Exhibit 10.1

EXECUTIVE OFFICER SEVERANCE AGREEMENT

THIS EXECUTIVE OFFICER SEVERANCE AGREEMENT (“Agreement”) made and entered into
as of the ___ day of June, 2020, by and between HELIOS TECHNOLOGIES, INC., a
Florida corporation, along with its affiliates and subsidiaries (together, the
“Company”) and Josef Matosevic (“Executive”).

W I T N E S S E TH:

WHEREAS, Executive is the President and Chief Executive Officer of the Company;
and

WHEREAS, the Company wishes to provide severance benefits to Executive in the
event of an involuntary terminations of Executive’s employment, as specified
herein;

NOW, THEREFORE, in consideration of the foregoing recitals and the agreements of
the parties contained herein, the parties do hereby agree as follows:

1.Purpose and Intent.  The Board of Directors of the Company (the “Board”)
desires to provide certain protections to the Executive in the event of an
involuntary termination of his or her employment that does not occur in
connection with a change in ownership or control of the Company.  Accordingly,
the Board has determined that appropriate steps should be taken to enter into an
agreement to provide such protections to the Executive.  This Agreement is not
intended to alter materially the compensation and benefits that Executive could
reasonably expect in the absence of an “Involuntary Termination of Employment”
(as defined below in Section 4) and, accordingly, this Agreement, although
taking effect upon the parties’ execution hereof, will be operative only upon an
Involuntary Termination of Employment.

2.Term of Agreement.  This Agreement shall be effective upon the execution by
the parties, and shall remain in effect until the date Executive’s employment by
the Company is terminated; provided, however, that if Executive experiences an
Involuntary Termination of Employment, the term shall continue in effect until
all payments and benefits have been made or provided to Executive under this
Agreement.

3.Eligibility for Severance.  Executive becomes eligible to receive Severance
(as defined below in Section 5) under this Agreement upon an Involuntary
Termination of Employment, provided that the Executive:

(a)performs all transition and other matters required of the Executive by the
Company prior to Executive’s Involuntary Termination of Employment;

 

(b)returns to the Company any property of the Company which has come into the
Executive’s possession;

 

(c)returns (and does not thereafter revoke), within sixty (60) days from
receipt, a signed original general release in a form acceptable to the Company,
in its sole and absolute discretion (the “Release”), under which the Executive,
among other things, release and discharges the Company and its subsidiaries and
affiliates from all claims and liabilities, including without limitation, claims
under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act of 1990, the Family and Medical Leave Act, the Equal Pay Act, ERISA, the Age

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Discrimination in Employment Act, the Civil Rights Act of 1991, Section 1981 of
U.S.C. Title 42, the Sarbanes-Oxley Act of 2002, the Worker Adjustment and
Retraining Notification Act of 1988, and the Older Workers’ Benefit Protection
Act of 1990; and

 

(d)complies with the restrictive covenants set forth in any other agreement
between the Company and Executive.  Executive shall forfeit, and repay if
already paid by the Company, the Severance, if he or she violates any of these
restrictive covenants.

 

4.Involuntary Termination.  For purposes of this Agreement, an Involuntary
Termination of Employment shall be deemed to occur if:

 

(a)there has been an actual termination by the Company of Executive’s
employment, other than (i) “For Cause” (as defined in Section 7 below), (ii)
Executive’s death, (iii) on account of an accident or illness which renders
Executive unable, for a period of at least six (6) consecutive months, to
perform the essential functions of his or her job notwithstanding the provision
of reasonable accommodation by the Company; or (iv) a Termination in Connection
with a Change in Control, as defined in the Executive Continuity Agreement
between Executive and Company dated June 9, 2020.

(b)the Company reduces Executive’s salary (except in the case of a reduction of
no more than ten percent (10%) that applies to all similarly-situated executives
of the Company), reduces reward opportunities (which will be evaluated in light
of the performance requirements therefor), reduces other compensation, deprives
Executive of any material fringe benefit, a material diminution in Executive’s
authority, duties, or responsibilities, a material diminution in the authority,
duties, or responsibilities of the person to whom Executive is required to
report, a material diminution in the budget over which Executive retains
authority, or a relocation of Executive’s primary office more than seventy-five
(75) miles from his or her then current office location, but not closer to his
or her principal residence (each, a “Good Reason” event), without his or her
prior express written approval; provided that the Executive must notify the
Company of such event in writing within thirty (30) days of its occurrence,
specifying the circumstance that the Executive claims constitutes Good Reason,
at which time the Company will then have fifteen (15) days to cure such Good
Reason event, and if the Company fails to do so, the Executive must provide a
notice of termination within ten (10) days of the expiration of the fifteen-day
cure period in order for his or her resignation to constitute a resignation for
Good Reason and qualify under this subsection (b); or

(c)any material breach by the Company of any provision of this Agreement.

