Exhibit 10.21

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of
September 8, 2008, by and between Haynes International, Inc. (the “Company”), a
Delaware corporation, and Mark M. Comerford (the “Executive”).

 

PRELIMINARY STATEMENTS

 

WHEREAS, the Company desires to employ the Executive, and the Executive desires
to be employed by the Company, on the terms and conditions set forth herein
effective as of October 1, 2008 (the “Effective Date”).

 

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

 

AGREEMENT

 

SECTION 1.           EMPLOYMENT.

 

(A)           OFFER AND ACCEPTANCE.  DURING THE “EMPLOYMENT TERM” (AS DEFINED IN
SECTION 1(C) BELOW), THE COMPANY AGREES TO EMPLOY THE EXECUTIVE IN THE POSITION
OF PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY UPON THE TERMS AND
SUBJECT TO THE CONDITIONS SET FORTH HEREIN, AND THE EXECUTIVE AGREES TO ACCEPT
EMPLOYMENT WITH THE COMPANY ON SUCH TERMS AND CONDITIONS.

 

(B)           DUTIES.  THE EXECUTIVE’S DUTIES SHALL INCLUDE THOSE DUTIES THAT
ARE CONSISTENT WITH HIS POSITION AS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE
COMPANY AS WELL AS THOSE REASONABLY ASSIGNED TO HIM FROM TIME TO TIME, IN GOOD
FAITH, BY THE BOARD OF DIRECTORS OF THE COMPANY (THE “BOARD”).  THE EXECUTIVE
SHALL (I) DEVOTE HIS WORKING HOURS, ON A FULL-TIME BASIS, TO HIS DUTIES UNDER
THIS AGREEMENT; (II) FAITHFULLY, INDUSTRIOUSLY AND LOYALLY SERVE THE COMPANY;
(III) COMPLY IN ALL MATERIAL RESPECTS WITH THE LAWFUL AND REASONABLE DIRECTIONS
AND INSTRUCTIONS GIVEN TO HIM BY THE BOARD; (IV) USE HIS REASONABLE BEST EFFORTS
TO PROMOTE AND SERVE THE INTERESTS OF THE COMPANY; AND (V) ASSIST THE BOARD WITH
SUCCESSION PLANNING.  THE EXECUTIVE SHALL COMPLY IN ALL MATERIAL RESPECTS WITH
ALL APPLICABLE LAWS, RULES AND REGULATIONS RELATING TO THE PERFORMANCE OF THE
EXECUTIVE’S DUTIES AND RESPONSIBILITIES HEREUNDER.  THE EXECUTIVE AGREES TO
SERVE, IF ELECTED, AS (I) A MEMBER OF THE BOARD AND ON ANY OF THE BOARD OF
DIRECTORS OF ANY SUBSIDIARY OR AFFILIATE OF THE COMPANY, AND (II) AS AN OFFICER
OF ANY SUBSIDIARY OR AFFILIATE OF THE COMPANY, WITHOUT ANY ADDITIONAL
COMPENSATION WHILE HE IS EMPLOYED BY THE COMPANY.  UPON TERMINATION OF THE
EXECUTIVE’S EMPLOYMENT BY THE COMPANY FOR ANY REASON, THE EXECUTIVE SHALL
IMMEDIATELY RESIGN FROM THE BOARD AND ANY OTHER POSITION AS A MEMBER OF THE
BOARD OF DIRECTORS OR AS AN OFFICER OF ANY SUCH SUBSIDIARY OR AFFILIATE OF THE
COMPANY.

 

(C)           EMPLOYMENT TERM.  THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY UNDER
THIS AGREEMENT SHALL COMMENCE ON THE EFFECTIVE DATE AND SHALL CONTINUE
THEREAFTER AND SHALL TERMINATE AS OF THE CLOSE OF BUSINESS ON SEPTEMBER 30, 2011
(THE “INITIAL EMPLOYMENT TERM”); PROVIDED, HOWEVER, COMMENCING ON OCTOBER 1,
2011 AND ON EACH ANNIVERSARY THEREAFTER, THE INITIAL EMPLOYMENT TERM SHALL
AUTOMATICALLY BE EXTENDED FOR AN ADDITIONAL ONE-YEAR PERIOD

 

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UNLESS EITHER THE BOARD OR THE EXECUTIVE GIVES WRITTEN NOTICE TO THE OTHER AT
LEAST 90 DAYS PRIOR TO SUCH ANNIVERSARY THAT THE TERM OF THE AGREEMENT SHALL NOT
BE EXTENDED.  THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY SHALL BE SUBJECT TO
TERMINATION AT ANY TIME DURING THE EMPLOYMENT TERM AS PROVIDED IN SUBSECTION
(E) OF THIS SECTION 1.  AS USED HEREIN, THE TERM “EMPLOYMENT TERM” SHALL MEAN
THE ACTUAL PERIOD OF TIME DURING WHICH THE EXECUTIVE IS EMPLOYED BY THE COMPANY
UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT.

 

(D)           COMPENSATION AND BENEFITS.  DURING THE EMPLOYMENT TERM, THE
COMPANY SHALL PAY AND PROVIDE THE FOLLOWING COMPENSATION AND OTHER BENEFITS TO
THE EXECUTIVE AS FULL COMPENSATION FOR ALL SERVICES RENDERED BY THE EXECUTIVE AS
AN EMPLOYEE OF THE COMPANY UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT. 
ALL PAYMENTS MADE TO THE EXECUTIVE HEREUNDER SHALL BE SUBJECT TO APPROPRIATE
PAYROLL DEDUCTIONS AND OTHER WITHHOLDINGS REQUIRED BY LAW.

 

(I)            ANNUAL SALARY.  DURING THE EMPLOYMENT TERM, THE COMPANY SHALL PAY
TO THE EXECUTIVE, IN ACCORDANCE WITH THE THEN PREVAILING PAYROLL PRACTICES OF
THE COMPANY, A BASE SALARY AT THE ANNUAL RATE OF $425,000.00 PER YEAR, SUCH
SALARY, TOGETHER WITH ANY SUBSEQUENT INCREASES AS DIRECTED BY THE BOARD FROM
TIME TO TIME, BEING HEREINAFTER REFERRED TO AS THE “ANNUAL SALARY.”

 

(II)           BONUSES/INCENTIVES.

 

(A)          ONE-TIME TRANSITION BONUS.  IN ORDER TO MAKE THE EXECUTIVE WHOLE
FOR THE VALUE OF BENEFITS THAT HE WILL FORFEIT FROM HIS PRIOR EMPLOYER, THE
COMPANY WILL PROVIDE A ONE-TIME TRANSITION BONUS IN THE AMOUNT OF $340,000.00 IN
CASH, PAYABLE WITHIN 15 DAYS OF THE EFFECTIVE DATE.

 

(B)           ANNUAL BONUS.  DURING THE EMPLOYMENT TERM AND BEGINNING WITH THE
FIRST FISCAL YEAR OF THE COMPANY COMMENCING ON OR AFTER THE EFFECTIVE DATE, THE
EXECUTIVE SHALL BE ELIGIBLE TO RECEIVE AN ANNUAL BONUS BASED UPON THE
ACHIEVEMENT BY THE COMPANY OF SPECIFIC PERFORMANCE REQUIREMENTS MEASURED OVER
THE COMPANY’S FISCAL YEAR (CURRENTLY THE TWELVE-MONTH PERIOD ENDING
SEPTEMBER 30) (E.G., EARNINGS PER SHARE, EBITDA BENCHMARKS AND WORKING CAPITAL
TARGETS) WHICH SHALL BE DETERMINED BY THE COMPENSATION COMMITTEE OF THE BOARD
(THE “COMMITTEE”) IN ITS SOLE AND ABSOLUTE DISCRETION (THE “BONUS”).  THE TARGET
AMOUNT FOR THE BONUS SHALL BE 80% OF THE ANNUAL SALARY, AS IN EFFECT AS OF THE
LAST DAY OF THE COMPANY’S FISCAL YEAR TO WHICH THE BONUS RELATES, (THE “TARGET
BONUS”); PROVIDED, HOWEVER, THE EXECUTIVE SHALL BE ELIGIBLE TO RECEIVE A MINIMUM
BONUS IN AN AMOUNT EQUAL TO 40% OF THE ANNUAL SALARY, AS IN EFFECT AS OF THE
LAST DAY OF THE COMPANY’S FISCAL YEAR TO WHICH THE BONUS RELATES, IF THRESHOLD
PERFORMANCE REQUIREMENTS ARE ACHIEVED AND A MAXIMUM BONUS IN AN AMOUNT EQUAL TO
120% OF THE ANNUAL SALARY, AS IN EFFECT AS OF THE LAST DAY OF THE COMPANY’S
FISCAL YEAR TO WHICH THE BONUS RELATES, IF MAXIMUM PERFORMANCE REQUIREMENTS ARE
ACHIEVED.  THE BONUS, IF ANY, FOR EACH YEAR DURING THE EMPLOYMENT TERM SHALL BE
PAID TO THE EXECUTIVE BY THE COMPANY IN A SINGLE SUM PAYMENT NO LATER THAN THE
15TH DAY OF THE THIRD MONTH FOLLOWING THE END OF THE COMPANY’S FISCAL YEAR.

 

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(C)           EQUITY INCENTIVE.  AS OF THE EFFECTIVE DATE, THE COMPANY SHALL
GRANT THE EXECUTIVE A NON-QUALIFIED STOCK OPTION TO ACQUIRE 20,000 SHARES OF
COMMON STOCK OF THE COMPANY.  THE BOARD WILL REVIEW AND CONSIDER ADDITIONAL
EQUITY INCENTIVES ANNUALLY DURING THE EMPLOYMENT TERM, AND THE EXECUTIVE MAY BE
GRANTED ADDITIONAL STOCK OPTIONS (IN ADDITION TO THE INITIAL GRANT) TO ACQUIRE
SHARES OF COMMON STOCK IN THE SOLE AND ABSOLUTE DISCRETION OF THE BOARD.  EACH
SUCH GRANT OF OPTIONS UNDER THIS SECTION 1(D)(II)(D) SHALL VEST AT THE RATE OF
ONE-THIRD (1/3) OF THE OPTIONS GRANTED ON EACH ANNIVERSARY OF THE APPLICABLE
GRANT DATE, AND SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF THE APPLICABLE
OPTION PLAN AND RELATED OPTION AGREEMENTS.

 

(III)          BENEFITS.  DURING THE EMPLOYMENT TERM, THE EXECUTIVE SHALL BE
ELIGIBLE TO PARTICIPATE IN ALL EMPLOYEE HEALTH AND WELFARE BENEFIT PLANS IN
WHICH SENIOR EXECUTIVES OF THE COMPANY ARE ENTITLED TO PARTICIPATE, BUT
PARTICIPATION SHALL BE SUBJECT TO ALL OF THE TERMS AND CONDITIONS OF SUCH PLANS
APPLICABLE TO ALL SUCH SENIOR EXECUTIVES, INCLUDING ALL WAITING PERIODS,
ELIGIBILITY REQUIREMENTS, CONTRIBUTIONS, EXCLUSIONS AND OTHER SIMILAR CONDITIONS
OR LIMITATIONS.  THE COMPANY SHALL USE REASONABLE EFFORTS TO SECURE TERM LIFE
INSURANCE COVERAGE FOR THE EXECUTIVE IN AN AMOUNT NOT LESS THAN FOUR TIMES
ANNUAL SALARY, SUBJECT TO THE EXECUTIVE’S SUBMISSION TO AND SATISFACTION OF ANY
REQUIRED MEDICAL EXAMS OR DISCLOSURES REQUIRED BY THE APPLICABLE INSURER AND THE
TERMS AND CONDITIONS OF THE APPLICABLE INSURANCE POLICY.

