exv10w3






Exhibit 10.3




Altra Holdings, Inc.

Executive Severance Policy

Effective November 1, 2008 




Plan Document and Summary Plan Description




1. Purpose and Administration.




          The Altra Holdings, Inc. Executive Severance Policy (the “Policy” or “Plan”) became effective
November 1, 2008 (the “Effective Date”) following approval by the Personnel and Compensation
Committee (the “Committee”) of the Board of Directors (the “Board”) of Altra Holdings, Inc. (the
“Company”). The Policy is intended to provide certain executives of the Company who are in a
position to contribute materially to the success of the Company with Severance Benefits if they are
separated from employment with the Company as set forth herein.




          The Company shall have sole authority in its sole and absolute discretion to interpret, apply
and administer the terms of the Plan and to determine eligibility for and the amounts of benefits
under the Plan, including the interpretation of ambiguous Plan provisions, determination of
disputed facts or application of Plan provisions to anticipated circumstances, in each case, in its
sole and absolute discretion. The Company’s decision on any such matter in its sole and absolute
discretion shall be final and binding. The Company is both the Plan Sponsor and Plan Administrator
of the Plan for purposes of ERISA and shall have responsibility for complying with any ERISA
reporting and disclosure rules applicable to the Plan. The Plan Administrator may at any time
delegate any other named person or body, or reassume therefrom, any of its fiduciary
responsibilities or administrative duties with respect to the Plan. The Company is also the named
fiduciary of the Plan within the meaning of ERISA, with the power to act in its sole and absolute
discretion with respect to the review of claims for benefits under the Plan that are denied. The
Company may contract with one or more persons to render advice or services with respect to any
responsibility it has under the Plan. Subject to the limitations of the Plan, the Company shall
from time to time establish such rules, regulations or guidelines as it may determine are necessary
or appropriate for the operation and administration of the Plan.




2. Definitions.




          As used in this Policy, the following terms shall have the respective meanings set forth
below:



a. “Cause” means (i) Participant’s material breach of the terms of any agreement between
Participant and the Company; (ii) Participant’s willful failure or refusal to perform his or her
material duties required pursuant to his or her employment; (iii) Participant’s willful
insubordination or disregard of the legal directives of the Board, or any senior executive to whom
Participant reports, which are not inconsistent with the scope, ethics and nature of Participant’s
duties and responsibilities; (iv) Participant’s engaging in misconduct which has a material adverse
impact on the reputation, business, business relationships or financial condition of the Company;
(v) Participant’s commission of an act of fraud or embezzlement against the Company or any of its
subsidiaries; or (vi) any conviction of, or plea of guilty or nolo contendere by, Participant with
respect to a felony (other than a traffic violation), a crime involving moral turpitude, fraud or
misrepresentation; provided, however, that Cause shall not be deemed to exist under any of clauses
(i), (ii) or (iii) unless Participant has been given reasonably detailed written notice of the
grounds for such Cause and Participant has not effected a cure within twenty (20) days of the date
of receipt of such notice.



b. “Code” means the Internal Revenue Code of 1986, as amended.



c. “Company” means Altra Holdings, Inc. and its affiliates including its wholly owned subsidiary
Altra Industrial Motion, Inc., or any successor to those entities. For purposes of this Policy,
the term “affiliate” means any entity controlling, controlled by, or under common control with the
Company.



d. “Date of Termination” means (i) the effective date on which the Participant’s employment by the
Company terminates pursuant to a Qualifying Separation as specified in a prior written notice by
the Company or the Participant, as the case may be, to the other, or (ii) if the Participant’s
employment by the Company terminates by reason of death, the date of death of the Participant.



e. “Disability” means that at the time the Participant’s employment is terminated, he or she has
been unable to perform the duties of his/her position for a period of six consecutive months as a
result of the Participant’s inability due to physical or mental illness.




