Document:

Exhibit 10.25

 

409A AMENDMENT TO

TRIMAS CORPORATION

ANNUAL VALUE CREATION PLAN (AVCP)

 

Pursuant to resolutions adopted
on September 10, 2008 by the Compensation Committee of TriMas Corporation,
the TriMas Corporation Annual Value Creation Plan (AVCP) (the “Plan”) is
amended as set forth below to reflect the application of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) to the Plan.  This Amendment is effective September 10,
2008 (the “409A Amendment Date”).

 

1.             The first two sentences in “Participation”
on the first page of the Plan shall be amended and restated to read as
follows:

 

At the beginning of each
calendar year, the AVCP Committee identifies the specific positions that are
eligible for participation in the AVCP for that year.  The AVCP Committee is made up of the CEO and
CFO of TriMas, with input as needed from the Director of Human Resources and
the Director of Compensation and Benefits.

 

2.             A new section entitled “Executive
Severance/Change of Control Policy Participants” shall be added to page 5
of the Plan following the end of “AVCP Steps – End of the
Year” to read as follows:

 

Executive
Severance/Change of Control Policy Participants

 

If you are covered by the
TriMas Corporation Executive Severance/Change of Control Policy (the “Executive
Severance Plan”) and your employment is terminated involuntarily by the
Corporation without Cause or for “Good Reason” (both as defined in the
Executive Severance Plan), or if you are terminated pursuant to a Qualifying
Termination (as defined in the Executive Severance Plan) within three years
following a Change of Control (as defined in the Executive Severance Plan),
your AVCP payments, if any, shall be determined in accordance with the terms of
the Executive Severance Plan.

 

3.             The section entitled “Discretion
of Payments” under “Additional Information”
on page 6 of the Plan is amended and restated to read as follows:

 

Discretion
of Payments

 

The AVCP Committee reserves the
right to reduce or cancel any payments under the Plan at any time (including
during a plan year) based on the best interests of the Corporation and its
shareholders, including, but not limited to, circumstances relating to (1) individual
performance, (2) the Corporation’s financial performance, or (3) the
Corporation’s future performance objectives; provided, however, that unless
designated

 

 

elsewhere herein for “specified
employees” and Executive Severance Plan participants, AVCP awards under the
Plan shall be paid by march 15th following the calendar year in which
they are no longer subject to a substantial risk of forfeiture.

 

4.             The first sentence in the section entitled “Future of the Plan” under “Additional
Information” on page 6 of the Plan shall be amended and
restated in its entirety to read as follows:

 

The TriMas Corporation
Compensation Committee may amend or terminate this discretionary Plan at any
time, and the AVCP Committee reserves the right to interpret the Plan and
designate eligible participants, based on the best interests of the Company and
its shareholders.

 

5.             A new section entitled “Application
of Code Section 409A” shall be added after “Future of the Plan” under “Additional
Information” on page 6 of the Plan to read as follows

 

Application
of Code Section 409A

 

AVCP award payments under the Plan
are intended to be in compliance with Code Section 409A, but in no event
shall the Corporation be responsible for any tax or penalty owed by a
participant or beneficiary with respect to Plan benefits.  Between January 1, 2005 and the 409A
Amendment Date, the Plan was administered in good faith compliance under Code Section 409A,
taking into account the statutory language, legislative history and interim
guidance issued by the Internal Revenue Service relating to Code Section 409A.  Notwithstanding any provision of the Plan to
the contrary, if you are a “specified employee” under Code Section 409A at
the time of your separation from service, all or part of your Plan benefit (if
then required under Code Section 409A) shall be withheld until the earlier
of your death or the first day of the seventh month following your separation
from service, at which time the aggregated withheld amount shall be paid in a
lump sum and any remaining payments shall commence in accordance with the
applicable Plan provisions.

 

IN WITNESS
WHEREOF, TriMas Corporation has caused this 409A
Amendment to the TriMas Corporation Annual Value Creation Plan (AVCP) to be
executed on September 10, 2008.

 

	
   

  	
  TRIMAS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joshua
  A. Sherbin

  
	
   

  	
   

  	
   Joshua A. Sherbin

  
	
   

  	
  Its: Vice President,
  Secretary and General Counsel

  

 

2Exhibit
10.33

 

	
   

  	
  Department:

  Executive Office

  	
  Policy
  Number:

  
	
   

  	
   

  
	
  Date
  Issued:

  9/10/08

  	
  Supersedes
  Number:  

  Original

  
	
   

  	
   

  
	
  Prepared
  By:  

  General Counsel

  	
   

  
	
   

  	
   

  
	
  Approved
  By:  

  TriMas Compensation Committee

  
	
   

  	
   

  
	
  Title:     EXECUTIVE
  SEVERANCE/CHANGE OF CONTROL POLICY

  

 

Scope:                                                            This Policy applies to the following
Executive Officers (“Executives”) of TriMas Corporation (“TriMas” or the “Company”):
President/Chief Executive Officer; Chief Financial Officer; Executive Vice
President; Vice President – Finance and Treasurer; Corporate Secretary and
General Counsel; President – Packaging Systems; and such other officers as may
be determined by the TriMas Board of Directors (the “Board”).

 

Purpose:                                               To detail what compensation and benefits, if
any, are due to an Executive upon an Executive’s termination of employment with
the Company, which for purposes of this Policy shall be deemed to constitute “separation
from service”, as defined under Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”).