 

(IV)          EXPENSES.  DURING THE EMPLOYMENT TERM, THE COMPANY SHALL REIMBURSE
THE EXECUTIVE, IN ACCORDANCE WITH THE THEN PREVAILING REIMBURSEMENT PRACTICES OF
THE COMPANY, FOR ALL REASONABLE AND CUSTOMARY BUSINESS EXPENSES INCURRED BY THE
EXECUTIVE IN CONNECTION WITH HIS EMPLOYMENT BY THE COMPANY, PROVIDED, THAT THE
EXECUTIVE COMPLIES WITH THE STANDARD REPORTING AND REIMBURSEMENT POLICIES AS MAY
BE ESTABLISHED BY THE COMPANY FROM TIME TO TIME.

 

(V)           VACATION.  DURING THE EMPLOYMENT TERM, THE EXECUTIVE SHALL BE
ENTITLED TO FOUR WEEKS OF VACATION, MEASURED ON A CALENDAR YEAR BASIS.  THE
WEEKS OF VACATION ENTITLEMENT IN THE PRECEDING SENTENCE SHALL BE PRO-RATED FOR
ANY PARTIAL CALENDAR YEARS DURING THE EMPLOYMENT TERM.  THE EXECUTIVE SHALL
SCHEDULE VACATION PERIODS AT REASONABLE TIMES IN ACCORDANCE WITH THE COMPANY’S
VACATION POLICY FOR SENIOR EXECUTIVES.  THE EXECUTIVE SHALL ACCRUE AND RECEIVE
FULL COMPENSATION AND BENEFITS DURING HIS VACATION PERIODS.  UNUSED VACATION
LEAVE TIME SHALL BE FORFEITED AND SHALL NOT ENTITLE THE EXECUTIVE TO ANY
ADDITIONAL COMPENSATION AND MAY NOT BE CARRIED OVER TO A SUBSEQUENT CALENDAR
YEAR.

 

(VI)          COMPANY CAR ALLOWANCE.  DURING THE EMPLOYMENT TERM, THE COMPANY
SHALL PROVIDE THE EXECUTIVE WITH AN AUTOMOBILE ALLOWANCE OF $800.00 PER MONTH. 
THE EXECUTIVE SHALL BE RESPONSIBLE FOR ANY AND ALL TAXES IMPOSED ON SUCH
ALLOWANCE.

 

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(VII)         COUNTRY CLUB MEMBERSHIP.  DURING THE EMPLOYMENT TERM, THE COMPANY
SHALL REIMBURSE THE EXECUTIVE FOR THE INITIATION FEE AND ALL REGULAR MONTHLY
MEMBERSHIP DUES AND BUSINESS-RELATED CHARGES INCURRED BY THE EXECUTIVE IN
CONNECTION WITH HIS MEMBERSHIP AT THE KOKOMO COUNTRY CLUB.  THE EXECUTIVE AGREES
THAT HE SHALL BE RESPONSIBLE FOR ANY AND ALL TAXES IMPOSED ON THE REIMBURSEMENTS
MADE PURSUANT TO THE PRECEDING SENTENCE.

 

(VIII)        RELOCATION EXPENSES.  THE COMPANY SHALL REIMBURSE THE EXECUTIVE
FOR THE FOLLOWING COSTS, TO THE EXTENT INCURRED BY THE EXECUTIVE, RESULTING FROM
HIS RELOCATION FROM AVON LAKE, OHIO TO THE KOKOMO, INDIANA AREA: (I) ACTUAL AND
REASONABLE COSTS INCURRED IN MOVING PERSONAL BELONGINGS, AND (II) REAL ESTATE
COMMISSIONS INCURRED IN BOTH THE SALE OF HIS CURRENT PRIMARY RESIDENCE (“CURRENT
RESIDENCE”) AND THE ACQUISITION OF A PRIMARY RESIDENCE IN OR AROUND KOKOMO,
INDIANA (“NEW RESIDENCE”) (COLLECTIVELY, THE “RELOCATION REIMBURSEMENT”).

 

(IX)           ANNUAL PHYSICAL.  THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE AN
ANNUAL EXECUTIVE PHYSICAL EXAMINATION TO BE PROVIDED BY THE COMPANY AT NO COST
TO THE EXECUTIVE.

 

(E)           TERMINATION OF EMPLOYMENT.  SUBJECT TO THE TERMS OF
SECTION 1(F) BELOW, THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY MAY BE TERMINATED
AS FOLLOWS:

 

(I)            TERMINATION UPON THE EXPIRATION OF THE EMPLOYMENT TERM.  PROVIDED
THAT THE WRITTEN NOTICE OF NON-RENEWAL IS TIMELY PROVIDED PURSUANT TO
SECTION 1(C), THE EXECUTIVE’S EMPLOYMENT SHALL TERMINATE UPON THE EXPIRATION OF
THE EMPLOYMENT TERM UNLESS TERMINATED EARLIER PURSUANT TO THIS SECTION 1(E).  IN
THE EVENT THAT THE EXECUTIVE’S EMPLOYMENT TERMINATES UPON THE EXPIRATION OF THE
EMPLOYMENT TERM, THEN THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE THE
COMPENSATION AND BENEFITS SET FORTH IN SECTION 1(F)(I).

 

(II)           TERMINATION FOR CAUSE.  THE COMPANY MAY IMMEDIATELY TERMINATE, AT
ANY TIME, THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY FOR “CAUSE”.  A TERMINATION
FOR “CAUSE” MEANS A TERMINATION BY REASON OF THE BOARD’S GOOD FAITH
DETERMINATION THAT THE EXECUTIVE (I) CONTINUALLY FAILED TO SUBSTANTIALLY PERFORM
HIS DUTIES WITH THE COMPANY (OTHER THAN A FAILURE RESULTING FROM THE EXECUTIVE’S
MEDICALLY DOCUMENTED INCAPACITY DUE TO PHYSICAL OR MENTAL ILLNESS) INCLUDING,
WITHOUT LIMITATION, REPEATED REFUSAL TO FOLLOW THE REASONABLE DIRECTIONS OF THE
BOARD, KNOWING VIOLATION OF THE LAW IN THE COURSE OF PERFORMANCE OF THE
EXECUTIVE’S DUTIES WITH THE COMPANY, REPEATED ABSENCES FROM WORK WITHOUT A
REASONABLE EXCUSE, OR INTOXICATION WITH ALCOHOL OR ILLEGAL DRUGS WHILE ON THE
COMPANY’S PREMISES DURING REGULAR BUSINESS HOURS, (II) ENGAGED IN CONDUCT WHICH
CONSTITUTED A MATERIAL BREACH OF SECTION 2 OR SECTION 3 OF THIS AGREEMENT,
(III) WAS INDICTED (OR EQUIVALENT UNDER APPLICABLE LAW), CONVICTED OF, OR
ENTERED A PLEA OF NOLO CONTENDERE TO THE COMMISSION OF A FELONY OR CRIME
INVOLVING DISHONESTY OR MORAL TURPITUDE, (IV) ENGAGED IN CONDUCT WHICH IS
DEMONSTRABLY AND MATERIALLY INJURIOUS TO THE FINANCIAL CONDITION, BUSINESS
REPUTATION, OR OTHERWISE OF THE COMPANY OR ITS SUBSIDIARIES OR AFFILIATES, OR
(V) PERPETUATED A FRAUD OR

 

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EMBEZZLEMENT AGAINST THE COMPANY OR ITS SUBSIDIARIES OR AFFILIATES, AND IN EACH
CASE THE PARTICULAR ACT OR OMISSION WAS NOT CURED, IF CURABLE, IN ALL MATERIAL
RESPECTS BY THE EXECUTIVE WITHIN 15 DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM
THE BOARD WHICH SHALL SET FORTH IN REASONABLE DETAIL THE NATURE OF THE FACTS AND
CIRCUMSTANCES WHICH CONSTITUTE CAUSE.  NOTWITHSTANDING THE FOREGOING, THE
EXECUTIVE SHALL NOT BE DEEMED TO HAVE BEEN TERMINATED FOR CAUSE UNLESS THERE
SHALL HAVE BEEN DELIVERED TO THE EXECUTIVE A COPY OF A RESOLUTION DULY ADOPTED
BY THE BOARD.  IF THE COMPANY HAS REASONABLE BELIEF THAT THE EXECUTIVE HAS
COMMITTED ANY OF THE ACTS DESCRIBED ABOVE, IT MAY SUSPEND THE EXECUTIVE (WITH OR
WITHOUT PAY) WHILE IT INVESTIGATES WHETHER IT HAS OR COULD HAVE CAUSE TO
TERMINATE THE EXECUTIVE.  THE COMPANY MAY TERMINATE THE EXECUTIVE FOR CAUSE
PRIOR TO THE COMPLETION OF ITS INVESTIGATION; PROVIDED, THAT, IF IT IS
ULTIMATELY DETERMINED THAT THE EXECUTIVE HAS NOT COMMITTED AN ACT WHICH WOULD
CONSTITUTE CAUSE, THE EXECUTIVE SHALL BE TREATED AS IF HE WERE TERMINATED
WITHOUT CAUSE.

 

(III)          TERMINATION WITHOUT CAUSE.  THE COMPANY, MAY, AT ANY TIME,
TERMINATE THE EXECUTIVE’S EMPLOYMENT BY COMPANY WITHOUT CAUSE BY PROVIDING PRIOR
WRITTEN NOTICE THEREOF TO THE EXECUTIVE.

