grant,
and (iii) 2,333 restricted shares vesting as of the Termination Date with
respect to the April 2, 2008 grant).  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 Fifteen Thousand One
Hundred Eighty Four and 00/100 Dollars ($15,184.00) 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 of TriMas and any of its subsidiaries and
affiliates 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
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”

 

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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 Benefits payments provided for under this Agreement, 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 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 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

 

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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 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

 

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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.  TriMas will provide you a
written reference for employment purposes under the signature of the President /
Chief Executive Officer that positively reflects your contributions and
leadership during your tenure with the Company. The Company will work with you
to complete the letter within fourteen (14) days of the expiration of the
revocation period in paragraph 10 below.

 

10.                                 Consideration Time and Revocation Period.

 

(a)                                You acknowledge you have sufficient time,
totaling twenty-one (21) days from receipt of this Agreement on March 4, 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.

 

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(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 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

 

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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 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.

 

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 TriMas Corporation

 

 

 

 

 

Date:

 3/5/09

 

By:

 /s/ Joshua Sherbin

 

 

 

 

 

 

 

 

Name:

 Joshua Sherbin

 

 

 

Title:

 VP / General Counsel

 

 

 

 

 

 

 

 

 

Executive

 

 

 

 

 

Date:

 3/5/09

 

 

  /s/ Edward L. Schwartz

 

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