 

Policy:                                                          Executive is an at-will employee whose
employment may be terminated by Executive or TriMas at any time for any reason.
Upon termination, this Policy shall govern the rights and responsibilities of
the parties.  In connection with this Policy,
Executive will devote full business time and efforts to the performance of Executive’s
duties and responsibilities for the Company; provided that this Policy does not
preclude Executive from engaging in charitable and community affairs or
managing any passive investment (i.e., an investment with respect to which
Executive is in no way involved with the management or operation of the entity
in which Executive has invested) to the extent that such activities do not
conflict with the Executive’s duties; and further provided,  that Executive shall not, without the prior
approval of the Board, serve as a director or trustee of any other corporation,
association or entity, or own more than two percent (2%) of the equity of any
publicly traded entity.

 

1. Termination Without Cause or for Good Reason

 

If
the Executive’s employment is involuntarily terminated by the Company for any
reason other than Cause, Disability or death, or if employment is terminated by
Executive for Good Reason then the Company shall provide the Executive the
following severance benefits:

 

President / Chief Executive Officer

 

(A)      Base salary continuation for twenty-four (24) months at Executive’s
annual base salary rate in effect on the date of termination, subject to all
applicable withholding and reporting requirements, and paid in accordance with
usual Company payroll practices (“Separation Pay”), provided that the sum of
such amount shall not exceed two (2) times the lesser of:

 

(i)                                     the maximum dollar amount that may be taken
into account under a tax-qualified plan pursuant to Code Section 401(a)(17)
for the year in which the Executive was terminated, or

 

(ii)                                  the sum of the Executive’s annualized
compensation based upon the annual rate of pay for services to the Company for
the taxable year prior to the taxable year in which the termination occurs
(adjusted for any increase during that year that was expected to continue
indefinitely if the Executive had not terminated employment).

 

1

 

The payment in this Section A is intended to be a “separation pay
plan due to involuntary separation from service” under Treasury Regulation Section 1.409A-1(b)(9)(iii).  In the event that the Executive’s separation
pay is limited by application of (A)(i) or (A)(ii) of this Section,
the Committee shall provide additional true-up payments in accordance with Section 8.B.
of this Policy;

 

(B)        Payment of all accrued, but unused vacation by the next payroll date
following termination of employment;

 

(C)        Annual Value Creation Plan (AVCP) bonus payments equal to one (1) year’s
bonus at Executive’s target bonus level in effect on the date of termination.  The AVCP payments will be paid in equal
installments over the twenty-four (24) month period following the date of the
Executive’s separation from service; and subject to applicable withholding and
reporting requirements.  In addition,
Executive shall receive the AVCP bonus payment for the most recently completed
bonus term if a bonus has been declared for Executive but not paid, and a pro
rata bonus for the year of termination through the employment termination date
based on Executive’s target bonus level;

 

(D)       Any unvested equity awards Executive may have received under the 2002
Long Term Equity Incentive Plan shall immediately vest upon the employment
termination date and otherwise be exercisable consistent with the terms of such
plan.  Any unvested equity awards
Executive may have received  under any
subsequently issued equity plan shall 
vest upon employment termination in an amount equal to the number of
awards that would have vested as of the next occurring anniversary date of such
equity award adjusted pro rata to the anniversary of the grant date in the
month following the employment termination date, and otherwise be exercisable
consistent with the terms of such plan. 
Any equity awards subject to performance targets shall be paid only upon
attainment of the performance targets in accordance with the specified payment
date under the terms of such plan;

 

(E)         Reimbursement of the employer’s portion of COBRA premiums for medical
benefits under Company group benefits (including health, dental, vision, EAP
and prescription plans), as defined by the plan documents, until the earliest of
(i) the termination of Executive’s COBRA period; (ii) twenty-four
(24) months following Executive’s termination of employment; or (iii) the date
on which Executive becomes eligible to receive any medical benefits under any
plan or program of any other employer; provided that Executive timely elects to
continue health care coverage under COBRA and subject to the Company’s COBRA
policies.  Executive will be responsible
for payment of the COBRA premium and will be reimbursed monthly by the Company
for the portion of the premium that the Company would have paid if Executive had
continued to be a Company employee.  If
Executive does not become eligible for medical benefits of another employer and
the COBRA period expires before twenty-four (24) months have elapsed, during
the remaining portion of the twenty-four (24) month period, the Company shall
monthly pay Executive an amount equal to the amount that the employer would
have paid for Executive’s coverage if Executive had continued as a Company
employee;

 

2

 

(F)         Executive level outplacement services until the earlier of twelve (12)
months following Executive’s termination of employment or date on which
Executive is employed by a subsequent employer; and

 

(G)  Except for the benefits stated above,
Executive’s participation in all other Company benefits shall cease as of the
termination date and otherwise be governed by the terms of the plans, if any,
applicable to such benefits.

 

Executives, Excluding President /Chief Executive Officer

 

(A)      Base salary continuation for twelve (12) months at Executive’s annual base
salary rate in effect on the date of termination, subject to all applicable
withholding and reporting requirements and shall be paid in accordance with
usual Company payroll practices (“Separation Pay”), provided that the sum of
such amount shall not exceed two (2) times the lesser of:

 

(i)            the maximum dollar amount that may be taken into account
under a tax-qualified plan pursuant to Code Section 401(a)(17) for the
year in which the Executive was terminated, or

 

(ii)           the sum of the Executive’s annualized compensation based
upon the annual rate of pay for services to the Company for the taxable year
prior to the taxable year in which the termination occurs (adjusted for any
increase during that year that was expected to continue indefinitely if the
Executive had not terminated employment).