 

(IV)          RESIGNATION FOR GOOD REASON.  THE EXECUTIVE MAY TERMINATE HIS
EMPLOYMENT BY THE COMPANY FOR GOOD REASON (AS DEFINED BELOW) BY PROVIDING
WRITTEN NOTICE THEREOF TO THE COMPANY (THE “RESIGNATION NOTICE”) AT LEAST
45 DAYS PRIOR TO THE EFFECTIVE DATE OF THE RESIGNATION, WHICH NOTICE SHALL SET
FORTH IN REASONABLE DETAIL THE NATURE OF THE FACTS AND CIRCUMSTANCES WHICH
CONSTITUTE GOOD REASON AND THE COMPANY SHALL HAVE 30 DAYS AFTER RECEIPT OF THE
RESIGNATION NOTICE TO CURE IN ALL MATERIAL RESPECTS THE FACTS AND CIRCUMSTANCES
WHICH CONSTITUTE GOOD REASON.  FOR PURPOSES OF THIS AGREEMENT, “GOOD REASON”
SHALL MEAN THE OCCURRENCE, DURING THE EMPLOYMENT TERM, OF ANY OF THE FOLLOWING
ACTIONS OR FAILURES TO ACT, BUT IN EACH CASE ONLY IF IT IS NOT CONSENTED TO BY
THE EXECUTIVE IN WRITING: (A) A MATERIAL ADVERSE CHANGE IN THE EXECUTIVE’S
DUTIES, REPORTING RESPONSIBILITIES, TITLES OR ELECTED OR APPOINTED OFFICES AS IN
EFFECT IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF SUCH CHANGE; (B) A MATERIAL
REDUCTION BY THE COMPANY IN THE EXECUTIVE’S ANNUAL SALARY OR ANNUAL BONUS
OPPORTUNITY IN EFFECT IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF SUCH REDUCTION,
NOT INCLUDING ANY REDUCTION RESULTING FROM CHANGES IN THE MARKET VALUE OF
SECURITIES OR OTHER INSTRUMENTS PAID OR PAYABLE TO THE EXECUTIVE; OR (C) ANY
CHANGE OF MORE THAN 50 MILES IN THE LOCATION OF THE PRINCIPAL PLACE OF
EMPLOYMENT OF THE EXECUTIVE IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF SUCH
CHANGE.  FOR PURPOSES OF THIS DEFINITION, NONE OF THE ACTIONS DESCRIBED IN
CLAUSES (A) AND (B) ABOVE SHALL CONSTITUTE “GOOD REASON” WITH RESPECT TO THE
EXECUTIVE IF IT WAS AN ISOLATED AND INADVERTENT ACTION NOT TAKEN IN BAD FAITH BY
THE COMPANY AND IF IT IS REMEDIED BY THE COMPANY WITHIN 30 DAYS AFTER RECEIPT OF
WRITTEN NOTICE THEREOF GIVEN BY THE EXECUTIVE (OR, IF THE MATTER IS NOT CAPABLE
OF REMEDY WITHIN 30 DAYS, THEN WITHIN A REASONABLE PERIOD OF TIME FOLLOWING SUCH
30-DAY PERIOD, PROVIDED THAT THE COMPANY HAS COMMENCED SUCH REMEDY WITHIN SAID
30-DAY PERIOD); PROVIDED THAT “GOOD REASON” SHALL CEASE TO EXIST FOR ANY ACTION
DESCRIBED IN CLAUSES (A) AND (B) ABOVE ON THE 60TH DAY FOLLOWING THE LATER OF

 

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THE OCCURRENCE OF SUCH ACTION OR THE EXECUTIVE’S KNOWLEDGE THEREOF, UNLESS THE
EXECUTIVE HAS GIVEN THE COMPANY WRITTEN NOTICE THEREOF PRIOR TO SUCH DATE.

 

(V)           RESIGNATION WITHOUT GOOD REASON.  THE EXECUTIVE MAY, AT ANY TIME,
TERMINATE THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY WITHOUT GOOD REASON BY
PROVIDING 30 DAYS’ PRIOR WRITTEN NOTICE THEREOF TO THE COMPANY.

 

(VI)          DEATH OR DISABILITY.  THE EXECUTIVE’S EMPLOYMENT SHALL TERMINATE
IMMEDIATELY UPON THE EXECUTIVE’S DEATH OR DISABILITY (EACH AS DEFINED BELOW). 
FOR PURPOSES OF THIS AGREEMENT, “DISABILITY” MEANS THE EXECUTIVE IS TOTALLY AND
PERMANENTLY DISABLED WITHIN THE MEANING OF THE COMPANY’S LONG-TERM DISABILITY
PLAN OR POLICY UNDER WHICH THE EXECUTIVE IS A PARTICIPANT.

 

(VII)         NOTWITHSTANDING ANY PROVISION HEREIN TO THE CONTRARY, NO
TERMINATION OF EMPLOYMENT WITH THE COMPANY SHALL BE DEEMED TO OCCUR UNLESS AND
UNTIL THE EXECUTIVE HAS INCURRED SEPARATION FROM SERVICE FROM THE COMPANY WITHIN
THE MEANING OF CODE SECTION 409A(A)(2)(A)(I).

 

(F)            EFFECT OF TERMINATION.  THE FOLLOWING PROVISIONS SHALL APPLY IN
THE EVENT OF THE EXECUTIVE’S TERMINATION OF EMPLOYMENT.

 

(I)            TERMINATION UPON THE EXPIRATION OF THE EMPLOYMENT TERM.  UPON THE
TERMINATION OF THE EXECUTIVE’S EMPLOYMENT PURSUANT TO SECTION 1(E)(I), THE
EXECUTIVE WILL BE ENTITLED TO (A) PAYMENT OF THAT PORTION OF THE EXECUTIVE’S
THEN EFFECTIVE ANNUAL SALARY WHICH HAS BEEN EARNED BUT NOT YET PAID THROUGH AND
INCLUDING THE LAST DAY OF THE EXECUTIVE’S EMPLOYMENT (THE “TERMINATION DATE”);
(B) PAYMENT OF ANY BONUS EARNED BY THE EXECUTIVE UNDER THE TERMS AND CONDITIONS
OF THIS AGREEMENT PRIOR TO THE TERMINATION DATE THAT REMAINS UNPAID;
(C) REIMBURSEMENT OF ANY REIMBURSABLE BUSINESS EXPENSES UNDER SECTION 1(D)(IV),
WHICH WERE INCURRED BY THE EXECUTIVE THROUGH AND INCLUDING THE TERMINATION DATE;
AND (D) CONTINUATION OF BENEFITS TO WHICH THE EXECUTIVE IS ENTITLED UNDER
SECTION 1(D)(III) THROUGH AND INCLUDING THE TERMINATION DATE (COLLECTIVELY, THE
“ACCRUED BENEFITS”).

 

(II)           TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON.  UPON
THE COMPANY’S TERMINATION OF THE EXECUTIVE’S EMPLOYMENT FOR CAUSE PURSUANT TO
SECTION 1(E)(II) OR THE EXECUTIVE’S RESIGNATION WITHOUT GOOD REASON PURSUANT TO
SECTION 1(E)(V), EXECUTIVE WILL BE ENTITLED TO THE ACCRUED BENEFITS.

 

(III)          TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON PRIOR TO
OR MORE THAN 24 MONTHS AFTER A CHANGE IN CONTROL.

 

(A)          EXCEPT AS PROVIDED IN SECTION 1(F)(IV), BELOW, UPON THE TERMINATION
OF THE EXECUTIVE’S EMPLOYMENT PRIOR TO OR MORE THAN 24 MONTHS AFTER A CHANGE IN
CONTROL (AS DEFINED BELOW) (I) BY THE COMPANY WITHOUT CAUSE PURSUANT TO
SECTION 1(E)(III) OR (II) RESULTING FROM THE EXECUTIVE’S RESIGNATION FOR GOOD
REASON PURSUANT TO SECTION 1(E)(IV), THE EXECUTIVE SHALL BE ENTITLED TO RECEIVE
(X) THE ACCRUED BENEFITS, (Y) THE CONTINUATION

 

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OF THE EXECUTIVE’S ANNUAL SALARY AS IN EFFECT IMMEDIATELY PRIOR TO SUCH
TERMINATION DATE THROUGH THE END OF THE THEN CURRENT EMPLOYMENT TERM (WITHOUT
ANY FURTHER EXTENSIONS) (“SEVERANCE BENEFIT”), PAYABLE IN ACCORDANCE WITH THE
THEN PREVAILING PAYROLL PRACTICES OF THE COMPANY, COMMENCING NO LATER THAN THE
FIFTH BUSINESS DAY FOLLOWING THE RELEASE EFFECTIVE DATE, AND ENDING ON LAST DAY
OF THE THEN CURRENT EMPLOYMENT TERM (WITHOUT ANY FURTHER EXTENSIONS), AND
(Z) PROVIDED THAT THE EXECUTIVE IS NOT ENTITLED TO A BONUS FOR THE SAME PERIOD
OR FISCAL YEAR AS PART OF HIS ACCRUED BENEFITS, A PRO-RATED PORTION (EQUAL TO A
FRACTION, THE NUMERATOR OF WHICH BEING THE NUMBER OF WHOLE MONTHS IN WHICH THE
EXECUTIVE ACTUALLY PERFORMED SERVICES FOR THE COMPANY DURING SUCH FISCAL YEAR,
AND THE DENOMINATOR BEING TWELVE MONTHS) OF THE EXECUTIVE’S TARGET BONUS THAT
WOULD HAVE OTHERWISE BEEN PAYABLE FOR THE COMPANY’S FISCAL YEAR IN WHICH THE
EFFECTIVE DATE OF EXECUTIVE’S TERMINATION OF EMPLOYMENT OCCURS.  FOR EXAMPLE,
AND PROVIDED THAT HE OTHERWISE SATISFIES THE TERMS AND CONDITIONS OF THIS
AGREEMENT, UPON THE TERMINATION OF THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY
WITHOUT CAUSE TWELVE MONTHS PRIOR TO THE EXPIRATION OF THE INITIAL EMPLOYMENT
TERM, THE EXECUTIVE SHALL BE ENTITLED TO (I) THE ACCRUED BENEFITS, (II) A
SEVERANCE BENEFIT EQUAL TO TWELVE MONTHS OF ANNUAL SALARY CONTINUATION THROUGH
THE LAST DAY OF THE INITIAL EMPLOYMENT TERM AND (III) A PRO-RATED TARGET BONUS
(TO THE EXTENT THAT HIS IS NOT OTHERWISE ENTITLED TO A BONUS FOR THE SAME PERIOD
AS OF THE EFFECTIVE DATE OF HIS TERMINATION).

 

(B)           ALL OUTSTANDING COMPANY STOCK OPTIONS AS OF THE EFFECTIVE DATE OF
SUCH TERMINATION OF EMPLOYMENT, TO THE EXTENT THEN VESTED AND EXERCISABLE, SHALL
REMAIN EXERCISABLE AFTER SUCH TERMINATION FOR A PERIOD EQUAL TO THE LESSER OF
(I) SIX MONTHS FOLLOWING THE RELEASE EFFECTIVE DATE, OR (II) THE EXPIRATION OF
THE ORIGINAL EXERCISE PERIOD OF SUCH OPTIONS (NOT TO EXCEED TEN YEARS).

 

(IV)          TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON WITHIN 24
MONTHS AFTER A CHANGE IN CONTROL.

 

(A)          UPON THE TERMINATION OF THE EXECUTIVE’S EMPLOYMENT (I) EITHER BY
THE COMPANY WITHOUT CAUSE PURSUANT TO SECTION 1(E)(III) OR RESULTING FROM THE
EXECUTIVE’S RESIGNATION FOR GOOD REASON PURSUANT TO SECTION 1(E)(IV), AND
(II) WITHIN THE 24 MONTH PERIOD FOLLOWING A CHANGE IN CONTROL, THE EXECUTIVE
SHALL BE ENTITLED TO RECEIVE THE ACCRUED BENEFITS AND A CASH PAYMENT EQUAL TO
THREE TIMES THE EXECUTIVE’S ANNUAL SALARY AS IN EFFECT IMMEDIATELY PRIOR TO SUCH
TERMINATION DATE (“CIC SEVERANCE BENEFIT”), PAYABLE IN EQUAL MONTHLY
INSTALLMENTS OF ONE-TWELFTH (1/12) OF THE CIC SEVERANCE BENEFIT, COMMENCING
FOLLOWING THE TERMINATION DATE AND NO LATER THAN THE FIFTH BUSINESS DAY
FOLLOWING THE RELEASE EFFECTIVE DATE, AND ENDING WITH THE TWELFTH PAYMENT OF
SUCH AMOUNT.