5.Compensation Upon an Involuntary Termination of Employment.  

(a)Subject to the terms of this Agreement, including but not limited to the
satisfaction of the requirements in Section 3, upon an Involuntary Termination
of Employment during the term of this Agreement, Executive shall be entitled to
receive the following payments and benefits:

 

(i)

continuation of Executive’s annual base salary at the time of termination for
the eighteen (18) month period following the date of the Involuntary Termination
of Employment, payable according to the Company’s normal payroll cycle;

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(ii)

one hundred fifty percent (150%) of the target value at the time of grant of the
annual short-term incentive compensation award to the Executive, if any, granted
during the current fiscal year or, if the Compensation Committee of the Board of
Directors has not yet met to consider the annual short-term incentive
compensation award to the Executive for the current fiscal year, then the target
value at the time of grant of the annual short-term incentive compensation award
to the Executive, if any, granted during the immediately preceding fiscal year,
payable within fifteen (15) days following the expiration of the period in which
the Executive has the right to revoke the Release described in Section 3(c); and

 

(iii)

continuing medical, dental, life, disability and hospitalization benefits as
elected by the Executive under the Company’s employee benefit plans after
termination pursuant to the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”), at Company expense, for Executive and his or her family as then in
effect, for a period of twelve (12) months following the date of termination.

The employer contribution for COBRA coverage will not be provided to the
Executive, however, to the extent that the Company reasonably determines that
doing so would subject the Company to the excise tax under Section 4980D of the
Code (as a result of discriminatory coverage under an insured health
plan).  Except as required by law, under no circumstances shall the Company have
the right to delay payment of any amounts due under this Agreement.  

(b)Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Agreement be
reduced by any amounts earned or accrued through the date of termination or by
any amounts to which Executive shall be entitled by law (nor shall payment
hereunder be deemed in lieu of such amounts), by any retirement benefits after
the date of termination, or otherwise.

(c)The treatment of any equity incentive awards that are held by Executive upon
an Involuntary Termination of Employment shall be governed under the terms of
the Company’s equity incentive plans and the award agreements under which such
awards were granted. No awards shall be subject to accelerated vesting or
exercisability as a result of an Involuntary Termination of Employment.

(d)Anything to the contrary notwithstanding, all payments required to be made by
the Company hereunder to Executive or his or her estate or beneficiaries shall
be subject to the withholding of such amounts, if any, relating to tax and other
payroll deductions as the Company may reasonably determine it should withhold
pursuant to applicable law or regulation.  In lieu of withholding such amounts,
the Company may accept other provisions to the end that it has sufficient funds
to pay all taxes required to be withheld in respect of any of such payments.

6.Tax Matters.  

(a)Section 409A of the Code.

 

 

(i)

Notwithstanding anything herein to the contrary, this Agreement is intended to
be interpreted and applied so that the payments and benefits set forth herein
shall either

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be exempt from the requirements of Section 409A of the Internal Revenue Code
(the “Code”) or shall comply with the requirements of Section 409A of the Code,
and, accordingly, to the maximum extent permitted, this Agreement shall be
interpreted to be exempt from or in compliance with Section 409A of the Code.
Notwithstanding anything in this Agreement or elsewhere to the contrary, a
termination of employment of Executive shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits that constitute “non-qualified deferred compensation” within
the meaning of Code Section 409A upon or following a termination of Executive’s
employment unless such termination is also a “separation from service” within
the meaning of Code Section 409A and, for purposes of any such provision of this
Agreement, references to a “termination,” “termination of employment” or like
terms shall mean “separation from service” and the date of such separation from
service shall be the date of an Involuntary Termination of Employment for
purposes of any such payment or benefits.

 

(ii)

To the extent that the Company determines that any provision of this Agreement
would cause Executive to incur any additional tax or interest under Section 409A
of the Code, the Company shall be entitled to reform such provision to attempt
to comply with or be exempt from Section 409A of the Code through good faith
modifications. To the extent that any provision hereof is modified in order to
comply with Section 409A of the Code, such modification shall be made in good
faith and shall, to the maximum extent reasonably possible, maintain the
original intent and economic benefit to the Executive and the Company without
violating the provisions of Section 409A of the Code.