 

The payment in this Section A is intended to be a “separation pay
plan due to involuntary separation from service” under Treasury Regulation Section 1.409A-1(b)(9)(iii).
 In the event that the Executive’s
separation pay is limited by application of (A)(i) or (A)(ii) of this
Section, the Committee shall provide additional true-up payments in accordance
with Section 8.B. of this Policy;

 

(B)        Payment of accrued, but unused vacation by the next payroll period
following termination;

 

(C)        Annual Value Creation Plan (AVCP) bonus payments equal to one (1) year’s
bonus at Executive’s target bonus level in effect on the date of
termination.  The AVCP payments will be
paid in equal installments over the twelve (12) month period following the date
of the Executive’s separation from service and subject to applicable
withholding and reporting requirements. 
In addition, Executive shall receive the AVCP bonus payment for the most
recently completed bonus term if a  bonus
has been declared for Executive but not paid, and a pro rata bonus for the year
of termination through the termination date based on Executive’s target bonus
level;

 

(D)       Any unvested equity awards Executive may have received under the 2002
Long Term Equity Incentive Plan shall immediately vest upon the employment termination
date and otherwise be exercisable consistent with the terms of such plan.  Any unvested equity awards Executive

 

3

 

may have received under any subsequently issued
equity plan shall vest upon employment termination in an amount equal to the
number of awards that would have vested as of the next occurring anniversary
date of such equity award adjusted pro rata to the anniversary of the grant
date in the month following the employment termination date and otherwise be
exercisable consistent with the terms of such plan.  Any equity awards subject to performance
targets shall be paid only upon attainment of the performance targets in
accordance with the specified payment date under the terms of such plan;

 

(E)         Reimbursement of the employer’s portion of COBRA premiums for medical
benefits under Company group benefits (including health, dental, vision, EAP
and prescription plans), as defined by the plan documents, until the earliest
of (i) termination of Executive’s COBRA period; (ii) twelve (12)  months following Executive’s termination of
employment, or (iii) the date on which Executive becomes eligible to
receive any medical benefits under any plan or program of any other employer;
provided Executive timely elects to continue health care coverage under COBRA
and subject to the Company’s COBRA policies.  Executive will be responsible for payment of
the COBRA premium and will be reimbursed monthly by the Company for the portion
of the premium that the Company would have paid if Executive had continued to
be a Company employee; provided, however, that statutory COBRA coverage in
excess of twelve (12) months shall not include any reimbursement for the
employer’s portion;

 

(F)         Executive level outplacement services until the earlier of twelve (12)
months following the Executive’s termination of employment or date on which the
Executive is employed by a subsequent employer; and

 

(G)        Except for the benefits stated above, Executive’s participation in all
other Company benefits shall cease as of the termination date and otherwise be
governed by the terms of the plans, if any, applicable to such benefits.

 

For
purposes of this Policy, “Good Reason” means:

 

·                                          A material and permanent diminution in
Executive’s duties or responsibilities;

 

·                                          A material reduction in the Executive’s base
compensation; or

 

·                                          A permanent reassignment of Executive to
another primary office, or relocation of the Company office of more than 35
miles distance from current office location.

 

Executive
must notify the Company in writing of Executive’s intention to invoke
termination for Good Reason within ninety (90) days after the initial existence
of such event and provide the Company thirty (30) days opportunity after
written notice has been received from the Executive for cure, or such event
shall not constitute Good Reason under this Policy.  Executive may not invoke termination for Good
Reason if Cause exists at the time of such termination.  Additionally, Executive must terminate
employment within one (1) year following the initial existence of one (1) or
more of the events listed above in order for the termination to be considered
for “Good Reason.”

 

4

 

2. Voluntary Termination by Executive

 

If Executive terminates employment with the Company without Good
Reason, the Company shall pay Executive his orher accrued base salary through
the date of termination; earned but unused vacation compensation and the AVCP
award for the most recently completed year if an award has been declared for
such year but not paid.  The accrued
salary and vacation time shall be paid by the next normal payroll date
following termination of employment, and the AVCP award shall be paid in
accordance with the terms of the plan.  Except
for the benefits stated above, Executive’s participation in all other Company
benefits shall cease as of the termination date and otherwise be governed by
the terms of the plans, if any, applicable to such benefits.

 

3. Termination for Cause

 

If
the Company terminates Executive with Cause, or if Executive terminates
employment with the Company without good reason, the Company shall pay
Executive his or her accrued base salary through the date of termination, plus earned
but unused vacation compensation.  Executive
shall not be entitled to payment of any AVCP award, whether declared and unpaid
for any prior year,  for any portion of
the year in which the termination occurs or otherwise.  The accrued salary and vacation time shall be
paid within ten (10) days of termination of employment.  For purposes of this Policy, “Cause” shall mean:

 

·                                          Executive’s conviction of or plea of guilty
or nolo contendere to a crime constituting
a felony under the laws of the United States or any jurisdiction in which the
Company conducts business;

 

·                                          Executive’s willful failure or refusal to
perform his or her duties to the Company and failure to cure such breach within
thirty (30) days following written notice thereof from the Company;

 

·                                          Executive’s willful failure or refusal to
follow directions of the Board  (or
direct reporting executive) and failure to cure such breach within thirty (30)
days following written notice thereof from the Board (or direct reporting
executive); or

 

·                                          Executive’s breach of fiduciary duty to the
Company for personal profit.

 

Any
failure by the Company or a Subsidiary to notify an Executive after the first
occurrence of an event constituting Cause shall not preclude any subsequent occurrence
of such event (or similar event) from constituting Cause.