 

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(B)           ALL OUTSTANDING COMPANY STOCK OPTIONS AS OF THE EFFECTIVE DATE OF
SUCH TERMINATION OF EMPLOYMENT, TO THE EXTENT NOT PREVIOUSLY VESTED AND
EXERCISABLE, SHALL BECOME VESTED AND EXERCISABLE UPON THE EXECUTIVE’S RELEASE
EFFECTIVE DATE AND SHALL REMAIN EXERCISABLE AFTER SUCH TERMINATION FOR A PERIOD
EQUAL TO THE LESSER OF (I) SIX MONTHS FOLLOWING THE RELEASE EFFECTIVE DATE, OR
(II) THE EXPIRATION OF THE ORIGINAL EXERCISE PERIOD OF SUCH OPTIONS (NOT TO
EXCEED TEN YEARS).

 

(V)           DEFINITION OF CHANGE IN CONTROL.  “CHANGE IN CONTROL” SHALL MEAN
THE FIRST TO OCCUR OF THE FOLLOWING: (I) ANY PERSON BECOMES THE BENEFICIAL OWNER
(AS DEFINED IN RULE 13D-3 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED), DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE COMPANY REPRESENTING A
MAJORITY OF THE COMBINED VOTING POWER OF THE COMPANY’S THEN OUTSTANDING
SECURITIES (ASSUMING CONVERSION OF ALL OUTSTANDING NON-VOTING SECURITIES INTO
VOTING SECURITIES AND THE EXERCISE OF ALL OUTSTANDING OPTIONS OR OTHER
CONVERTIBLE SECURITIES); (II) THE FOLLOWING INDIVIDUALS CEASE FOR ANY REASON TO
CONSTITUTE A MAJORITY OF THE NUMBER OF DIRECTORS THEN SERVING: INDIVIDUALS WHO,
ON THE EFFECTIVE DATE, CONSTITUTE THE BOARD AND ANY NEW DIRECTOR (OTHER THAN A
DIRECTOR WHOSE INITIAL ASSUMPTION OF OFFICE IS IN CONNECTION WITH AN ACTUAL OR
THREATENED ELECTION CONTEST, INCLUDING BUT NOT LIMITED TO A CONSENT
SOLICITATION, RELATING TO THE ELECTION OF DIRECTORS OF THE COMPANY) WHOSE
APPOINTMENT OR ELECTION BY THE BOARD OR NOMINATION FOR ELECTION BY THE COMPANY’S
STOCKHOLDERS WAS APPROVED OR RECOMMENDED BY A VOTE OF AT LEAST TWO-THIRDS (2/3)
OF THE DIRECTORS THEN STILL IN OFFICE WHO EITHER WERE DIRECTORS ON THE EFFECTIVE
DATE OR WHOSE APPOINTMENT, ELECTION OR NOMINATION FOR ELECTION WAS PREVIOUSLY SO
APPROVED OR RECOMMENDED; (III) THERE IS CONSUMMATED A MERGER OR CONSOLIDATION OF
THE COMPANY OR ANY DIRECT OR INDIRECT SUBSIDIARY OF THE COMPANY WITH ANY OTHER
CORPORATION OTHER THAN (X) A MERGER OR CONSOLIDATION WHICH WOULD RESULT IN THE
VOTING SECURITIES OF THE COMPANY OUTSTANDING IMMEDIATELY PRIOR TO SUCH MERGER OR
CONSOLIDATION CONTINUING TO REPRESENT, EITHER BY REMAINING OUTSTANDING OR BY
BEING CONVERTED INTO VOTING SECURITIES OF THE SURVIVING ENTITY OR ANY PARENT
THEREOF, A MAJORITY OF THE COMBINED VOTING POWER OF THE SECURITIES OF THE
COMPANY OR SUCH SURVIVING ENTITY OR ANY PARENT THEREOF OUTSTANDING IMMEDIATELY
AFTER SUCH MERGER OR CONSOLIDATION, OR (Y) A MERGER OR CONSOLIDATION EFFECTED TO
IMPLEMENT A RECAPITALIZATION OF THE COMPANY (OR SIMILAR TRANSACTION) IN WHICH NO
PERSON, IS OR BECOMES THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF
SECURITIES OF THE COMPANY REPRESENTING A MAJORITY OF THE COMBINED VOTING POWER
OF THE COMPANY’S THEN OUTSTANDING SECURITIES; OR (AS DEFINED IN RULE 13D-3 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED); (IV) THE STOCKHOLDERS OF THE
COMPANY APPROVE A PLAN OF COMPLETE LIQUIDATION OR DISSOLUTION OF THE COMPANY OR
THERE IS CONSUMMATED AN AGREEMENT FOR THE SALE OR DISPOSITION BY THE COMPANY OF
ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS, OR TO AN ENTITY A MAJORITY OF
THE COMBINED VOTING POWER OF THE VOTING SECURITIES OF WHICH IS OWNED BY
SUBSTANTIALLY ALL OF THE STOCKHOLDERS OF THE COMPANY IMMEDIATELY PRIOR TO SUCH
SALE IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR OWNERSHIP OF THE COMPANY
IMMEDIATELY PRIOR TO SUCH SALE.  FOR PURPOSES OF THIS DEFINITION, “PERSON” SHALL
HAVE THE MEANING GIVEN IN SECTION 3(A)(9) OF THE SECURITIES EXCHANGE ACT OF
1934, AS MODIFIED AND USED IN SECTIONS 13(D) AND

 

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14(D) THEREOF, EXCEPT THAT SUCH TERM SHALL NOT INCLUDE (1) THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY, (2) A TRUSTEE OR OTHER FIDUCIARY HOLDING SECURITIES
UNDER AN EMPLOYEE BENEFIT PLAN OF THE COMPANY OR ANY OF ITS AFFILIATES, (3) AN
UNDERWRITER TEMPORARILY HOLDING SECURITIES PURSUANT TO AN OFFERING OF SUCH
SECURITIES OR (4) A CORPORATION OWNED, DIRECTLY OR INDIRECTLY, BY SUBSTANTIALLY
ALL OF THE STOCKHOLDERS OF THE COMPANY IN SUBSTANTIALLY THE SAME PROPORTIONS AS
THEIR OWNERSHIP OF STOCK OF THE COMPANY.

 

(VI)          LIMITATION.  NOTWITHSTANDING ANY PROVISION OF THIS SECTION TO THE
CONTRARY, THE COMPANY SHALL NOT BE OBLIGATED TO MAKE A PAYMENT PURSUANT TO
SECTION 1(F)(IV) HEREOF TO THE EXTENT THAT SUCH PAYMENT, WHEN COMBINED WITH
OTHER PAYMENTS MADE BY THE EMPLOYER WITH RESPECT TO THE EXECUTIVE ON ACCOUNT OF
A CHANGE IN CONTROL, WOULD RESULT IN THE IMPOSITION OF AN EXCISE TAX UNDER CODE
SECTION 4999.  TO THE EXTENT REQUIRED BY THE PRECEDING SENTENCE, THE COMPANY
SHALL REDUCE THE AMOUNT PAYABLE HEREUNDER TO THE MAXIMUM AMOUNT, AS DETERMINED
BY THE BOARD IN ITS REASONABLE JUDGMENT, THAT CAN BE PAID WITHOUT RESULTING IN
THE IMPOSITION OF AN EXCISE TAX UNDER CODE SECTION 4999.

 

(VII)         DEATH OR DISABILITY.  UPON TERMINATION OF THE EXECUTIVE’S
EMPLOYMENT PURSUANT TO SECTION 1(E)(VI), THE EXECUTIVE OR THE EXECUTIVE’S HEIRS,
ESTATE, PERSONAL REPRESENTATIVE OR LEGAL GUARDIAN, AS APPROPRIATE, WILL BE
ENTITLED TO RECEIVE THE ACCRUED BENEFITS.

 

(VIII)        TIMING OF PAYMENT AND RELEASE.  AS A CONDITION OF RECEIVING FROM
THE COMPANY THE PAYMENTS AND BENEFITS PROVIDED FOR UNDER THIS SECTION 1(F) WHICH
THE EXECUTIVE OTHERWISE WOULD NOT BE ENTITLED TO RECEIVE, THE EXECUTIVE
UNDERSTANDS AND AGREES THAT, ON THE TERMINATION DATE, HE WILL BE REQUIRED TO
EXECUTE (AND NOT REVOKE) A RELEASE OF ALL CLAIMS AGAINST THE COMPANY IN
SUBSTANTIALLY THE FORM ATTACHED HERETO AS EXHIBIT A (THE “RELEASE”) AS MAY BE
MODIFIED BY THE COMPANY IN GOOD FAITH TO REFLECT CHANGES IN LAW OR ITS
EMPLOYMENT PRACTICES.  THE EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN ADVISED IN
WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THE RELEASE.  THE
EXECUTIVE AGREES THAT HE WILL CONSULT WITH HIS ATTORNEY PRIOR TO EXECUTING THE
RELEASE.  THE EXECUTIVE AND THE COMPANY AGREE THAT THE EXECUTIVE HAS A PERIOD OF
SEVEN DAYS FOLLOWING THE EXECUTION OF THE RELEASE WITHIN WHICH TO REVOKE THE
RELEASE.  THE PARTIES ALSO ACKNOWLEDGE AND AGREE THAT THE RELEASE SHALL NOT BE
EFFECTIVE OR ENFORCEABLE UNTIL THE SEVEN-DAY REVOCATION PERIOD EXPIRES.  THE
DATE ON WHICH THIS SEVEN-DAY PERIOD EXPIRES SHALL BE THE EFFECTIVE DATE OF THE
RELEASE (THE “RELEASE EFFECTIVE DATE”).  THE COMPANY SHALL MAKE ALL PAYMENTS
REQUIRED UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT THAT SUCH PAYMENTS ARE TO BE
MADE OVER TIME, WITHIN FIVE BUSINESS DAYS FOLLOWING THE RELEASE EFFECTIVE DATE. 
IN THE EVENT OF A TERMINATION FOR CAUSE OR BY REASON OF THE EXECUTIVE’S DEATH,
THE COMPANY SHALL MAKE ANY PAYMENTS UNDER THIS SECTION 1(F) WITHIN FIVE
(5) BUSINESS DAYS OF THE TERMINATION DATE, EXCEPT TO THE EXTENT THAT SUCH
PAYMENTS ARE TO BE MADE OVER TIME.  THE EXECUTIVE UNDERSTANDS THAT AS USED IN
THIS SECTION 1(F)(IV), THE “COMPANY” INCLUDES ITS PAST, PRESENT AND FUTURE
OFFICERS, DIRECTORS, TRUSTEES, SHAREHOLDERS, EMPLOYEES, AGENTS, SUBSIDIARIES,
AFFILIATES, DISTRIBUTORS, SUCCESSORS,

 

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AND ASSIGNS, ANY AND ALL EMPLOYEE BENEFIT PLANS (AND ANY FIDUCIARY OF SUCH
PLANS) SPONSORED BY THE COMPANY, AND ANY OTHER PERSON RELATED TO THE COMPANY.