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f. “Participant” means each of the senior executives of the Company who are selected by the
Committee for coverage by this Policy. As of the adoption date of the Policy, Participants shall
include the officers and executives set forth on Appendix A. The Committee and/or the Board shall
have the ability to amend Appendix A to add or remove Participants at its discretion.



g. “Plan” means the Altra Holdings, Inc. Executive Severance Policy, effective November 1, 2008.



h. “Plan Administrator” means Altra Holdings, Inc.



i. “Qualifying Separation” means a termination of employment (within the meaning of “separation
from service,” as defined in Section 1.409A-1(h) of the Final Treasury Regulations) from the
Company (and its affiliates) but specifically excludes, without limitation, termination of
employment due to Cause, death, Disability, or termination by the Participant.



j. “Separation Agreement” means an effective agreement prepared by the Company, executed by the
Participant and returned to the Company within the time period requested by the Company. It shall
contain (a) typical provisions concerning termination of employment (including, without limitation,
provisions regarding noncompetition, nonsolicitation, nondisparagement and confidential and
proprietary information), (b) a statement that Severance Benefits under this Policy are conditioned
upon the Company’s receipt of such agreement, and (c) a release (in a form to be determined by the
Company) by the Participant of the Company from any liability or obligation (excluding any
indemnification to which the Participant may be entitled pursuant to the Company’s Amended and
Restated Certificate of Incorporation, By-Laws and any coverage under directors and officers,
professional, fiduciary or errors or omissions policies that benefit the Participant) to the
Participant. To be effective, the Separation Agreement shall not have been revoked by the
Participant within the time permitted under applicable state and federal laws.



k. “Severance Benefits” mean the benefits set forth in Section 4.



l. “Severance Pay” means the salary continuation payments under Section 4 of this Policy.




3. Eligibility.




          This Policy applies to the Participants as defined herein and supersedes and replaces all
other policies and plans with respect to severance. Notwithstanding the foregoing, in the event a
Participant enters into a written agreement with the Company regarding severance, including without
limitation a change in control agreement, the terms and conditions of such written agreement shall
control with respect to the circumstances covered by such agreement. For avoidance of doubt, in
the event a Participant incurs a Qualifying Separation not covered by the express terms of any
written agreement with the Company (e.g., a Qualifying Separation not covered by a Change in
Control Agreement), Participant shall continue to be eligible to receive benefits under this
Policy.




4. Severance Benefits.




          The Company will, subject to the terms of the Policy, provide severance benefits as set forth
in this Section 4 to all Participants who have experienced a Qualifying Separation from the Company





	 	a.	 	Severance Pay. The Company will continue to pay to Participant his or her
regular annual base salary as in effect on Participant’s last day of employment (“Base
Salary”) for a period of twelve (12) months following the Date of Termination or until
commencement of new employment, whichever is earlier (“Severance Period”). Notwithstanding
the foregoing, during the applicable revocation period of a Participant’s Separation
Agreement, the severance payments that would otherwise have been paid during such time
shall be paid as soon as administratively feasible following the lapsing of such revocation
period. Subject to the foregoing, the Company shall pay to the Participant severance on
regular paydays of the Company to the extent administratively feasible. The Severance Pay
will be made less applicable withholdings and deductions.
	 
	 	b.	 	Medical and Dental Benefits. The Company will continue to provide Participant,
for a period of twelve (12) months following the Date of Termination or until commencement
of new employment providing substantially similar benefits, whichever is earlier, with
coverage under the Company’s group medical and dental insurance plans, provided the Company
is able to provide such benefits to Participant under its existing plans and arrangements.
Participant shall continue to contribute his or her portion of the premium for such
benefits,




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	 	 	 	deducted via payroll. Upon completion of the 12 month period, Participant shall be
eligible for COBRA continuation, at full cost to the Participant.
	 
	 	c.	 	Equity Awards. The rights regarding the Participant’s equity awards shall
continue to be governed by the agreements, instruments and stock plan governing such equity
awards.
	 
	 	d.	 	Separation Agreement. A Participant must execute an effective Separation
Agreement (a form of which is attached hereto as Appendix B) within 30 days of a Qualifying
Separation in order to receive Severance Benefits. Severance Benefits shall cease upon the
Participant violating any provision of his or her Separation Agreement, or any
post-termination obligations under his or her employment agreement (if any).