 

4.  Termination Following a
Change of Control

 

If
Executive’s employment with the Company terminates by reason of a Qualifying
Termination (as defined in this section) within three (3) years after a
Change in Control, in place of any other severance payment or other
consideration and subject to all legal requirements, Company shall provide
Executive the following separation benefits:

 

5

 

(A)      If employment termination occurs within two (2) years following a
Change in Control, a lump sum payment equal to Executive’s base salary for
thirty six (36) months at Executive’s annual base salary rate in effect on the
date of termination, subject to all applicable withholding and reporting
requirements, payable within sixty (60) days following Executive’s termination
of employment.  If employment termination
occurs during the third year following a Change in Control, base salary
continuation for thirty-six (36) months at Executive’s annual base salary rate
in effect at employment termination, subject to all applicable withholding and
reporting requirements.

 

(B)        If employment termination occurs within two (2) years following a
Change in Control, a lump sum payment for Annual Value Creation Plan bonus payments
equal to three (3) years’ bonus at the target bonus level in effect on the
date of termination, subject to applicable withholding and reporting
requirements.  In addition, Executive
shall receive a lump sum payment of the AVCP bonus payment for the most
recently completed bonus term if a bonus has been declared for Executive but
not paid, and a lump sum payment of the pro rata bonus for the year of
termination through the termination date based on Executive’s target bonus
level.  All lump sum payments shall be
made within sixty (60) days following Executive’s termination of employment.  If employment termination occurs during the
third year following a Change in Control, the amount of payments under this
paragraph (B) shall be the same as for termination within two (2) years
following a Change in Control, subject to applicable withholding and reporting
requirements, but the payments shall be made in equal installments over a
thirty-six (36) month period;

 

(C)        Any unvested equity awards Executive may have received under any equity
incentive plan shall immediately vest upon the termination date and otherwise
be exercisable consistent with the terms of such plan; provided, however, that
any equity awards subject to performance targets shall be paid only upon
attainment of the performance targets in accordance with the specified payment
date under the terms of such plan;

 

(D)       Reimbursement of the employer’s portion of COBRA premiums under Company
group benefits (including health, dental and prescription plans), as defined by
the plan documents, until the earliest of (i) the termination of Executive’s
COBRA period; (ii) thirty-six (36)) months following Executive’s
termination of employment, or (iii) the date on which Executive becomes
eligible to receive any medical benefits under any plan or program of any other
employer; provided Executive timely elects to continue health care coverage
under COBRA and subject to the Company’s COBRA policies;  Executive will be responsible for payment of
the COBRA premium and will be reimbursed monthly by the Company for the portion
of the premium that the Company would have paid if Executive had continued to
be a Company employee.  If Executive does
not become eligible for medical benefits of another employer and the COBRA
period expires before thirty-six (36) months have elapsed, during the remaining
portion of the thirty-six (36) month period, the Company shall monthly pay
Executive an amount equal to the amount that the employer would have paid for
Executive’s coverage if Executive had continued as a Company employee;

 

6

 

(E)         Executive level outplacement services until the earlier of twelve (12)
months following Executive’s termination of employment or date on which
Executive is employed by a subsequent employer; and

 

(F)   Except for the
benefits stated above, Executive’s participation in all other Company benefits
shall cease as of the employment termination date and otherwise be governed by
the terms of the plans, if any, applicable to such benefits.

 

A
Qualifying Termination shall be defined for purposes of this Policy as a
termination of Executive’s employment with the Company for any reason other
than:

 

·                                          Death;

 

·                                          “Disability (as defined in this Policy);

 

·                                          Cause (as defined in this Policy); or

 

·                                          A termination by Executive without Good
Reason (as defined in this Policy).

 

For
purposes of this Policy, “Change of Control” shall be defined as follows:

 

(i)                               “Change of Control,” with the two exceptions
described below, shall have the same meaning as in the Indenture dated as of June 6,
2002 among the Company, each of the Guarantors named therein and the Bank of
New York, as Trustee, relating to the 9 7/8% Senior Subordinated Notes due 2012
of Company, as in effect on the adoption of the Policy and regardless of
whether or not such notes or Indenture are hereinafter discharged, defeased or
repaid (the “Indenture”); and all defined terms used in such definition of
Change of Control shall have the meanings ascribed thereto under the Indenture
as well; provided that no acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Company or any of its subsidiaries shall
result in a Change of Control hereunder.

 

(ii)                            Paragraph (2) of the Change of Control
definition in the Indenture regarding liquidation or dissolution shall be
excluded from the definition applied herein to conform with Section 409A
of the Internal Revenue Code of 1986, as amended (“Code Section 409A”).

 

(iii)                         To conform with Code Section 409A, the
following provision shall control over the “Continuing Director” provision set
forth in paragraph (4) of the Change of Control definition in the
Indenture:  A Change of Control shall
occur on the first day on which a majority of the members of the Board of
Directors (“Board”) are not continuing Directors.  As of the date of determination, a “Continuing
Director” means any member of the Board who (a) has been a member of the
Board throughout the immediately preceding twelve (12) months, or (b) was
nominated for election, or elected to the Board with the approval of the
Continuing Directors who were members of the Board at the time of such
nomination or election, or designated as a Director under the Stockholders
Agreement.