 

Notwithstanding the preceding provisions of this Section 1(f), if the Executive
is a “specified employee” within the meaning of Code Section 409A(a)(2)(B)(i),
to the extent required by such Code Section, payments otherwise required by this
Section shall be delayed to the earliest date on which such payments are
permitted.

 

Except as specifically provided in this Section 1(f) or required under
applicable law, the Executive will not be eligible to receive any salary, bonus
or other compensation or benefits described in Section 1(d) with respect to any
periods after the Termination Date; provided, however, the Executive shall have
the right to receive all compensation and benefits to which he is entitled under
any benefit plans of the Company to the extent he is fully vested as of the
effective date of the termination of the Executive’s employment by the Company
pursuant to the terms and conditions of such employee benefit plans.

 

SECTION 2.           CONFIDENTIALITY.

 

For purposes of this Section 2, the term “Company” shall include, in addition to
the Company, its affiliates, subsidiaries and any of their respective
predecessors, successors and assigns.  The term “Company’s Business” shall mean
the business of developing, manufacturing, selling or distributing
high-performance alloys for service in severe corrosion and high temperature
applications.

 

(A)           CONFIDENTIAL INFORMATION.  AS USED IN THIS AGREEMENT,
“CONFIDENTIAL INFORMATION” MEANS ANY AND ALL CONFIDENTIAL, PROPRIETARY OR OTHER
INFORMATION, WHETHER OR NOT ORIGINATED BY THE EXECUTIVE OR THE COMPANY, WHICH IS
IN ANY WAY RELATED TO THE PAST OR PRESENT COMPANY’S BUSINESS AND IS EITHER
DESIGNATED AS CONFIDENTIAL OR NOT GENERALLY KNOWN BY OR AVAILABLE TO THE
PUBLIC.  CONFIDENTIAL INFORMATION INCLUDES, BUT IS NOT LIMITED TO (WHETHER OR
NOT REDUCED TO WRITING OR DESIGNATED AS CONFIDENTIAL) (I) INFORMATION REGARDING
THE COMPANY’S EXISTING AND POTENTIAL CUSTOMERS AND VENDORS; (II) ANY CONTRACTS
(INCLUDING THE EXISTENCE AND CONTENTS THEREOF AND PARTIES THERETO) TO WHICH THE
COMPANY IS A PARTY OR IS OTHERWISE BOUND; (III) INFORMATION REGARDING PRODUCTS
AND SERVICES BEING PURCHASED OR LEASED BY OR PROVIDED TO THE COMPANY;
(IV) INFORMATION RECEIVED BY THE COMPANY FROM THIRD PARTIES UNDER AN OBLIGATION
OF CONFIDENTIALITY, RESTRICTED DISCLOSURE OR RESTRICTED USE; (V) PERSONNEL AND
FINANCIAL INFORMATION OF THE COMPANY; (VI) INFORMATION WITH RESPECT TO THE
COMPANY’S PRODUCTS, SERVICES, FACILITIES, BUSINESS METHODS, SYSTEMS, TRADE
SECRETS, TECHNICAL KNOW-HOW, AND OTHER INTELLECTUAL PROPERTY; (VII) MARKETING
AND DEVELOPMENTAL PLANS AND TECHNIQUES, PRICE AND COST DATA, FORECASTS AND
FORECAST ASSUMPTIONS, AND POTENTIAL STRATEGIES OF THE COMPANY;
(VIII) INFORMATION ABOUT THE COMPANY’S CUSTOMERS, SUCH AS CONTACTS, CRITERIA,
REQUIREMENTS, SPECIFICATIONS, PRICING, OR OTHER SIMILAR INFORMATION; AND
(IX) ANY OTHER INFORMATION RELATING TO THE COMPANY WHICH WAS OBTAINED BY THE
EXECUTIVE IN CONNECTION WITH HIS EMPLOYMENT BY THE COMPANY, WHETHER BEFORE, ON
OR AFTER THE EFFECTIVE DATE.

 

(B)           NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION.  THE
EXECUTIVE ACKNOWLEDGES THAT THE CONFIDENTIAL INFORMATION OF THE COMPANY IS A
VALUABLE, UNIQUE ASSET OF THE COMPANY AND THE EXECUTIVE’S UNAUTHORIZED USE OR
DISCLOSURE THEREOF WOULD CAUSE IRREPARABLE

 

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HARM TO THE COMPANY FOR WHICH NO REMEDY AT LAW COULD BE ADEQUATE.  ACCORDINGLY,
THE EXECUTIVE AGREES THAT HE SHALL HOLD ALL CONFIDENTIAL INFORMATION OF THE
COMPANY IN STRICT CONFIDENCE AND SOLELY FOR THE BENEFIT OF THE COMPANY, AND THAT
HE SHALL NOT, DIRECTLY OR INDIRECTLY, DISCLOSE OR USE OR AUTHORIZE ANY THIRD
PARTY TO DISCLOSE OR USE ANY CONFIDENTIAL INFORMATION EXCEPT (I) AS REQUIRED FOR
THE PERFORMANCE OF THE EXECUTIVE’S DUTIES HEREUNDER, (II) WITH THE EXPRESS
WRITTEN CONSENT OF THE COMPANY, (III) TO THE EXTENT THAT ANY SUCH INFORMATION IS
IN OR BECOMES IN THE PUBLIC DOMAIN OTHER THAN AS A RESULT OF THE EXECUTIVE’S
BREACH OF ANY OF HIS OBLIGATIONS HEREUNDER, OR (IV) WHERE REQUIRED TO BE
DISCLOSED BY COURT ORDER, SUBPOENA OR OTHER GOVERNMENT PROCESS AND IN SUCH
EVENT, THE EXECUTIVE SHALL COOPERATE WITH THE COMPANY IN ATTEMPTING TO KEEP SUCH
INFORMATION CONFIDENTIAL.  THE EXECUTIVE SHALL FOLLOW ALL COMPANY POLICIES AND
PROCEDURES TO PROTECT ALL CONFIDENTIAL INFORMATION AND TAKE ANY ADDITIONAL
PRECAUTIONS NECESSARY TO PRESERVE AND PROTECT THE USE OR DISCLOSURE OF ANY
CONFIDENTIAL INFORMATION AT ALL TIMES.

 

(C)           OWNERSHIP OF CONFIDENTIAL INFORMATION.  THE EXECUTIVE ACKNOWLEDGES
AND AGREES THAT ALL CONFIDENTIAL INFORMATION IS AND SHALL REMAIN THE EXCLUSIVE
PROPERTY OF THE COMPANY, WHETHER OR NOT PREPARED IN WHOLE OR IN PART BY THE
EXECUTIVE AND WHETHER OR NOT DISCLOSED TO OR ENTRUSTED TO THE CUSTODY OF THE
EXECUTIVE.  UPON THE TERMINATION OR RESIGNATION OF HIS EMPLOYMENT FOR ANY
REASON, OR AT ANY OTHER TIME AT THE REQUEST OF THE COMPANY, THE EXECUTIVE SHALL
PROMPTLY DELIVER TO THE COMPANY ALL DOCUMENTS, TAPES, DISKS, OR OTHER STORAGE
MEDIA AND ANY OTHER MATERIALS, AND ALL COPIES THEREOF IN WHATEVER FORM, IN THE
POSSESSION OR CONTROL OF THE EXECUTIVE PERTAINING TO THE COMPANY’S BUSINESS,
INCLUDING, BUT NOT LIMITED TO, ANY CONTAINING CONFIDENTIAL INFORMATION.

 

(D)           SURVIVAL.  THE EXECUTIVE’S OBLIGATIONS SET FORTH IN THIS
SECTION 2, AND THE COMPANY’S RIGHTS AND REMEDIES WITH RESPECT HERETO, SHALL
INDEFINITELY SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE EXECUTIVE’S
EMPLOYMENT BY THE COMPANY, REGARDLESS OF THE REASON THEREFOR.

 

SECTION 3.           RESTRICTIVE COVENANTS.

 

For purposes of this Section 3, the term “Company” shall include, in addition to
the Company, its affiliates, subsidiaries and any of their respective
predecessors, successors and assigns.

 

(A)           NON-COMPETITION.  DURING THE RESTRICTED PERIOD AND WITHIN THE
RESTRICTED AREA (EACH AS DEFINED IN SUBSECTION (C) BELOW), THE EXECUTIVE SHALL
NOT, DIRECTLY OR INDIRECTLY, PERFORM ON BEHALF OF ANY COMPETITOR (AS DEFINED IN
SUBSECTION (C) BELOW) THE SAME OR SIMILAR SERVICES AS THOSE THAT THE EXECUTIVE
PERFORMED FOR THE COMPANY DURING THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR
OTHERWISE.  IN ADDITION, THE EXECUTIVE SHALL NOT, DURING THE RESTRICTED PERIOD
OR WITHIN THE RESTRICTED AREA, DIRECTLY OR INDIRECTLY ENGAGE IN, OWN, MANAGE,
OPERATE, JOIN, CONTROL, LEND MONEY OR OTHER ASSISTANCE TO, OR PARTICIPATE IN OR
BE CONNECTED WITH (AS AN OFFICER, DIRECTOR, MEMBER, MANAGER, PARTNER,
SHAREHOLDER, CONSULTANT, EMPLOYEE, AGENT, OR OTHERWISE), ANY COMPETITOR.

 

(B)           NON-SOLICITATION.  DURING THE RESTRICTED PERIOD, THE EXECUTIVE
SHALL NOT, DIRECTLY OR INDIRECTLY, FOR HIMSELF OR ON BEHALF OF ANY PERSON (AS
DEFINED IN SUBSECTION (C) BELOW),

 

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(I) SOLICIT OR ATTEMPT TO SOLICIT ANY CUSTOMERS (AS DEFINED IN SUBSECTION
(C) BELOW) OR PROSPECTIVE CUSTOMERS WITH WHOM THE EXECUTIVE HAD CONTACT AT ANY
TIME DURING THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY; (II) DIVERT OR ATTEMPT TO
DIVERT ANY BUSINESS OF THE COMPANY TO ANY OTHER PERSON; (III) SOLICIT OR ATTEMPT
TO SOLICIT FOR EMPLOYMENT, ENDEAVOR TO ENTICE AWAY FROM THE COMPANY, RECRUIT,
HIRE, OR OTHERWISE INTERFERE WITH THE COMPANY’S RELATIONSHIP WITH, ANY PERSON
WHO IS EMPLOYED BY OR OTHERWISE ENGAGED TO PERFORM SERVICES FOR THE COMPANY (OR
WAS EMPLOYED OR OTHERWISE ENGAGED TO PERFORM SERVICES FOR THE COMPANY, AS OF ANY
GIVEN TIME, WITHIN THE IMMEDIATELY PRECEDING 24-MONTH PERIOD); (IV) CAUSE OR
ASSIST, OR ATTEMPT TO CAUSE OR ASSIST, ANY EMPLOYEE OR OTHER SERVICE PROVIDER TO
LEAVE THE COMPANY; OR (V) OTHERWISE INTERFERE IN ANY MANNER WITH THE EMPLOYMENT
OR BUSINESS RELATIONSHIPS OF THE COMPANY OR THE BUSINESS OR OPERATIONS THEN
BEING CONDUCTED BY THE COMPANY.