 

(iii)

Notwithstanding any provision in this Agreement or elsewhere to the contrary, if
on the date of Executive’s termination of employment with the Company  Executive
is deemed to be a “specified employee” within the meaning of Section 409A of the
Code, any payments or benefits due upon a termination of Executive’s employment
under any arrangement that constitutes a “deferral of compensation” within the
meaning of Section 409A of the Code (whether under this Agreement, any other
plan, program, payroll practice or any equity grant) and which do not otherwise
qualify under the exemptions under Treas. Reg. § 1.409A-1 (including without
limitation, the short-term deferral exemption and the permitted payments under
Treas. Reg. § 1.409A-1(b)(9)(iii)(A)), shall be delayed and paid or provided to
Executive in a lump sum (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) on the earlier of
(i) the date which is six (6) months and one (1) day after the Executive’s
“separation from service” (as such term is defined in Section 409A of the Code)
for any reason other than death, and (ii) the date of Executive’s death, and any
remaining payments and benefits shall be paid or provided in accordance with the
normal payment dates specified for such payment or benefit.

 

(iv)

For purposes of the application of Treas. Reg. § 1.409A-1(b)(4) (or any
successor provision), each payment under this Agreement to Executive (including
any installment payments) shall be deemed a separate payment.

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(v)

In no event may Executive, directly or indirectly, designate the calendar year
of any payment to be made under this Agreement or otherwise which constitutes a
“deferral of compensation” within the meaning of Section 409A of the Code. If
the period for signing and returning or revoking the Release designated by the
Company extends into a later taxable year, any payments that are subject to Code
Section 409A and contingent upon the Release will be made (or begin) in the
later taxable year.

 

(vi)

With respect to any expense, reimbursement or in-kind benefit provided pursuant
to this Agreement that constitutes a “deferral of compensation” within the
meaning of Section 409A of the Code, (a) the expenses eligible for reimbursement
or in-kind benefits provided to Executive must be incurred during the
Executive’s employment with the Company or the term of this Agreement (or
applicable survival period), (b) the amount of expenses eligible for
reimbursement or in-kind benefits provided to the Executive during any calendar
year will not affect the amount of expenses eligible for reimbursement or
in-kind benefits provided to Executive in any other calendar year, (c) the
reimbursements for expenses for which Executive is entitled to be reimbursed
shall be made on or before the last day of the calendar year following the
calendar year in which the applicable expense is incurred, and (d) the right to
payment or reimbursement or in-kind benefits hereunder may not be liquidated or
exchanged for any other benefit.

(b)Section 280G of the Code. If any payments or benefits otherwise payable to
the Executive under this Agreement are determined to be in connection with a
change in ownership or control (as defined in Treasury Regulation Section
1.280G-1) and would, when combined with any other payments or benefits the
Executive becomes entitled to receive that are contingent on the same change in
ownership or control (such payments and benefits to be referred to as “Parachute
Payments”) would: (i) constitute a “parachute payment” within the meaning of
Section 280G of the Code; and (ii) but for this sentence, be subject to the
excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
payments and benefits payable to the Executive under this Agreement shall be
reduced to the largest amount which can be paid to Executive without triggering
the Excise Tax, but only if and to the extent that such reduction would result
in Executive retaining larger aggregate after-tax payments (the “Reduced
Amount”). Any determination of the Excise Tax or the Reduced Amount required
under this Section 6(b) shall be made in writing by the Company’s independent
public accountants, whose determination shall be conclusive and binding upon the
Company and the Executive for all purposes.  For purposes of making the
calculations required by this Section 6(b), the accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code.  The Company and the Executive shall furnish such
information and documents as the accountants may reasonably request in order to
make a determination under this Section 6(b). The Company shall bear all costs
the accountants may reasonably incur in connection with any calculations
contemplated by this Section 6(b).

 

 

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7.Definition of “For Cause”.  The termination of Executive’s employment by the
Company shall be deemed “For Cause” if it results from (a) the commission of an
act of fraud, embezzlement, theft or proven dishonesty, or any other illegal act
or practice (whether