 

7

 

5. Disability

 

If
Executive’s employment is terminated after it is determined that the Executive
is disabled (a) under Section 223(d) of the Social Security Act,
or any successor provision, and Executive is entitled to receive a disability
benefit under such Act, or (b) if Executive is unable to engage in any
substantial activity due to medically determinable physical or medical
impairment expected to result in death or to last for a continuous period of
not less than twelve (12) months, or (c) if due to any medically
determinable physical or mental impairment expected to result in death or last
for a continuous period not less than twelve (12) months, Executive has received
income replacement benefits for a period of not less than three (3) months
under a Company-sponsored accident and health plan, then all obligations of the
Company to make any further payments shall, except for earned but unpaid base
salary and accrued but unpaid AVCP bonus awards, shall terminate on the first
to occur of (i) the date that is six (6) months after such
termination or (ii) the date Executive becomes entitled to benefits under
a Company-provided long-term disability program.  Executive’s outstanding equity awards shall
become 100% vested in the event of a Disability termination hereunder.  The earned but unpaid base salary shall be
paid by the next normal payroll payment date following termination of the
Executive’s employment, and the AVCP award shall be paid in accordance with the
terms of such plan.  Company may only
terminate Executive on account of Disability after giving due consideration to
whether reasonable accommodations can be made under which Executive is able to
fulfill Executive’s job related duties. 
The commencement date and expected duration of any physical or mental
condition that prevents Executive from performing job related duties shall be
determined by a medical doctor selected by Company.  Company may, in its discretion, require
written confirmation from a physician of Disability during any extended absence.
Except for the benefits stated above, Executive’s participation in all other
Company benefits shall cease as of the date above on which Company’s obligation
to make payments ceases and otherwise be governed by the terms of the plans, if
any, applicable to such benefits.

 

6. Death

 

If
Executive’s employment terminates due to Executive’s death, all obligations of
Company to make any further payments, other than an obligation to pay any
accrued but unpaid base salary to the date of death and any accrued but unpaid
bonuses under AVCP to the date of death, shall terminate upon Executive’s death.  Executive’s outstanding equity awards shall
become 100% vested in the event Executive’s employment is terminated due to
death.  The accrued but unpaid base
salary shall be paid by the next normal payroll date following termination of
employment, and the accrued but unpaid AVCP award shall be paid in accordance
with the terms of such plan.  In
accordance with Company guidelines, Executive’s qualified dependents shall be
reimbursed for the employer portion of COBRA premiums for Company group medical
benefits (including health, dental, vision, EAP and prescription plans), as
defined by the plan documents, for a period not to exceed thirty-six (36)
months; provided a timely election to continue health care coverage under COBRA
is made and subject to Company’s COBRA policies.  Except for the benefits stated above,
Executive’s participation in all other Company benefits shall cease as of the
date of death and otherwise be governed by the terms of the plans, if any,
applicable to such benefits.

 

8

 

7. Non-Competition; Non-Solicitation; Confidentiality

 

In consideration of the benefits provided under this
Policy, Executive shall comply with the following:

 

(a)           Acceptance of employment
under this Policy and performance relative to this Policy are not in violation
of any restrictions or covenants under the terms of any other agreements to
which Executive is a party.

 

(b)           Executive acknowledges and
recognizes the highly competitive nature of the business of Company and
accordingly agrees that, in consideration of this Policy, the rights conferred
hereunder, and any payment hereunder, while Executive  is employed by Company and for the duration of
(i) any severance payments provided hereunder to Executive following the
termination of Executive’s employment with Company, or (ii) twenty four
(24) months following the termination of Executive’s employment with the
Company if no severance payment is payable hereunder upon such termination (“Non-Compete
Term”), Executive shall not engage, either directly or indirectly, as a
principal for Executive’s own account or jointly with others, or as a
stockholder in any corporation or joint stock association, or as a partner or
member of a general or limited liability entity, or as an employee, officer,
director, agent, consultant or in any other advisory capacity in any business
other than Company or its subsidiaries which designs, develops, manufacturers,
distributes, sells or markets the type of products or services sold,
distributed or provided by Company or its subsidiaries during the one (1) year
period prior to the date of employment termination (the “Business”); provided
that nothing herein shall prevent Executive from owning, directly or
indirectly, not more than five percent (5%) of the outstanding shares of, or any
other equity interest in, any entity engaged in the Business and listed or
traded on a national securities exchanges or in an over-the-counter securities
market.

 

(c)           During the Non-Compete Term,
Executive shall not (i) directly or indirectly employ or solicit, or
receive or accept the performance of services by, any active employee of
Company or any of its subsidiaries who is employed primarily in connection with
the Business, except in connection with general, non-targeted recruitment
efforts such as advertisements and job listings, or directly or indirectly
induce any employee of Company to leave Company, or assist in any of the
foregoing, or (ii) solicit for business (relating to the Business) any
person who is a  customer or former
customer of Company or any of its subsidiaries, unless such person shall have
ceased to have been such a customer for a period of at least six (6) months.

 

(d)           Executive shall not at any
time (whether during or after his employment with Company) disclose or use for
Executive’s own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than 

 

9

 

Company and any of its subsidiaries, any trade secrets, information,
data, or other confidential information of Company, including but not limited
to, information relating to customers, development programs, costs, marketing,
trading, investment, sales activities, promotion, credit and financial data,
financing methods, plans or the business and affairs of Company generally, or
of any subsidiary of Company, unless required to do so by applicable law or
court order, subpoena or decree or otherwise required by law, with reasonable
evidence of such determination promptly provided to Company.  The preceding sentence of this paragraph (d) shall
not apply to information which is not unique to Company or which is generally
known to the industry or the public other than as a result of Executive’s
breach of this covenant.  Executive
agrees that upon termination of employment with Company for any reason,
Executive will return to Company immediately all memoranda, books, papers,
plans, information, letters and other data, and all copies of these materials,
in any way relating to the business of Company and its subsidiaries, except
that Executive may retain personal notes, notebooks and diaries.  Executive further agrees that Executive will
not retain or use for Executive’s account at any time any trade names,
trademark or other proprietary business designation used or owned in connection
with the business of Company or its subsidiaries.