5. Non-Exclusivity of Rights.




          The terms of this Policy shall not prevent or limit the right of a Participant to receive,
prior to a Qualifying Separation, any base salary, retirement or welfare benefit, perquisite, bonus
or other payment provided by the Company to the Participant, except for such rights as the
Participant may have specifically waived in writing. Amounts that are vested benefits or which the
Participant is otherwise entitled to receive under any other benefit, policy or program provided by
the Company shall be payable in accordance with the terms of such policy or program.




6. Amendment; Termination.




          This Policy, including the designation of those who qualify as Participants, may be amended or
terminated by the Committee at any time. No such termination or amendment shall affect the rights
of any Participant whose employment has been terminated as a result of a Qualifying Separation, or
who is then receiving Severance Benefits at the time of such amendment or termination. If a
Participant dies after signing the Separation Agreement and prior to receiving all of the Severance
Pay to which he or she is entitled pursuant to the Policy, payment shall be made to the beneficiary
designated by the Participant to the Company or, in the event of no designation of beneficiary or
the death of the beneficiary, then to the estate of the deceased Participant.




7. 409A Compliance.




          Each payment under the Plan shall be treated as a separate payment under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the treasury regulations and other
guidance promulgated or issued thereunder (“Section 409A”). Notwithstanding the foregoing, if all
or any portion of the severance payment and/or benefits due under the Plan are determined to be
“non-qualified deferred compensation” subject to Section 409A and the Company determines that the
Participant is a “specified employee” (as defined in Section 409A(a)(2)(B)(i) of the Code and the
other guidance promulgated thereunder), then such severance payment and/or benefits shall commence
no earlier than the first day of the seventh month following Participant’s termination of
employment. Any payment or benefit delayed by reason of the prior sentence shall be paid in a
single lump sum on the first day immediately following the end of such required delay period in
order to catch up to the original payment schedule.




8. Non-Assignability.




          Severance Benefits pursuant to the Policy shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge prior to actual receipt
thereof by a Participant; and any attempt to so anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge prior to such receipt shall be void; and the Company shall not be liable
in any manner for, or subject to, the debts, contracts, liabilities, engagements or torts of any
person entitled to any Severance Benefits under this Policy.




9. No Employment Rights.




          This Policy does not constitute a contract of employment for a particular term or length
between any Participant and the Company, nor does it in any way alter any Participant’s status as
an employee-at-will who may be terminated with or without cause for any reason or no reason at all
except a reason prohibited by law.




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10. Governing Law.




          The terms of the Policy, to the extent not preempted by federal law, shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of Massachusetts (without
regard to its conflict of laws principles) including all matters of construction, validity and
performance.




11. ERISA Rights.




          The Plan is an “employee welfare benefit plan” subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”). Any employee or former employee of the Company
who believes that he or she has not been provided with benefits otherwise due under the Plan are
“participants” of the Plan. Participants in the Severance Plan are entitled to certain rights and
protections under ERISA. ERISA provides that all employee welfare benefit plan participants shall
be entitled to:





	 	(a)	 	Receive Information About the Plan and its Benefits.






	 	(i)	 	Examine, without charge, at the Company’s locations, all
documents governing the Plan, including the updated Plan Document and Summary
Plan Description and a copy of the latest annual report (Form 5500 Series) filed
by the plan with the U.S. Department of Labor and available at the Public
Disclosure Room of the Employee Benefits Security Administration.
	 
	 	(ii)	 	Obtain, upon written request to the Plan Administrator, copies of
documents governing the operation of the plan, including the updated Plan
Document and Summary Plan Description and copies of the latest annual report
(Form 5500 Series). The Plan Administrator may make a reasonable charge for the
copies.