 

(C)           DEFINITIONS.  FOR PURPOSES OF THIS SECTION 3, THE FOLLOWING
DEFINITIONS HAVE THE FOLLOWING MEANINGS:

 

(I)            “COMPETITOR” MEANS ANY PERSON THAT ENGAGES IN A BUSINESS THAT IS
THE SAME AS, OR SIMILAR TO, THE COMPANY’S BUSINESS.

 

(II)           “CUSTOMER” MEANS ANY PERSON WHICH, AS OF ANY GIVEN DATE, USED OR
PURCHASED OR CONTRACTED TO USE OR PURCHASE ANY SERVICES OR PRODUCTS FROM COMPANY
WITHIN THE IMMEDIATELY PRECEDING 24-MONTH PERIOD.

 

(III)          “PERSON” MEANS ANY INDIVIDUAL, OR ENTITY, INCLUDING ANY
CORPORATION, PARTNERSHIP, JOINT VENTURE, ASSOCIATION, LIMITED LIABILITY COMPANY,
LIMITED LIABILITY PARTNERSHIP, JOINT-STOCK COMPANY, TRUST OR UNINCORPORATED
ORGANIZATION, OR ANY GOVERNMENTAL AGENCY, OFFICER, DEPARTMENT, COMMISSION,
BOARD, BUREAU, OR INSTRUMENTALITY THEREOF.

 

(IV)          BECAUSE THE MARKET FOR THE COMPANY’S BUSINESS IS GLOBAL, AND IS
NOT DEPENDENT UPON THE PHYSICAL LOCATION OR PRESENCE OF THE COMPANY, THE
EXECUTIVE, OR ANY INDIVIDUAL OR ENTITY THAT MAY BE IN VIOLATION OF THIS
AGREEMENT, BECAUSE THE COMPANY DOES BUSINESS WITH CUSTOMERS AND MARKETS FOR
POTENTIAL CUSTOMERS GLOBALLY, AND BECAUSE THE COMPANY ACTIVELY MARKETS THROUGH
ITS PRESENCE ON THE WORLDWIDE WEB, THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT
THE FOLLOWING DEFINITION OF “RESTRICTED AREA” IS BOTH REASONABLE AND NECESSARY
TO PROTECT THE COMPANY’S LEGITIMATE BUSINESS INTERESTS:

 

(A)          WITHIN A 100-MILE RADIUS OF EACH OF COMPANY’S MANUFACTURING
FACILITIES, INCLUDING THOSE LOCATED IN KOKOMO, INDIANA; ARCADIA, LOUISIANA; AND
MOUNTAIN HOME, NORTH CAROLINA;

 

(B)           WITHIN A 100-MILE RADIUS OF EACH OF COMPANY’S SERVICE CENTERS AND
OFFICES, INCLUDING THOSE LOCATED IN KOKOMO, INDIANA; HOUSTON, TEXAS; ARCADIA,
LOUISIANA; WINDSOR, CONNECTICUT; LAMIRADA, CALIFORNIA; MOUNTAIN HOME, NORTH
CAROLINA; OPENSHAW, MANCHESTER, UNITED KINGDOM; CERGY PONTOISE CEDEX, FRANCE;
SINGAPORE; RESCALDA (MI), ITALY; ZURICH, SWITZERLAND; SHANGHAI, CHINA; AND
TEYNAMPET, CHENNAI, INDIA.

 

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(C)           WITHIN EACH COUNTY OR PARISH IN WHICH THE EXECUTIVE HAS PERFORMED
SERVICES FOR THE COMPANY;

 

(D)          WITHIN EACH STATE COMMONWEALTH, TERRITORY OR PROVINCE IN WHICH THE
EXECUTIVE HAS PERFORMED SERVICES FOR THE COMPANY;

 

(E)           WITHIN EACH COUNTRY IN WHICH THE EXECUTIVE HAS PERFORMED SERVICES
FOR THE COMPANY;

 

(F)           WITHIN EACH STATE, COMMONWEALTH, TERRITORY OR PROVINCE IN WHICH A
CUSTOMER IS LOCATED;

 

(G)           WITHIN EACH STATE, COMMONWEALTH, TERRITORY OR PROVINCE IN WHICH A
CUSTOMER IS LOCATED;

 

(H)          WITHIN EACH COUNTRY IN WHICH A CUSTOMER IS LOCATED;

 

(I)            THE WORLDWIDE WEB;

 

(J)            WITHIN A ONE-MILE RADIUS OF EACH CUSTOMER;

 

(K)          WITHIN EACH COUNTY OR PARISH IN WHICH A COMPETITOR IS LOCATED;

 

(L)           WITHIN EACH STATE, COMMONWEALTH, TERRITORY OR PROVINCE IN WHICH A
COMPETITOR IS LOCATED;

 

(M)         WITHIN EACH COUNTRY IN WHICH A COMPETITOR IS LOCATED;

 

(N)          WITHIN A ONE-MILE RADIUS OF EACH COMPETITOR, BOTH COMPANY AND
EXECUTIVE CONSENT TO THE APPLICATION OF THE BLUE PENCIL DOCTRINE, IF NECESSARY,
TO CONFORM THESE RESTRICTIONS TO RENDER THIS SECTION ENFORCEABLE.

 

(V)           “RESTRICTED PERIOD” MEANS THE PERIOD OF TIME DURING THE
EXECUTIVE’S EMPLOYMENT BY THE COMPANY PLUS A PERIOD OF 24 MONTHS FROM THE
TERMINATION DATE.  IN THE EVENT OF A BREACH OF THIS AGREEMENT BY THE EXECUTIVE,
THE RESTRICTED PERIOD WILL BE EXTENDED AUTOMATICALLY BY THE PERIOD OF THE
BREACH.

 

(D)           SURVIVAL.  THE EXECUTIVE’S OBLIGATIONS SET FORTH IN THIS
SECTION 3, AND THE COMPANY’S RIGHTS AND REMEDIES WITH RESPECT THERETO, WILL
REMAIN IN FULL FORCE AND EFFECT DURING THE RESTRICTED PERIOD AND UNTIL FULL
RESOLUTION OF ANY DISPUTE RELATED TO THE PERFORMANCE OF THE EXECUTIVE’S
OBLIGATIONS DURING THE RESTRICTED PERIOD.

 

(E)           PUBLIC COMPANY EXCEPTION.  THE PROHIBITIONS CONTAINED IN THIS
SECTION 3 DO NOT PROHIBIT THE EXECUTIVE’S OWNERSHIP OF STOCK WHICH IS PUBLICLY
TRADED PROVIDED THAT (1) THE INVESTMENT IS PASSIVE, (2) THE EXECUTIVE HAS NO
OTHER INVOLVEMENT WITH THE COMPANY, (3) THE EXECUTIVE’S INTEREST IS LESS THAN 5%
OF THE SHARES OF THE COMPANY, AND (4) THE EXECUTIVE MAKES FULL DISCLOSURE TO THE
COMPANY OF THE STOCK AT THE TIME THAT THE EXECUTIVE ACQUIRES THE SHARES OF
STOCK.

 

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SECTION 4.           ASSIGNMENT OF INVENTIONS.

 

Any and all inventions, improvements, discoveries, designs, works of authorship,
concepts or ideas, or expressions thereof; whether or not subject to patents,
copyrights, trademarks or service mark protections, and whether or not reduced
to practice, that are conceived or developed by the Executive while employed
with the Company and which relate to or result from the actual or anticipated
business, work, research or investigation of the Company (collectively,
“Inventions”), shall be the sole and exclusive property of the Company.  The
Executive shall do all things reasonably requested by the Company to assign to
and vest in the Company the entire right, title and interest to any such
Inventions and to obtain full protection therefor.  Notwithstanding the
foregoing, the provisions of this Agreement do not apply to an Invention for
which no equipment, supplies, facility, or  Confidential Information of the
Company was used and which was developed entirely on the Executive’s own time,
unless (a) the Invention relates (i) to the Company’s Business, or (ii) or the
Company’s actual or demonstrably anticipated research or development, or (b) the
Invention results from any work performed by the Executive for the Company.

 

SECTION 5.           GENERAL.

 

(A)           REASONABLENESS.  THE EXECUTIVE HAS CAREFULLY CONSIDERED THE
NATURE, EXTENT AND DURATION OF THE RESTRICTIONS AND OBLIGATIONS CONTAINED IN
THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE GEOGRAPHICAL COVERAGE
CONTAINED IN SECTION 3, AND THE TIME PERIODS CONTAINED IN SECTION 2 AND
SECTION 3, AND ACKNOWLEDGES AND AGREES THAT SUCH RESTRICTIONS ARE FAIR AND
REASONABLE IN ALL RESPECTS TO PROTECT THE LEGITIMATE INTERESTS OF THE COMPANY
AND THAT THESE RESTRICTIONS ARE DESIGNED FOR THE REASONABLE PROTECTION OF THE
COMPANY’S BUSINESS.