or not resulting in criminal prosecution or conviction), including theft or
destruction of property of the Company, or any other act or practice which the
Board of Directors of the Company (the “Board”) shall, in good faith, deem to
have resulted in the recipient’s becoming unbondable under the Company’s
fidelity bond; (b) the willful engaging in misconduct which is deemed by the
Board, in good faith, to be materially injurious to the Company, monetarily or
otherwise, including, but not limited to, improperly disclosing trade secrets or
other confidential or sensitive business information and data about the Company
and competing with the Company, or soliciting employees, consultants or
customers of the Company in violation of law or any employment or other
agreement to which the recipient is a party; (c) the continued failure or
habitual neglect by the Executive to perform his or her duties with the Company;
or (d) other disregard of the Company’s Bylaws, Code of Business Conduct and
Ethics, or other rules or policies of the Company or any subsidiary, or conduct
evidencing willful or wanton disregard of the interests of the Company. For
purposes of this Agreement, no act or failure to act by the recipient shall be
deemed “willful” unless done or omitted to be done by the Executive not in good
faith and without reasonable belief that the Executive’s action or omission was
in the best interest of the Company. Notwithstanding the foregoing, if Executive
has entered into an employment agreement that is binding as of the date of such
event, and if such employment agreement defines “Cause,” then the definition of
“Cause” in such agreement shall apply. The determination of whether the
Executive has engaged in an act that constitutes Cause shall be made by the
Board, which prior to making such determination shall provide written notice of
the event of Cause to the Executive and allow the Executive a reasonable
opportunity to cure such event.

8.Miscellaneous.

(a)Intent.  This Agreement is made by the Company in order to induce Executive
to remain in the Company’s employ, with the Company’s acknowledgment and intent
that it will be relied upon by Executive, and in consideration of the services
to be performed by Executive from time to time hereafter.  However, this
Agreement is not an agreement to employ Executive for any period of time or at
all.  This Agreement is intended only as an agreement to provide Executive with
specified compensation and benefits if there is an Involuntary Termination of
Employment.

 

(b)Governing Law.  This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Florida.  Any action
brought by a party to this Agreement shall be brought and maintained in a court
of competent jurisdiction in Sarasota County, Florida.

 

(c)Assumption of Agreement.  The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree in writing to perform this Agreement.  Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall require the
Company to pay to Executive compensation from the Company in the same amount and
on the same terms as Executive would be entitled hereunder in the event of an
Involuntary Termination of Employment, except that for purposes of implementing
the foregoing, the date on which any

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such succession becomes effective shall be deemed to be the date on which
Executive shall receive such compensation from the Company.  As used in this
Agreement, “Company” shall mean the Company as herein above defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law or otherwise.

 

(d)Successors and Assigns.  This Agreement shall inure to the benefit of, and be
enforceable by, Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.  If
Executive should die while any amount would still be payable to Executive
hereunder if Executive had continued to live, all such amounts, shall be paid in
accordance with the terms of this Agreement to Executive’s devisee, legatee or
other designee or, if there is no such designee, to Executive’s estate.

 

(e)Notices.  Except as otherwise expressly provided herein, any notice, demand
or payment required or permitted to be given or paid shall be deemed duly given
or paid only if personally delivered or sent by United States mail and shall be
deemed to have been given when personally delivered or three (3) days after
having been deposited in the United States mail, certified mail, return receipt
requested, properly addressed with postage prepaid.  All notices or demands
shall be effective only if given in writing.  For the purpose hereof, the
addresses of the parties hereto (until notice of a change thereof is given as
provided in this Section 8(e), shall be as follows:

The Company:

Melanie M. Nealis, Esq.

Chief Legal & Compliance Officer

Helios Technologies, Inc.

1500 W. University Parkway

Sarasota, FL 34243

 

Executive:

Josef Matosevic

2031 Harbour Watch Circle

Tarpon Springs, FL 34689

 

 

(f)Severability.  In the event any provision in this Agreement shall be invalid,
illegal or unenforceable, such provision shall be severed from the rest of this
Agreement and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

(g)Entirety.  This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes any prior or
contemporaneous agreement or understandings relating to the subject matter
hereof.

 

(h)Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent or limit
Executive’s continuing or future participation in any benefit, bonus, incentive
or other plan or program provided by the Company (except for any severance or
termination policies, plans, programs or practices) and for which Executive may
qualify, nor shall anything in this Agreement limit or reduce such rights as
Executive may qualify, nor shall anything in this Agreement limit or reduce such
rights as Executive may have under any other agreements with the Company (except
for any severance or termination agreement).  Amounts that are vested benefits
or that Executive

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is otherwise entitled to receive under any plan or program of the Company shall
be payable in accordance with such plan or program, except as explicitly
modified by this Agreement.

 

(i)Amendment.  This Agreement may be amended only by a written instrument signed
by the Company and Executive, which makes specific reference to this Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

HELIOS TECHNOLOGIES, INC.EXECUTIVE

 

 

 

 

 

 

 

 

By:

 

 

 

 

Tricia L. Fulton

Chief Financial Officer

 

 

 

 

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