	 	(b)	 	Prudent Actions by Plan Fiduciaries. In addition to creating rights
for Plan participants, ERISA imposes duties upon the people who are responsible for the
operation of the Plan. The people who operate the Plan, called ``fiduciaries’’ of the
Plan, have a duty to do so prudently and in the interest of you and other Plan
participants. No one, including the Company or its employees, may discriminate against
a participant in any way to prevent a participant from obtaining a benefit or
exercising his or her rights under ERISA.
	 
	 	(c)	 	Participants’ Rights.






	 	(i)	 	If a participant’s claim for severance benefit is denied or
ignored, in whole or in part, the participant has a right to know why this was
done, to obtain copies of documents relating to the decision without charge, and
to appeal any denial, all within certain time schedules, pursuant to the Claims
Procedures given below.
	 
	 	(ii)	 	Under ERISA, there are steps a participant can take to enforce
the above rights. For instance, if the participant requests a copy of Plan
documents or the latest Form 5500s from the Plan and does not receive them
within 30 days, the participant may file suit in a Federal court. In such a
case, the court may require the Plan Administrator to provide the materials and
pay the participant up to $110 a day until he or she receives the materials,
unless the materials were not sent because of reasons beyond the control of the
Plan Administrator. If a participant has a claim for benefits which is denied
or ignored, in whole or in part, the participant may file suit in a state or
Federal court. If it should happen that a participant is discriminated against
for asserting his or her rights, the participant may seek assistance from the
U.S. Department of Labor, or he or she may file suit in a Federal court. The
court will decide who should pay court costs and legal fees. If the participant
is successful, the court may order the person the participant had sued to pay
the costs and fees. If the participant loses, the court may order the
participant to pay the costs and fees, for example, if it finds that the
participant’s claim is frivolous.






	 	(d)	 	Assistance with Participants’ Questions. If a participant has any
questions about the Plan, the participant should contact the Plan Administrator. If a
participant has any questions about his or her rights under ERISA, or if a participant
needs assistance in obtaining documents from the Plan Administrator, the participant
should contact the nearest office of the Employee Benefits Security Administration,
U.S. Department of Labor, listed in the telephone directory or the Division of
Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue




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	 	 	 	N.W., Washington, D.C. 20210. A participant may also obtain certain publications
about his or her rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration.





12. Claims Procedure.




          If an employee or former employee believes that he or she has not been provided with benefits
otherwise due under the Plan, then the employee or former employee (“Claimant”) may file a claim
for benefits (“Claim”) under this procedure with the Company’s Human Resources Department
at Altra Holdings, Inc., 14 Hayward Street, Quincy, Massachusetts 02171 or its delegate. Such
Claim must be made within ninety (90) days after the date the Claimant knows or should have known
that he/she is not entitled to benefits under the Plan. Upon submitting a Claim, the Claimant may
(1) submit written comments, documents, records, and other information relevant to his or her claim
and (2) obtain, upon request and free of charge, reasonable access to and copies of all documents,
records and other information relevant to his or her claim. Normally, upon receipt of a Claim, the
Plan Administrator will provide written notice of its decision on the Claim within ninety (90)
days. However, if special circumstances require additional time, the Claimant will be notified of
that fact within ninety (90) days, and the Plan Administrator will make a decision on the Claim
within one hundred eighty (180) days of the date the Claimant’s Claim was received. If no decision
is provided within the ninety (90)- or one hundred eighty (180)-day periods described in this
paragraph, the Claim will be deemed to have been denied.





	 	(i)	 	If a Claimant makes such Claim and the Plan Administrator denies
the Claim in whole or in part, the Plan Administrator shall give the Claimant
written notice of such decision setting forth the following:






	 	(A)	 	The specific reason or reasons for the denial;
	 
	 	(B)	 	References to the specific Plan provisions on which
the decision was based;
	 
	 	(C)	 	A description of any additional material or
information required to make the Claimant’s Claim acceptable, with a
statement of why such material or information is required;
	 
	 	(D)	 	A description of the Plan’s procedures, and the
time limits applicable to those procedures, to follow if the Claimant
wishes to have the denied Claim reviewed;
	 
	 	(E)	 	Notice that the Claimant may obtain free of charge,
copies of all documents, records and other information relevant to the
Claimant’s Claim; and
	 
	 	(F)	 	A statement that the Claimant has the right to
bring a civil action under section 502(a) of ERISA following an adverse
benefit determination on review.






