Unassociated Document


     

    
      Exhibit
        10.1

       

       

      Memorandum

       

       

      To: Scott
        T.
        Mereness

      From: Jason
        D.
        Lippert

      Date: January
        30, 2008

      Re: Compensation
        

       

        
          

        

      

       

      This
        memorandum is to confirm our compensation arrangement with respect to the
        three-year period from January 1, 2008 through December 31, 2010 (the “Term”)
        during which you are employed in the capacity of Executive Vice President
        and
        Chief Operating Officer of Lippert Components Manufacturing, Inc. (the
“Corporation”) and all other entities of which Lippert Components, Inc. is a
        direct or indirect parent or partner, excluding Lippert Components Holding,
        Inc.
        (collectively, the “LCI Entities”):

       

      1.  The
        Corporation hereby employs you for the Term, during which you agree to exert
        your best efforts to promote the interests of the LCI Entities in accordance
        with the policies of the LCI Entities as determined by their Chief Executive
        Officer. 

       

      2.  During
        the Term, you will receive Base Salary of $249,600 per annum, payable at
        the
        rate of $9,600 per biweekly period.

       

      3.  In
        addition to the Base Salary, for each year during the Term you will be entitled
        to receive performance-based incentive compensation (the “Bonus”) equal to 3.0%
        of (i) the excess of Operating Profits of the LCI Entities for such year
        over
        (ii) $20,100,000 (the “Base”); provided, however, that if any of the LCI
        Entities acquire additional business operations, the Base will be increased
        by
        the profits of the acquired business(es). The
        Bonus
        will be paid from, and will be applied against, the LCI Entities’ bonus
        accrual.

       

      4.  In
        addition to the Base Salary and Bonus, for the year ending December 31, 2008,
        you will be entitled to receive additional incentive compensation in the
        amount
        of One Hundred Forty Nine Thousand ($149,000) Dollars if the LCI Entities
        achieve a return on assets (“ROA”) of twenty four (24%) percent, which
        additional incentive compensation will increase at the pro-rata rate of Eighteen
        Thousand ($18,000) Dollars per one (1%) percent increase in ROA in excess
        of 24%
        (the “ROA Bonus”); provided, however, that the aggregate Bonus and ROA Bonus
        shall not exceed six (6%) percent of the “Operating Profits of the LCI Entities”
for such year. Any ROA Bonus for subsequent years during the Term will be
        determined by the Drew Industries Incorporated (“Drew”) Compensation Committee.


       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

        Memorandum
          -
          LCI

        January
          30, 2008

        Page
          - 2
-

      

       

       

      5.  The
        term
“Operating Profits of the LCI Entities” means the consolidated income of the LCI
        Entities (A) before (i) interest expense, (ii) interest or dividend income,
        (iii) impairment of goodwill, (iv) intercompany administrative fees charged
        to
        any of the LCI Entities by Drew, (v) taxes based upon income, (vi) extraordinary
        items determined in accordance with generally accepted accounting principles,
        and (vii) the cumulative effect of a change in accounting principles, and
        (B)
        after giving effect (positive or negative) to a capital charge equal to 6%
        of
        the increase or decrease in (i) the average net assets employed by the LCI
        Entities (the “Net Asset Base”) during the year for which the Bonus is being
        determined over (ii) $ 167,400,000. The term “net assets” means: (a) total
        assets, excluding cash and investment in wholly-owned subsidiaries, minus
        (b)
        total liabilities, excluding (i) current and long-term debt, (ii) intercompany
        balances, and (iii) income taxes payable or deferred, all as reflected on
        the
        monthly Balance Sheet of the LCI Entities as included in the Consolidating
        Balance Sheet of Drew and its subsidiaries. If any of the LCI Entities acquire
        additional business operations, the Net Asset Base will
        be
        increased by the assets acquired. The term “return on assets” means the
        Operating Profit of the LCI Entities for the subject year divided by the
        average
“net assets” employed by the LCI Entities during such year.

       

      6.  The
        aggregate Bonus and ROA Bonus in excess of five times the Base Salary for
        any
        year will be paid in shares of Drew Deferred Stock. The number of shares
        of
        Deferred Stock will be determined based on the closing market price of Drew
        common stock on the day preceding the date on which Drew releases its year-end
        results of operations, and issuance of Deferred Stock will be made as soon
        as
        practicable thereafter.

       

      7.  You
        shall
        be eligible to participate in any pension, retirement, or profit-sharing
        plan
        adopted by the LCI Entities for the benefit of its executives. Each year
        during
        the Term, you shall be entitled to receive $25,000 pursuant to Drew’s retirement
        bonus program, payable in the year earned, that must be used to purchase
        a tax
        deferred annuity and/or cash value life insurance. 

       

      8.  All
        compensation, in whatever form, payable in accordance with this arrangement
        is
        subject in all respects to the terms, provisions and conditions of the Drew
        Industries Incorporated 2002 Equity Award and Incentive Plan, as amended
        from
        time to time, and any Bonus and ROA Bonus, payable in cash or stock, will
        be
        paid on or between February 15 and March 15 of the year succeeding the year
        for
        which the Bonus or ROA Bonus is paid.