 

(e)           Although Executive and
Company consider the restrictions contained in this Policy to be reasonable, if
a final judicial determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Policy is
an unenforceable restriction against Executive, the provisions of this Policy shall
not be rendered void but shall be deemed amended to apply as to such maximum
time and territory and to such maximum extent as such court may judicially
determine or indicate to be enforceable. 
Alternatively, if any tribunal of competent jurisdiction finds that any
restriction contained in this Policy is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained herein.

 

(f)            In order to receive any of
the benefits described in this Policy, Executive shall be required to execute
an agreement pursuant to which Executive releases any claims Executive may have
against Company and agrees to the continuing enforceability of the restrictive
covenants of this Policy.

 

(g)           Executive will be required to surrender to Company
all correspondence, documents, supplies, files, equipment, checks, and all
other materials and records of any kind that are the property of Company or any
of its subsidiaries or affiliates that are in the possession or under control
of the Executive.

 

10

 

8. Miscellaneous provisions

 

 

A.            Payments
Not Compensation

 

Any
participation by Executive in, and any terminating distributions and vesting
rights (other than previously defined) under, Company sponsored retirement or
savings plans, regardless of whether such plans are qualified or non-qualified
for tax purposes, shall be governed by the terms of those respective plans.  Any salary continuation or severance benefits
shall not be considered compensation for purposes of accruing additional
benefits under such plans.

 

B.            Timing
of Payments

 

Each
of the payments under this Policy either is intended to comply with the
requirements of Section 409A and the regulations thereunder or qualify for
an exception to compliance with Section 409A.  Notwithstanding any provision of this Policy,
if any amount payable under this Policy is not exempt from Code Section 409A,
the payment of such amount shall not be made prior to, and shall, if necessary,
be deferred to and paid on the later of (i) the earliest date on which the
Executive experiences a “separation from service” (within the meaning of
Treasury Regulation 1.409A-1(h) and, (ii) if the Executive is a “specified
employee” (within the meaning of Treasury Regulation 1.409A-1(i)) on the later
of (a) the date of the Executive’s separation from service, (b) the
first day of the seventh month following the Executive’s separation from
service, or (c) the date of the Executive’s death, if earlier, with any
delayed payments being aggregated and paid in a lump sum.  Provided, however, that the Company does not
by operation of this requirement assume responsibility for compliance with Section 409A.  The Executive will be responsible for any
additional tax, interest or penalties under Section 409A arising out of payments
under this Policy.

 

C.            Payment
Process and Taxation Requirements

 

All
payments made under this Policy will follow the legal and tax payment requirements
outlined within the Appendix (A) of this Policy.

 

D.            Notices.

 

All notices or
communications hereunder shall be in writing, addressed as follows:

 

	
  To Company:

  	
  TriMas Corporation

  
	
   

  	
  39400 Woodward Ave., Suite 130

  
	
   

  	
  Bloomfield Hills, MI 48304

  
	
   

  	
  Attn: General Counsel

  

 

Any
such notice or communication shall be delivered by hand or by courier or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in a
notice duly delivered as described above), and the third (3rd)
business day after the actual date of mailing shall constitute the time at
which notice was given.

 

11

 

E.  Separability; Legal Fees

 

If
any provision of this Policy shall be declared to be invalid or unenforceable,
in whole or in part, such invalidity or unenforceability shall not affect the
remaining provisions which shall remain in full force and effect.  In the event of a dispute by Company, Executive
or others as to the validity or enforceability of, or liability under, any
provision of this Policy, Company shall reimburse Executive for all reasonable
legal fees and expenses incurred by Executive if Executive prevails in the
dispute resolution process.  If Executive
does not prevail, Executive and Company shall be responsible for their
respective legal fees and expenses.  Any
reimbursements shall occur by March 15th of the year following
the date on which the dispute resolution concludes and shall not be payable if
not exempt from or in compliance with Code Section 409A.

 

F.  ERISA Provisions

 

This
Policy constitutes a “top hat” plan maintained primarily for a group of
management or highly compensated employees and is exempted from most, but not
all of the provisions of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”).  To the extent that
ERISA applies, the ERISA provisions are set forth on Appendix B to the Policy.

 

G.  Dispute Resolution Governing
Law

 

Any
and all disputes arising under this Policy must be resolved in accordance with
the TriMas Dispute Resolution Policy process, as set forth in the ERISA
attachment on Appendix B to the Plan. To the extent not preempted by Federal
law, this Policy and all disputes related to it shall be governed by Michigan
law, without regard to conflict of law principles.

 

H.  Amendments and Termination;
Code Section 409A

 

This
Policy may be amended or terminated at any time by the Compensation Committee;
provided however, that no amendment or termination may adversely affect any
Executive without the Executive’s prior written
consent, and any termination shall comply with Code Section 409A.  Notwithstanding the foregoing, the
Compensation Committee may amend or terminate the Policy at any time following
twelve (12) months’ written notice to any adversely affected Executive.  Further, this Policy shall be construed and
administered in such manner as shall be necessary to effect compliance with
Code Section 409A and shall be subject to unilateral amendment by the
Company in such manner as the Company may deem necessary or appropriate to
effect such compliance.

 

I.  Code Section 162(m)

 

Notwithstanding
anything contrary in this Policy, to the extent any benefit covered  under this Policy is intended to be exempt from the
application of Code Section 162(m) as “performance based compensation”
(as defined in 162(m) and the regulations 

 

12

 

thereunder),
then such performance-based compensation shall only be paid to the Executive
upon death, Disability or a Change in Control.

 

13

 

APPENDIX A

APPLICATION OF GOLDEN PARACHUTE LIMITATIONS

 

1.             Cap
on Payments.

 

(a)           General Rules. The Code may
place significant tax burdens on Executive and Company if the total payments
made to Executive due to a Change of Control exceed prescribed limits.  In order to avoid this excise tax and the
related adverse tax consequences for Company, by signing this Agreement,
Executive will be agreeing that, subject to the exception noted below, the
present value of Executive’s Total Payments will not exceed an amount equal to
Executive’s Cap.