	 	(ii)	 	Any Claimant may appeal a determination or denial of a Claim for
benefits as described in (a) above by making a written request to the Plan
Administrator for such a review within sixty (60) days after the Claimant
receives notice that the Claim has been denied (or within sixty (60) days after
the date the Claim is deemed denied) in whole or in part (“Appeal”). Such
Appeal should set forth all of the grounds upon which the Appeal is based and
any facts in support thereof, and should set forth any issues or comments which
the Claimant deems relevant to the Appeal.
	 
	 	(iii)	 	Upon submitting an Appeal, the Claimant may submit written
comments, documents, records, and other information relevant to his or her
Appeal. The Plan Administrator shall take such submissions into account in
rendering a decision on the Appeal without regard to whether such information
was submitted or considered in the initial benefit determination.
	 
	 	(iv)	 	Additionally, in reviewing the Appeal, the Plan Administrator may
require the Claimant to submit, within ten (10) days of its written notice, such
additional facts, documents or other evidence as the Plan Administrator in its
sole discretion deems necessary or advisable in making its review.
	 
	 	(v)	 	The Plan Administrator will review Claimant’s Appeal and normally
will notify the Claimant of its final decision within sixty (60) days after it
receives Claimant’s Appeal. However, in special circumstances, the Plan
Administrator may need additional time to make a final decision. By notifying
the Claimant of such special circumstances that require additional time, and of
the date




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	 	 	 	by which the decision can be expected, the Plan Administrator may take up to
an additional sixty (60) days (for a total of one hundred twenty (120) days)
to make a decision regarding the Appeal. If no decision is reported within
the sixty (60)- or one hundred twenty (120)-day periods described in this
paragraph, the initial denial of the claim will be deemed to have been
affirmed. The decision of the Plan Administrator on any Appeal shall be final
and conclusive upon all persons if supported by substantial evidence.
	 
	 	(vi)	 	The period of time within which a final decision related to the
Appeal is required to be made shall begin at the time an Appeal is filed in
accordance with the procedures of the Plan, without regard to whether all the
information necessary to make such decision accompanies the filing. In the
event that a period of time is extended as permitted due to a Claimant’s failure
to submit information necessary to decide a Appeal, the period for making a
final decision regarding the Appeal shall be tolled from the date on which the
notification of the extension is sent to the Claimant until the date on which
the Claimant responds to the request for additional information.
	 
	 	(vii)	 	If the Plan Administrator denies a Claimant’s Appeal in whole or
in part, the Plan Administrator shall give the Claimant written notice of the
final decision setting forth the following:






	 	(A)	 	The specific reason or reasons for the denial;
	 
	 	(B)	 	References to the specific Plan provisions on which
the decision was based;
	 
	 	(C)	 	A statement that the Claimant is entitled to
receive, upon request and free of charge, reasonable access to and copies
of, all documents, records, and other information relevant to the
Claimant’s Appeal; and
	 
	 	(D)	 	A statement of the Claimant’s right to bring a
civil action under section 502(a) of ERISA.






	 	 	 	A Claimant or his or her legal representative may further appeal the Plan
Administrator’s final decision by filing an action in a federal court of
competent jurisdiction, provided that such action is filed no later than
ninety (90) days after receipt of a final decision by the Claimant or his or
her legal representative. The agent for service of process in connection with
the Plan is the Director of Human Resources located at Altra Holdings, Inc.,
14 Hayward Street, Quincy, Massachusetts 02171, and legal process can also be
served on the Plan Administrator at the same address.
	 