 

(B)           REMEDIES.  THE EXECUTIVE RECOGNIZES THAT ANY BREACH OF THIS
AGREEMENT SHALL CAUSE IRREPARABLE INJURY TO THE COMPANY, INADEQUATELY
COMPENSABLE IN MONETARY DAMAGES.  ACCORDINGLY, IN ADDITION TO ANY OTHER LEGAL OR
EQUITABLE REMEDIES THAT MAY BE AVAILABLE TO THE COMPANY, THE EXECUTIVE AGREES
THAT THE COMPANY SHALL BE ABLE TO SEEK AND OBTAIN INJUNCTIVE RELIEF IN THE FORM
OF A TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, OR PERMANENT
INJUNCTION, AGAINST THE EXECUTIVE TO ENFORCE THIS AGREEMENT.  THE COMPANY SHALL
NOT BE REQUIRED TO DEMONSTRATE ACTUAL INJURY OR DAMAGE TO OBTAIN INJUNCTIVE
RELIEF FROM THE COURTS.  TO THE EXTENT THAT ANY DAMAGES ARE CALCULABLE RESULTING
FROM THE BREACH OF THIS AGREEMENT, THE COMPANY SHALL ALSO BE ENTITLED TO RECOVER
DAMAGES, INCLUDING, BUT NOT LIMITED TO, ANY LOST PROFITS OF THE COMPANY AND/OR
ITS AFFILIATES OR SUBSIDIARIES.  FOR PURPOSES OF THIS AGREEMENT, LOST PROFITS OF
THE COMPANY SHALL BE DEEMED TO INCLUDE ALL GROSS REVENUES RESULTING FROM ANY
ACTIVITY OF THE EXECUTIVE IN VIOLATION OF THIS AGREEMENT AND ALL SUCH REVENUES
SHALL BE HELD IN TRUST FOR THE BENEFIT OF THE COMPANY.  ANY RECOVERY OF DAMAGES
BY THE COMPANY SHALL BE IN ADDITION TO AND NOT IN LIEU OF THE INJUNCTIVE RELIEF
TO WHICH THE COMPANY IS ENTITLED.  IN NO EVENT WILL A DAMAGE RECOVERY BE
CONSIDERED A PENALTY IN LIQUIDATED DAMAGES.  IN ADDITION, THE COMPANY SHALL BE
ENTITLED TO RECOVER FROM EXECUTIVE ALL COSTS, EXPENSES AND REASONABLE ATTORNEYS’
FEES INCURRED BY THE COMPANY IN SEEKING ENFORCEMENT OF THIS AGREEMENT OR DAMAGES
FOR ITS BREACH, OR IN DEFENDING ANY ACTION BROUGHT BY EXECUTIVE TO CHALLENGE OR
CONSTRUE THE TERMS OF THE AGREEMENT.  WITHOUT LIMITING THE COMPANY’S RIGHTS
UNDER THIS SECTION 5(B) OR ANY OTHER REMEDIES OF THE COMPANY, IF A COURT OF
COMPETENT JURISDICTION DETERMINES AT ANY STAGE OF THE PROCEEDINGS, INCLUDING IN
A TEMPORARY RESTRAINING ORDER OR PRELIMINARY INJUNCTION, THAT THE EXECUTIVE
BREACHED ANY OF THE

 

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PROVISIONS OF SECTION 2 OR SECTION 3, COMPANY WILL HAVE THE RIGHT TO CEASE
MAKING ANY PAYMENTS OR PROVIDING ANY BENEFITS OTHERWISE DUE TO THE EXECUTIVE
UNDER THE TERMS AND CONDITIONS OF THIS AGREEMENT.

 

(C)           CLAIMS BY EXECUTIVE.  THE EXECUTIVE ACKNOWLEDGES AND AGREES THAT
ANY CLAIM OR CAUSE OF ACTION BY THE EXECUTIVE AGAINST THE COMPANY SHALL NOT
CONSTITUTE A DEFENSE TO THE ENFORCEMENT OF THE RESTRICTIONS AND COVENANTS SET
FORTH IN THIS AGREEMENT AND SHALL NOT BE USED TO PROHIBIT INJUNCTIVE RELIEF.

 

(D)           AMENDMENTS.  THIS AGREEMENT MAY NOT BE MODIFIED, AMENDED, OR
WAIVED IN ANY MANNER EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY BOTH PARTIES
TO THIS AGREEMENT.

 

(E)           WAIVER.  THE WAIVER BY EITHER PARTY OF COMPLIANCE BY THE OTHER
PARTY WITH ANY PROVISION OF THIS AGREEMENT SHALL NOT OPERATE OR BE CONSTRUED AS
A WAIVER OF ANY OTHER PROVISION OF THIS AGREEMENT (WHETHER OR NOT SIMILAR), OR A
CONTINUING WAIVER, OR A WAIVER OF ANY SUBSEQUENT BREACH BY A PARTY OF ANY
PROVISION OF THIS AGREEMENT.

 

(F)            GOVERNING LAW; JURISDICTION.  THE LAWS OF THE STATE OF INDIANA
SHALL GOVERN THE VALIDITY, PERFORMANCE, ENFORCEMENT, INTERPRETATION, AND OTHER
ASPECTS OF THIS AGREEMENT, NOTWITHSTANDING ANY STATE’S CHOICE OF LAW PROVISIONS
TO THE CONTRARY.  THIS AGREEMENT SHALL BE CONSTRUED TO COMPLY WITH CODE
SECTION 409A OR AN EXEMPTION FROM THE APPLICATION OF SECTION 409A.  THE PARTIES
INTEND THE PROVISIONS OF THIS AGREEMENT TO SUPPLEMENT BUT NOT DISPLACE, THEIR
RESPECTIVE OBLIGATIONS AND RESPONSIBILITIES UNDER THE INDIANA UNIFORM TRADE
SECRETS ACT.  ANY PROCEEDING TO ENFORCE, INTERPRET, CHALLENGE THE VALIDITY OF,
OR RECOVER FOR THE BREACH OF ANY PROVISION OF, THIS AGREEMENT MAY BE FILED IN
THE COURTS OF THE STATE OF INDIANA OR THE UNITED STATES DISTRICT COURT SITTING
IN INDIANAPOLIS, INDIANA, AND THE PARTIES HERETO EXPRESSLY WAIVE ANY AND ALL
OBJECTIONS TO PERSONAL JURISDICTION, SERVICE OF PROCESS OR VENUE IN CONNECTION
THEREWITH.

 

(G)           COMPLETE AGREEMENT; RELEASE.  THIS AGREEMENT CONSTITUTES A
COMPLETE AND TOTAL INTEGRATION OF THE UNDERSTANDING OF THE PARTIES WITH RESPECT
TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDES ALL PRIOR OR
CONTEMPORANEOUS NEGOTIATIONS, COMMITMENTS, AGREEMENTS, WRITINGS, AND DISCUSSIONS
WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

(H)           SEVERABILITY.  IF A COURT HAVING PROPER JURISDICTION HOLDS A
PARTICULAR PROVISION OF THIS AGREEMENT UNENFORCEABLE OR INVALID FOR ANY REASON,
THAT PROVISION SHALL BE MODIFIED ONLY TO THE EXTENT NECESSARY IN THE OPINION OF
SUCH COURT TO MAKE IT ENFORCEABLE AND VALID AND THE REMAINDER OF THIS AGREEMENT
SHALL BE DEEMED VALID AND ENFORCEABLE AND SHALL BE ENFORCED TO THE GREATEST
EXTENT POSSIBLE UNDER THE THEN EXISTING LAW.  IN THE EVENT THE COURT DETERMINES
SUCH MODIFICATION IS NOT POSSIBLE, THE PROVISION SHALL BE DEEMED SEVERABLE AND
DELETED, AND ALL OTHER PROVISIONS OF THIS AGREEMENT SHALL REMAIN UNCHANGED AND
IN FULL FORCE AND EFFECT.

 

(I)            ENFORCEABILITY IN JURISDICTIONS.  THE PARTIES HERETO INTEND TO
AND HERBY CONFER JURISDICTION TO ENFORCE THE COVENANTS CONTAINED IN SECTION 2
AND 3 ABOVE UPON THE COURTS OF ANY STATE WITHIN THE GEOGRAPHICAL SCOPE OF SUCH
COVENANTS.  IF THE COURTS OF ANY ONE OR MORE OF SUCH STATES SHALL HOLD ANY OF
THE PREVIOUS COVENANTS UNENFORCEABLE BY REASON OF THE BREADTH OF SUCH SCOPE OR
OTHERWISE, IT IS THE INTENTION OF THE PARTIES HERETO THAT SUCH DETERMINATION NOT
BAR OR IN ANY WAY AFFECT THE COMPANY’S RIGHTS TO THE RELIEF PROVIDED ABOVE IN
THE COURTS OF ANY OTHER STATES

 

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WITHIN THE GEOGRAPHICAL SCOPE OF SUCH COVENANTS, AS TO BREACHES OF SUCH
COVENANTS IN SUCH OTHER RESPECTIVE JURISDICTIONS, THE ABOVE COVENANTS AS THEY
RELATE TO EACH STATE BEING, FOR THIS PURPOSE, SEVERABLE INTO DIVERSE AND
INDEPENDENT COVENANTS.

 

(J)            FAIR DEALING.  THE EXECUTIVE ACKNOWLEDGES THAT THE COMPANY HAS
NEGOTIATED THIS AGREEMENT IN GOOD FAITH AND HAS BEEN FAIR IN ITS DEALING WITH
THE EXECUTIVE.  THE EXECUTIVE SHALL NOT RAISE ANY DEFENSE AND EXPRESSLY WAIVES
ANY DEFENSE AGAINST THE COMPANY BASED UPON ANY ALLEGED BREACH OF GOOD FAITH OR
FAIR DEALING BY THE COMPANY IN CONNECTION WITH THIS AGREEMENT.

 

(K)           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN TWO COUNTERPARTS,
EACH OF WHICH SHALL BE DEEMED AN ORIGINAL BUT BOTH OF WHICH TOGETHER SHALL
CONSTITUTE ONE AND THE SAME AGREEMENT.  FACSIMILE TRANSMISSION OF THE EXECUTED
VERSION OF THIS AGREEMENT OR ANY COUNTERPART HEREOF SHALL HAVE THE SAME FORCE
AND EFFECT AS THE ORIGINAL.

 

(L)            EXECUTIVE WARRANTIES.  THE EXECUTIVE WARRANTS AND REPRESENTS TO
THE COMPANY THAT THE EXECUTION AND PERFORMANCE OF THIS AGREEMENT DOES NOT AND
SHALL NOT VIOLATE ANY EXPRESS OR IMPLIED OBLIGATIONS OF THE EXECUTIVE TO ANY
OTHER PERSON AND THAT ALL EXECUTIVE SHALL INFORM ANY PROSPECTIVE EMPLOYER ABOUT
THE EXISTENCE OF THIS AGREEMENT BEFORE ACCEPTING EMPLOYMENT BY SUCH EMPLOYER.

 

(M)          HEADINGS.  THE HEADS OF THE SECTIONS OF THIS AGREEMENT ARE INSERTED
FOR CONVENIENCE ONLY AND SHALL NOT BE DEEMED TO CONSTITUTE PART OF THIS
AGREEMENT OR TO AFFECT THE CONSTRUCTION OF THIS AGREEMENT.

 

(N)           THIRD PARTY BENEFICIARIES.  THE COMPANY’S AFFILIATES AND
SUBSIDIARIES ARE EXPRESSLY MADE THIRD PARTY BENEFICIARIES OF THIS AGREEMENT.

 

(O)           NOTICES.  ANY NOTICE REQUIRED OR PERMITTED HEREUNDER SHALL BE
PERSONALLY DELIVERED OR MAILED BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
THE ADDRESSES OF THE PARTIES SET OUT ON THE SIGNATURE PAGE HERETO, OR AS CHANGED
FROM TIME TO TIME BY NOTICE AS PROVIDED HEREIN.

 

(P)           SUCCESSORS AND ASSIGNS.  THE EXECUTIVE SHALL NOT ASSIGN OR
TRANSFER ANY OF HIS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT TO ANY INDIVIDUAL
OR ENTITY.  THE COMPANY MAY ASSIGN ITS RIGHTS HEREUNDER TO ANY OF ITS AFFILIATES
OR TO ANY INDIVIDUAL OR ENTITY WHO OR THAT SHALL ACQUIRE OR SUCCEED TO, BY
OPERATION OF LAW, OR OTHERWISE, ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE
COMPANY OR THE COMPANY’S BUSINESS.  ALL PROVISIONS OF THIS AGREEMENT ARE BINDING
UPON, SHALL INURE TO THE BENEFIT OF, AND ARE ENFORCEABLE BY OR AGAINST, THE
PARTIES AND THEIR RESPECTIVE HEIRS, EXECUTORS, ADMINISTRATORS OR OTHER LEGAL
REPRESENTATIVES AND PERMITTED SUCCESSORS AND ASSIGNS.