 

(b)           Special Definitions.  For purposes of this Section, the following
specialized terms will have the following meanings:

 

(1)           “Base  Period 
Income”.  “Base  Period 
Income” is an amount equal to Executive’s “annualized includable
compensation” for the “base period” as defined in Sections 280G(d)(1) and (2) of
the Code and the regulations adopted thereunder. Generally, Executive’s “annualized
includable compensation” is the average of Executive’s annual taxable income
from Company for the “base period,” which is the five calendar years prior to
the year in which the Change of Control occurs. These concepts are complicated
and technical and all of the rules set forth in the applicable regulations
apply for purposes of this Agreement.

 

(2)           “Cap” or “280G Cap”. “Cap” or “280G
Cap” shall mean an amount equal to 2.99 times Executive’s “Base Period Income.”  This is the maximum amount which Executive
may receive without becoming subject to the excise tax imposed by Section 4999
of the Code or which Company may pay without loss of deduction under Section 280G
of the Code.

 

(3)           “Total  Payments”.  The “Total Payments” include any “payments in
the nature of compensation” (as defined in Section 280G of the Code and
the regulations adopted thereunder), made pursuant to this Policy or otherwise,
to or for Executive’s benefit, the receipt of which is contingent on a Change
of Control and to which Section 280G of the Code applies.

 

(c)           Calculating the Cap and
Adjusting Payments. If Company believes that these rules will
result in a reduction of the payments to which Executive is entitled under this
Agreement, it will so notify Executive as soon as possible. Company will then,
at its expense, retain a “Consultant” (which shall be a law firm, a certified
public accounting firm, and/or a firm of recognized executive compensation
consultants) to provide an opinion or opinions concerning whether Executive’s
Total Payments exceed the limit discussed above. Company will select the
Consultant.  At a minimum, the opinions
required by this Section must set forth the amount of Executive’s Base
Period Income, the present value of the Total Payments and the amount and
present value of any excess parachute payments. 
If the opinions state that there would be an excess parachute payment,
Executive’s payments under this Policy will be reduced to the Cap. If the
Consultant selected to provide the opinions referred to above so requests in
connection with the opinion required by this 

 

14

 

Section, a firm of recognized executive compensation consultants
selected by Company shall provide an opinion, upon which such Consultant may
rely, as to the reasonableness of any item of compensation as reasonable
compensation for services rendered before or after the Change of Control.  If Company believes that Executive’s Total
Payments will exceed the limitations of this Section, it will nonetheless make
payments to Executive, at the times stated above, in the maximum amount that it
believes may be paid without exceeding such limitations. The balance, if any,
will then be paid after the opinions called for above have been received.  If it is ultimately determined, pursuant to
the opinion referred to above or by the Internal Revenue Service, that a
greater payment should have been made to Executive, Company shall pay Executive
the amount of the deficiency, together with interest thereon from the date such
amount should have been paid to the date of such payment, at the rate set forth
above, so that Executive will have received or be entitled to receive the
maximum amount to which Executive is entitled under this Agreement.  Notwithstanding the foregoing, reimbursement
for payments hereunder and excise taxes under Section 2 below shall be
made by the end of the calendar year following the calendar year in which the
taxes are paid.

 

(d)           Effect of Repeal.  In the event that the provisions of Sections
280G and 4999 of the Code are repealed without succession, this Section shall
be of no further force or effect.

 

(e)           Exception.  The Consultant selected pursuant to Section 1(c) of
Appendix A will calculate Executive’s “Uncapped Benefit” and Executive’s “Capped
Benefit.”  The limitations of Section 1(a) of
Appendix A shall not apply to Executive’s benefit if the Company reasonably
determines that the amount of the Uncapped Benefit that would be retained by
Executive, after payment of all applicable taxes by Executive, including excise
tax (but not the amount of any excise tax arising from any payment under Section 2
of Appendix A), exceeds the Capped Benefit, after payment by Executive of all
applicable taxes.  If the after tax
amount of the Uncapped Benefit that would be retained by Executive is equal to
or less than the after tax amount of the Capped Benefit that would be retained
by Executive, then payments to Executive shall be adjusted, as necessary, so
Executive’s Capped Benefit is not exceeded, as provided in Section 1(a) of
Appendix A.  For this purpose, Executive’s
“Uncapped Benefit” is the amount to which Executive would be entitled pursuant
to Section 4 of the Policy, without regard to the limitations of Section 1(a) of
Appendix A.  Executive’s “Capped Benefit”
is the amount to which Executive would be entitled pursuant to Section 4
of the Policy after the application of the limitations of Section 1(a) of
Appendix A.  In making this determination
the Company shall use Executive’s total presumed taxes.  “Total presumed taxes” means all federal,
state and local income taxes, excise taxes and employment taxes. Executive’s
total presumed taxes shall be conclusively calculated using a combined tax rate
equal to the sum of the maximum marginal federal and applicable state and local
income tax rates and employment and excise tax rates.  The state tax rate for Executive’s principal
place of residence will be used and no adjustments will be made for the
deduction of state taxes on the federal return, any deduction of federal taxes
on a state return, the loss of itemized deductions or exemptions, or for any
other purpose.