	 	(viii)	 	Notwithstanding the above, completion of the claims procedures described in
this Section 12 is a condition precedent to the commencement of any legal or
equitable action in connection with a claim for benefits under the Plan by a
Claimant or any other individual or entity, unless the Plan Administrator, in
its sole discretion, waives compliance with such Claim procedures as a condition
precedent





     13. Miscellaneous.



          a. Taxes and Withholding. As a condition to any payment or distribution pursuant to
the Policy, the Company may require a Participant to pay such sum to the Company as may be
necessary to discharge its obligations with respect to any taxes, assessments or other governmental
charges imposed on property or income received by the Participant thereunder. The Company may
deduct or withhold such sum from any payment or distribution to the Participant.




          b. Right to Offset. Notwithstanding any provisions of the Policy to the contrary, the
Company may offset any amounts to be paid to a Participant (or, in the event of the Participant’s
death, to his beneficiary or estate) under the Policy against any amounts that such Participant may
owe to the Company.




          c. Severability. If any provision of the Policy is determined to be invalid, illegal
or unenforceable, such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Policy, such provision shall be stricken, and the
remainder of the Policy shall remain in full force and effect.




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14. Important Information About the Plan.





	 	•	 	The Plan is established and maintained by Altra Holdings, Inc.
	 
	 	•	 	The Employer Identification Number (EIN) is 61-1478870.
	 
	 	•	 	The Plan Number is 501.
	 
	 	•	 	The Plan is administered directly by the Plan Administrator. The Plan Administrator
has the authority to control and manage the operation of the Plan. The Plan
Administrator may terminate, suspend, withdraw or amend the Plan, in whole or in part,
at any time, subject to the applicable provisions of the Plan.
	 
	 	•	 	The Plan Administrator is: Altra Holdings, Inc.

14 Hayward Street

Quincy, MA 02171


	 
	 	•	 	The agent for service of legal process is Altra Holdings, Inc.
	 
	 	•	 	The Plan of benefits is financed by the Employer.
	 
	 	•	 	The date of the end of the Plan Year is December 31, 2008.










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Appendix A




The Participants under the Policy shall include the following officers and executives of the
Company:




	1.	 	VPGM Gearing and Belted Drives
	 
	2.	 	VPGM Global Couplings
	 
	3.	 	VPGM Electric Clutch Brakes
	 
	4.	 	VPGM Bearings and Overrunning clutches
	 
	5.	 	VPGM Heavy Duty Clutch Brakes
	 
	6.	 	VP Global Sales
	 
	7.	 	VP Marketing and Business Development
	 
	8.	 	VP Human Resources
	 
	9.	 	VP and General Counsel
	 
	10.	 	VP Finance






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Appendix B




SEPARATION AGREEMENT




     THIS AGREEMENT, made and entered into this the ___day of                     , 200_, by and between
Altra Holdings, Inc. (hereinafter referred to as “the Company”) and                                         ,
(hereinafter referred to as “the Employee”):



     WHEREAS the Employee and the Company agree that as of [Date], (hereinafter referred to as the
“Effective Date”) the employment relationship between them will terminate, and this Agreement will
become effective as set forth herein;



     WHEREAS the Employee and the Company agree that it is in the best interest of each that the
terms and conditions of the Employee’s termination of employment be expressly set forth and that
the severance payments and benefits to be provided by the Company be similarly set forth; and,



     NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter made by the
Employee and the Company and for other good and valuable consideration, the receipt and sufficiency
of which are hereby expressly acknowledged by the Employee and the Company, it is agreed that:




	 	1.	 	As of the Effective Date the Employee will perform no further services for the
Company, and his status as an employee of the Company will cease.
	 
	 	2.	 	After the Effective Date the Company shall provide the following payments and
benefits to the Employee:






	 	a.	 	Executive Severance Policy Benefits Exchanged Contingent upon
the Employee’s Execution of this Severance Agreement and Release 
	 
	 	 	 	Upon execution of this Waiver and Release, the Company will provide Employee
with Severance Pay as described in the Executive Severance Policy effective as
of November 1, 2008. The Company will pay the severance as salary
continuation, payable immediately following the Revocation Period described
below in paragraph 6(c). Required tax and other withholdings shall be
deducted from such payment.
	 
	 	b.	 	Medical and Dental Benefits
	 
	 	 	 	Upon execution of this Waiver and Release, the Company will continue to
provide Employee with medical and dental benefits as described in the
Executive Severance Policy effective as of November 1, 2008.