       

      9.  It
        is
        intended that the compensation arrangement described above will comply in
        all
        respects with the requirements of section 409A of the Internal Revenue Code
        of
        1986, as amended (the “Code). Accordingly, all elections to defer, all
        distributions, and all other aspects of such compensation will be made in
        compliance with Section 409A of the Code and any regulations or other guidance
        thereunder. To the extent required, this arrangement will be modified in
        order
        to comply with the provisions of Section 409A of the Code and any regulations
        or
        guidance thereunder.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        

          Memorandum
            -
            LCI

          January
            30, 2008

          Page
            - 3 -

        

      

       

       

      10.  During
        the Term and for a period of two (2) years from the date of termination of
        your
        employment with the LCI Entities (the “Restricted Period”), you agree that you
        will not, directly or indirectly, undertake or perform services in or for,
        or
        render services to, participate in, or have any financial interest in, or
        engage
        in, any business competitive to that of the business of the LCI Entities,
        Drew
        or their affiliates (collectively, the “Affiliated Companies”) or solicit for
        employment or employ any employee of the Affiliated Companies. For purposes
        hereof, a business shall be deemed competitive if it is conducted in any
        geographic or market area in which any of the Affiliated Companies are engaged
        in business during the Restricted Period and involves the development, design,
        manufacture, marketing, packaging, sale or distribution of any products
        developed, designed, manufactured, sold or distributed, or the offering of
        any
        services offered, by any of the Affiliated Companies, whether on the date
        hereof
        or as of the date of termination of your employment with the LCI Entities
        including, but not limited to, products for the manufactured housing (including
        park and office models), modular housing, recreational vehicle, and utility
        trailer industries; and you will be deemed directly or indirectly to engage
        in
        such business if you, or any member of your immediate family participates
        in
        such business, or in any entity engaged in or which owns, such business,
        as an
        officer, director, employee, consultant, partner, individual proprietor,
        manager
        or as an investor who has made any loans, contributed to capital stock or
        purchased any stock; provided further, however, that you further agree that
        you
        will not at any time utilize any tradenames or corporate names used by the
        Affiliated Companies, or any derivatives of such names, in any business
        competitive to that of the business of the Affiliated Companies, nor any
        patent,
        trademark, tradename, service mark, logo, copyright or similar intellectual
        property, whether or not registered, of any of the Affiliated Companies.
        The
        foregoing, however, shall not be deemed to prevent you from investing in
        securities if such class of securities in which the investment is made is
        listed
        on a national securities exchange or is of a company registered under Section
        12(g) of the Securities Exchange Act of 1934, and, if the company in which
        such
        investment is made competes with any of the Affiliated Companies, such
        investment represents less than one (1%) per cent of the outstanding securities
        of such class.

       

      You
        further agree that all products, packaging, inventions, patents, patent
        applications, designs, creations, ideas, techniques, methods, or any portions
        thereof, or any improvements or modifications thereon, or any know-how or
        procedures related thereto, which relate to the business of the Affiliated
        Companies, conceived, invented, discovered or executed by you during the
        Term,
        whether or not marketed or utilized by the Affiliated Companies, shall be
        the
        sole and exclusive property of the LCI Entities, without additional compensation
        payable therefore; and by these presents you hereby assign to the Corporation
        any and all right, title and interest you have, or may have,
        therein.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        

          Memorandum
            -
            LCI

          January
            30, 2008

          Page
            - 4 -

        

      

       

       

      You
        acknowledge and further agree that during, and as a consequence of employment
        with the LCI Entities, you will learn confidential, proprietary and trade
        secret
        information of the LCI Entities, and will have access to and be involved
        in the
        development and utilization of the LCI Entities’ confidential and proprietary
        business information. “Confidential Information” means
        information about the LCI Entities and the Affiliated Companies in whatever
        form
        disclosed to you or known to you as a consequence of your employment by the
        LCI
        Entities which relates to their business, products, processes, or services
        that
        gives them a competitive advantage in the marketplace, including, but not
        limited to: (a) any information that would be considered a trade secret within
        the meaning of applicable Federal or state law; (b) information relating
        to any
        of the LCI Entities’ existing products or services or products or services under
        development; (c) business information relating to the LCI Entities’ dealings
        with customers or suppliers; (d) confidential customer or prospective customer
        lists; (e) costs and profit margins; (f) confidential marketing and advertising
        programs; (g) financial information; (h) sales performance and strategies;
        (i)
        human resources strategies; (j) merger and acquisition plans; and (k)
        proprietary software or processes utilized by the LCI Entities. Confidential
        Information does not include information that you can prove was generally
        known
        or readily available to the LCI Entities’ competitors through legitimate means.
        You agree that you will not, either during employment with the LCI Entities
        or
        at any time thereafter, disclose to anyone (except as authorized by the LCI
        Entities in the furtherance of their business), publish, or use in competition
        with the LCI Entities, any of their Confidential Information. You further
        agree
        to abide by the LCI Entities’ rules or regulations it may implement from time to
        time to further protect its Confidential Information.

       

       

      

        
          	 	
                  Lippert
                    Components Manufacturing, Inc.

                
	
                  
                    _______________________________

                  

                	
                  _______________________________

                
	
                  Scott
                    T. Mereness

                	
                  Jason
                    D. Lippert, 

                
	 	
                  President
                    and Chief Executive Officer