 

(Q)           OPPORTUNITY TO CONSULT COUNSEL.  THE EXECUTIVE ACKNOWLEDGES THAT
HE HAS CAREFULLY READ THIS AGREEMENT AND HAS BEEN GIVEN ADEQUATE OPPORTUNITY,
AND HAS BEEN ENCOURAGED BY THE COMPANY, TO CONSULT WITH LEGAL COUNSEL OF HIS
CHOICE CONCERNING THE TERMS HEREOF BEFORE EXECUTING THIS AGREEMENT.

 

[SIGNATURE PAGE FOLLOWS].

 

16

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IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date
first written above.

 

 

HAYNES INTERNATIONAL, INC.

 

 

 

 

 

By:

/s/ JOHN COREY

 

Name: John Corey

 

           Chairman, Board of Directors

 

 

 

 

 

/s/ Mark Comerford

 

Mark M. Comerford

 

32288 Redwood Boulevard

 

Avon Lake, Ohio 44012

 

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EXHIBIT A

 

RELEASE OF ALL CLAIMS

 

FOR VALUABLE CONSIDERATION, including the payment to the Executive of certain
severance benefits, the Executive hereby makes this Release of All Claims
(“Release”) in favor of Haynes International, Inc. (the Company) and its agents
as set forth herein.

 

Section 1.           In consideration of the release and all of the promises and
representations made by Executive in this Agreement, the Company will: pay and
provide such severance and related benefits as set forth in that certain
Executive Employment Agreement by and between the Company and the Executive
dated                       .  It is understood and agreed that the severance
benefits and other consideration which will be provided to the Executive by the
Company pursuant to this Section are consideration provided to him/her in
addition to anything of value to which he/she is already entitled.

 

Section 2.           In consideration of the Company’s agreement to the payment
of the Separation Payment set forth in Section l above and the other good and
valuable consideration indicated herein, Executive (for himself/herself and
his/her personal representatives, heirs and assigns) RELEASES AND FOREVER
DISCHARGES the Company from any and all claims (including, but not limited to,
claims for attorneys’ fees), demands, losses, grievances, damages, injuries
(whether personal, emotional or other), agreements, actions, promises or causes
of action (known or unknown) which he/she now has or may later discover or which
may hereafter exist against the Company, in connection with or arising directly
or indirectly out of or in any way related to any and all matters, transactions,
events or other things occurring prior to the date hereof, including all those
arising out of or in connection with his/her employment or former employment
with the Company, or arising out of any events, facts or circumstances which
either preceded, flowed from or followed the termination of his/her employment,
or which occurred during the course of Executive’s employment with the Company
or incidental thereto or arising out of any other matter or claim of any kind
whatsoever and whether pursuant to common law, statute, ordinance, regulation or
otherwise.  Claims or actions released herein include, but are not limited to,
those based on allegations of wrongful discharge, failure to represent, fraud,
defamation, promissory estoppel, and/or breach of contract; those alleging
discrimination on the basis of race, color, sex, religion, national origin, age,
disability or handicap under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967 (“ADEA”), the Rehabilitation Act of
1973, the Equal Pay Act of 1963, the Americans with Disabilities Act of 1990,
the Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, the Fair
Labor Standards Act (all as amended) or any other federal, state or local law,
ordinance, rule or regulation; and those arising under the Executive Retirement
Income Security Act of 1974, all as amended (except for qualified retirement or
other benefit plans from which Executive is entitled under the terms of such
plans to receive future benefits).  Executive agrees and understands that any
claims he/she may have under the aforementioned statutes or any other federal,
state or local law, ordinance, rule, regulation or common law are effectively
waived by this Agreement.  No claims under the ADEA arising after the execution
of this Agreement are waived hereby.

 

Section 3.           The parties understand that, as used in this Agreement,
“the Company” includes Haynes International, Inc.  and all of their past and
present officers, directors,

 

A-1

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shareholders, employees, trustees, agents, parent companies, subsidiaries,
partners, members, affiliates, principals, insurers, any and all employee
benefit plans (and any fiduciary of such plans) sponsored by the aforesaid
entities, and each of them, and each entity’s subsidiaries, affiliates,
predecessors, successors, and assigns, and all other entities, persons, firms,
or corporations liable or who might be claimed to be liable, none of whom admit
any liability to Executive, but all of whom expressly deny any such liability.

 

Section 4.           Executive agrees that he/she will be solely and
individually responsible for compensating any attorney(s) for any services they
have rendered to or for him/her in connection with the review of this Agreement
or any other matters whatsoever.

 

Section 5.           In further consideration of the Company’s agreement to the
provisions and payment of the Separation Payment and other consideration set
forth in Section 1 above, Executive agrees that he/she will never assert a legal
or equitable action in any state or federal court or in any state or federal
agency against the Company, or any of the other persons or entities released
herein, with respect to the matters herein resolved and settled.  Executive
further agrees that, if he/she hereafter institutes an action against any of the
released entities or persons concerning any of the claims he/she has released in
this Agreement, except as provided in Section 13, he/she will repay to the
Company the full amount of any Separation Payment received (as described in
Section 1 above) and the value of all other benefits received, with legal
interest, and will pay the persons or entities for all costs and expenses,
including attorneys’ fees, incurred by them in defending against such claims.

 

Section 6.           It is understood and agreed that the Company has denied and
continues to deny that it is liable to Executive on any theory, and that nothing
in this Agreement, including, but not limited to, the payment of the Separation
Payment and other valuable consideration set forth in Section 1 hereof,
constitutes an admission by the Company of any fact, damage or liability to
Executive on any theory.

 

Section 7.           Executive hereby certifies that he/she has returned to the
Company, all of the Company’s property in Executive’s possession or control,
including but not limited to, any equipment, books, computer software, personal
digital assistant, Blackberry/Treo, cellular telephone or similar device,
computer hardware, documents, drawings, memoranda, manuals, and other records. 
Executive further agrees that, as a condition of this Agreement, the fact of and
terms and provisions of this Agreement are to remain strictly confidential and
shall not be disclosed to any person except Executive’s spouse and legal and/or
tax advisor(s), or as required by law or lawfully-issued subpoena.  It is
further agreed that Executive will not make any negative or disparaging remarks
or comments to any other person and/or entity about the Company.  Executive
agrees that, except as provided in Section 13, in the event that he/she or any
attorney, agent or representative of his/her discloses any information to anyone
in breach or violation of this Section, he/she will repay to the Company, with
legal interest, any Separation Payment paid by it pursuant to Section 1 of this
Agreement and the value of all other benefits provided.  Executive agrees that
he/she will direct all inquiries from prospective employers or other persons
directly to                                       .

 

Section 8.           Executive represents and warrants that in the making,
negotiation and execution of this Agreement, he/she is not relying upon any
representation, statement or

 

A-2

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assertion of fact or opinion made by any agent, attorney, executive or
representative of the persons, parties or corporations being released herein,
and he/she hereby waives any right to rely upon all prior agreements and/or oral
representations made by any agent, attorney, employee or representative of such
persons, parties or corporations.  Executive is advised hereby that he/she has
the legal right to consult with an attorney of his/her choosing prior to
executing this Agreement.

 

Section 9.           The parties stipulate and agree that all clauses and
provisions of this Agreement are distinct and severable, and Executive
understands, and it is his/her intent, that in the event this Agreement is ever
held to be invalid or unenforceable (in whole or in part) as to any particular
type of claim or as to any particular circumstances, it shall remain fully valid
and enforceable as to all other claims and circumstances.  As to any actions or
claims that would not be released because of the invalidity or unenforceability
of this Agreement, Executive understands and agrees that, except as provided in
Section 13, if he/she asserts or brings any such actions or claims against the
Company, he/she must repay to the Company the Separation Payment paid to him/her
pursuant to Section 1 above, with legal interest, along with the value of the
other benefits provided, and that the repayment of the Separation Payment paid
and the value of the other benefits and consideration given pursuant to
Section 1 above, with legal interest, is a prerequisite to asserting or bringing
any such actions or claims.

 

Section 10.         This Agreement contains the entire agreement of the parties
and supersedes all previous negotiations, whether written or oral.  This
Agreement may be changed only by an instrument in writing signed by the party
against whom the charge, waiver, modification, extension or discharge is sought.

 

Section 11.         This Agreement shall inure to the benefit of, may be
enforced by, and shall be binding on the parties and their heirs, executors,
administrators, personal representatives, assigns and successors in interest. 
It is understood and agreed that no breach of this Agreement shall be cause to
set it aside or to revive any of the claims being released herein.

 

Section 12.         In the event of any dispute about this Agreement, the laws
of the State of Indiana shall govern the validity, performance, enforcement, and
all other aspects of this Agreement.

 

Section 13.         Executive and the Company agree that by executing this
Agreement, and pursuant to Section 2 hereof, Executive has waived any claim
(administrative or otherwise) he/she may have under, among other things, the
ADEA.  If Executive files a charge alleging a violation of the ADEA with any
administrative agency or challenges the validity of this waiver and release of
any claim he/she might have had under the ADEA, he/she will not be required to
repay to the Company the Separation Payment or other benefits and consideration
provided by it pursuant to Section 1 of this Agreement, or pay to the Company
any other monetary amounts (such as attorneys’ fees and/or damages), as a
condition precedent to filing such a claim, unless the recovery of any such
amounts by the Company is otherwise authorized by law.  This Agreement is not to
be interpreted by either party or by any third party as an effort to interfere
with the protected right to file a charge or participate in an investigation or
proceeding under the ADEA.

 

A-3

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Section 14.         Executive represents that he/she:  has read this Agreement;
has been advised in writing to consult with, and review this Agreement with, an
attorney of his/her choosing before executing it; fully understands each and
every provision of this Agreement; and has voluntarily, on his/her own accord,
signed this Agreement.  Executive acknowledges that, in entering into this
Agreement in return for the Company’s Separation Payment and the other good and
valuable consideration set forth in Section 1 above, he/she is giving up current
and possible future administrative and/or legal claims.

 

Section 15.         The parties hereby acknowledge and agree that Executive will
have 21 calendar days to review this Agreement and that this Agreement may be
revoked by Executive within 7 calendar days after he/she signs it.  This
Agreement shall not be effective or enforceable until the 7 calendar-day
revocation period has expired.  Furthermore, the offer to make the Separation
Payment to Executive and provide the other benefits and consideration set forth
in Section 1, shall expire and be deemed automatically withdrawn by the Company
if not accepted and this Agreement signed within 21 calendar days.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date(s) set forth below.

 

[EXECUTIVE NAME HERE]

HAYNES INTERNATIONAL, INC.

 

 

 

 

 

 

By:

 

Signature

 

Signature

 

 

 

 

 

 

 

 

 

 

Printed

 

Printed

 

 

 

 

 

 

 

 

 

 

Date

 

Date

 

A-4

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