	 	3.	 	In consideration of the Company’s agreement to provide the Employee with the
payments and benefits listed in Paragraph 2, Employee, his heirs, executors, legal
representative, administrators, successors and assigns, fully discharges, releases the
Company (including its officers, directors, managers, supervisors, and or agents), and
any parent or affiliated companies (including their officers, directors, managers,
supervisors, or agents), as to all administrative charges, lawsuits, causes of action,
employment contracts, demands, and claims for damages whatsoever that he now has or now
may have in law or equity, including, but not limited to, all claims pertaining to or
arising out of his employment, any term, condition or privilege of his employment, or
the termination of his employment, and any claims arising under any state of federal
statutory or common law, such as Title VII or the Civil Rights Act of 1964 (“Title
VII”), 42 U.S.C.§ 2000e, et seq.; the Age Discrimination in Employment
Act (“ADEA”), 29 U.S.C.§§ 621-634; the Americans With Disabilities Act (“ADA”), 42
U.S.C.§ 12101 et seq.; the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C.§ 1001 et seq.; the Consolidated Omnibus Budget




 









 






	 	 	 	Reconciliation Act (“COBRA”), 29 U.S.C. § 1161 et seq.; wage payment
laws, and common law claims of wrongful termination, personal injury, breach of
contract, or other wrongful act or omission. This Agreement is not intended to waive
any claims that may arise after the date the Agreement is executed.






	 	4.	 	The parties agree that the Company had no prior legal obligation to make the
additional payments that have been exchanged for the promises made by Employee in this
Agreement.
	 
	 	5.	 	Employee acknowledges that he possesses sufficient education and experience to
fully understand the terms of this Agreement as it has been written, the legal and
binding effect of this Agreement, and the exchange of benefits and payments for
promises hereunder.
	 
	 	6.	 	Notification under the Older Workers Benefit Protection Act






	 	a.	 	Time to consider this Agreement. Employee acknowledges
that he has been provided with a copy of this Agreement and has been given
twenty-one (21) consecutive days in which to review and consider the Agreement.
	 
	 	b.	 	Legal counsel. Employee is advised by the Company to
consult with legal counsel and to seek a clarification of any of the terms of
the Agreement prior to signing this Agreement.
	 
	 	c.	 	Revocation. The Employee acknowledges that he has a
period of seven (7) calendar days following his signing of this Agreement to
revoke this Agreement (the “Revocation Period”). Any such revocation of the
Agreement must be made by the Employee and delivered to the CFO of TB Wood’s
Incorporated, Chambersburg, PA. Any revocation hereunder shall not affect the
Company’s termination of the Employee’s employment.
	 
	 	d.	 	When the terms become effective. The terms of the
Agreement shall become final and binding only upon expiration of the Revocation
Period provided in subparagraph 6(c) above. No payments shall be made under
paragraph 2(a) until the Agreement becomes final and binding upon the parties.






	 	7.	 	The Employee agrees that the only consideration for signing this Agreement are
the terms stated or identified in this Agreement or its attachments and that no other
promises or assurances of any kind have been made to him by the Company, its attorneys,
or any other person as an inducement to sign this Agreement. Therefore, this
Agreement, together with its exhibits and attachments, constitutes the entire
understanding of the parties, and no representation, promise, or inducement not
included herein shall be binding on the parties.
	 
	 	8.	 	The Employee understands and agrees that the Company’s obligation to perform
under this Agreement is conditioned upon the Employee’s performance of all agreements,
releases, and covenants to the Company as set forth herein.
	 
	 	9.	 	The Agreement shall inure to and be binding upon the parties hereto, their
respective heirs, legal representative, successors, and assigns.
	 
	 	10.	 	This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, except where federal law may apply.
	 
	 	11.	 	This Agreement does not constitute an admission of any wrongdoing by the
Company.
	 
	 	12.	 	The parties agree that the provisions of this Agreement shall be deemed
severable and that the invalidity or unenforceability of any portion of any provision
shall not affect the validity or




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	 	 	 	enforceability of other portions of such provisions. Such provisions shall be
appropriately limited and given effect to the extent that they may be enforceable.
	 
	 	13.	 	This Agreement may not be changed orally, but only by a subsequent agreement in
writing signed by the parties.
	 
	 	14.	 	Employee agrees to retain in strict confidence and not to use for any purpose whatsoever or
divulge, disseminate or disclose to any third party any proprietary, financial or other
confidential information relating to the Company, its business, or its business records that
Employee may recall from his employment with the Company.
The Employee further agrees that the provisions of this Agreement are confidential and
that the terms of this Agreement, including but not limited to the amount of any
payments made as outlined in paragraph 2 above, will not be divulged or disclosed in
any manner whatsoever to any person other than his attorney in a legally recognized
privileged communication; except that the Employee may communicate the terms of this
Agreement to his accountant or tax return preparer to the extent necessary in preparing
his [200_] tax return or to receive relevant tax advice, and to members of his
immediate family, but Employee shall be responsible for any disclosures by such persons
as though they were made by him. Employee also may make such disclosures as are
required by a valid, enforceable subpoena, a court of law with jurisdiction to compel
Employee’s testimony, or any governmental body with authority to compel Employee to
answer questions about the Agreement. The Employee agrees that this paragraph is a
material provision of their Agreement and that a breach of this term will release
Company from any further obligation under the Agreement and entitle the Company to
recover all monetary consideration furnished by the Company pursuant to this Agreement
and any other damages that it may establish.
	 
	 	15.	 	The Employee further states that he has carefully read this Agreement, knows
the contents thereof, has had the opportunity to consult legal counsel if he so wishes,
and signs the same of his own free act.
	 
	 	16.	 	The Employee agrees to refrain from making any derogatory comments to any
member of the media or any other public comment to any other third party concerning the
Company or any current or former officers, employees, directors, shareholders or
affiliates (including, without limitation, its parent corporation) of the Company. In
consideration of the foregoing, the Company agrees to refrain from making any
derogatory comment about the Employee to any third party (including, without
limitation, any prospective employer) and shall provide oral references upon request
and a mutually agreed upon letter of reference.
	 
	 	17.	 	It is understood and agreed that all files, papers, memoranda, letters,
handbooks and manuals, facsimile or other communications that were written, authorized,
signed, received or transmitted during or prior to Employee’s employment and any
Company property (including, without limitation, any computer hardware or software, or
other communications equipment) in Employee’s possession are and remain the property of
the Company and, as such, are not to be removed from the Company’s offices. In
addition, any such materials or property which may be in Employee’s possession, but
which are not in the Company’s offices, are to be returned.
	 
	 	18.	 	In consideration of the Company’s agreement to provide
the Employee with the payments and
benefits listed in Paragraph 2, Employee covenants and agrees for a period of twelve
months (12) from the Effective Date of this Agreement not to directly or indirectly enter
into the employ of or assist in any manner (including but not limited to acting as a
consultant, independent sales representative or distributor, with the exception of an
established, multi-line distributor) any direct competitor to the Company.	 
	 
	 	19.	 	In consideration of the Company’s agreement to provide the Employee with the payments
and benefits listed in Paragraph 2, Employee covenants and agrees for a period of twelve
(12) months from the Effective Date of the Agreement not to, for himself or any person,
firm, partnership, corporation, or other entity, (a) solicit, interfere with, or endeavor
to cause any Employee to leave the employment of the Company, or (b) induce or attempt to
induce any such Employee to breach an employment agreement with the Company.	 





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          IN WITNESS WHEREOF, the parties hereby execute this Agreement as follows:




	 	 	 	 	 	 	 	 	 	 	 
	Acknowledged and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	Name	 	Date	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	For the Company:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	Date	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 







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