 

15

 

2.             Payment of Excise Tax.

 

If
the Cap imposed by Section 1(a) of Appendix A does not apply to
Executive because of the exception provided by Section 1(e) of
Appendix A, Company shall pay Executive an amount, in addition to the payments
otherwise due hereunder, that is calculated to equal the amount of excise tax
that Executive will incur under Section 4999 of the Code in connection
with Total Payments and this payment under Section 2 of Appendix A.  This amount will be calculated by the
Consultant and will paid by Company, less applicable tax withholdings, as soon
possible after the amount of the Uncapped Benefit is determined.  No adjustment shall be required if the actual
amount of the excise tax is more or less than the amount calculated by the
Consultant.  The Executive shall not be
entitled to any tax “gross up” payments pursuant to this provision.

 

16

 

APPENDIX
B

ERISA ATTACHMENT TO TRIMAS CORPORATION

EXECUTIVE SEVERANCE/CHANGE OF CONTROL POLICY

 

The TriMas Corporation Executive Severance/Change of Control Policy
(the “Policy”), is intended to constitute an unfunded plan maintained primarily
for the purpose of providing benefits for a select group of management or
highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  Notwithstanding any contrary provisions in
the Policy, the Policy is subject to the provisions set forth below.

 

1.             Plan Administrator and Named Fiduciary. 
The Plan Administrator and Named Fiduciary of the Plan for purposes of
ERISA shall be TriMas Corporation, or any successor thereto.  The address of the Plan Administrator is
39400 Woodward Avenue, Suite 130, Bloomfield Hills, MI  48304. 
The Plan Administrator shall have absolute discretion to administer the
Plan, including but not limited to questions of construction, interpretation
and eligibility under the Plan.

 

2.             Claims Procedure. 
Claims for benefits under the Policy shall be processed in accordance
with the TriMas Corporation Alternative Dispute Resolution Policy (the “ADR
Policy”), subject, however, to the modifications described below.

 

(a)           Mediation.  If an
Executive is unable to resolve a dispute over benefits under the Policy through
internal human resource channels, he or she must request mediation of the
dispute.  The decision of the mediator
shall be delivered to the Executive electronically or by mail within 90 days
after the Executive’s request for mediation, unless circumstances require an
extension.  The need for an extension shall
be communicated to the Executive before the expiration of the initial 90 day
period.  The extension may not exceed 90
days.

 

If the mediator denies the Executive’s claim for benefits, the mediator
shall provide, in written or electronic form, a notice of a claim denial, which
sets forth:

 

(1)           the specific reasons for the denial;

 

(2)           reference to specific provisions of the
Policy upon which the denial is based;

 

(3)           a description of any additional material
or information necessary for the Executive to perfect his or her claim, along
with an explanation of why such material or information is necessary; and

 

(4)           an explanation of claim review procedures
under the Policy and the time limits applicable to such procedures.

 

Any such claim denial notice shall be written in a manner that may be
understood without legal or actuarial counsel.

 

 

17

 

(b)           Arbitration.

 

(1)           An Executive whose claim for benefits has
been wholly or partially denied by the mediator may request arbitration of such
denial.  The request for arbitration must
be in written or electronic form, and delivered to the Plan Administrator
within 60 days following the denial of the claim by the mediator.

 

The request should set forth the reasons why the
Executive believes the denial of his or her claim is incorrect.  The Executive shall be entitled to submit
such issues, comments, documents, or records as the Executive shall consider
relevant to a determination of the claim, without regard to whether such
information was submitted to or considered by the mediator. Prior to submitting
such request, the Executive shall be provided, upon request and free of charge,
reasonable access to, and copies of, such documents, records, and other
information that are relevant to the claim.

 

(2)           The Executive may, at all stages of
review, be represented by counsel, legal or otherwise, of his or her choice,
provided that the fees and expenses of the Executive’s counsel shall be borne
by the Executive.

 

(3)           The Plan Administrator’s decision with
respect to any such review shall be delivered electronically or in writing to
the Executive no later than 60 days following receipt by the Plan Administrator
of the Executive’s request, unless special circumstances, such as the need to
hold a hearing, require an extension of time for processing.  If an extension is needed, the Plan
Administrator shall, before the end of the initial review period, give the
Executive written notice of the special circumstances requiring the extension and
the date by which he or she expects a decision will be rendered. In any event,
the Plan Administrator must provide the Executive with written or electronic
notification of the decision on review no later than 120 days after receipt of
the Executive’s request.

 

In the case of an adverse benefit determination by the
arbitrator, the notification shall set forth the information described in Section (a)(1) and
(2) above, a statement that the Executive is entitled to receive, upon
request and at no charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claim, a description of any
voluntary appeal procedure offered by the Policy, and the Executive’s right to
obtain information about the appeals procedure.

 

(c)           Time Limits Affecting Jurisdiction. 
The Plan Administrator shall not entertain a claim or a request for
review unless it is filed timely in the manner specified by subsection (c) above,
which is a condition precedent to obtaining review by the Plan Administrator.  The period of time within which the benefit
determination, or an appeal of a benefit determination, is required to be made
shall begin at the time the claim or appeal is filed and without regard to
whether all the information necessary to make a determination accompanies the
filing.  If the period of review is
extended because of the Executive’s failure to submit all necessary
information, the period for making the determination shall be tolled from the
date the notice of extension is sent to the Executive to the date on which the
Executive responds to the request.

 

(d)           TriMas Alternative Dispute Resolution
Policy Process.  An arbitrator selected pursuant to the ADR
Policy, as modified above, shall not have jurisdiction or authority to change,
add to or subtract from any of the provisions of the Policy.  The arbitrator’s sole authority shall be to
interpret or apply the provisions of the Policy, and the arbitrator shall have
the power to compel attendance of witnesses at the hearing.  The arbitrator shall be appointed upon mutual
agreement of the Corporation and the Executive pursuant to the arbitration rules referenced
above.  Once an Executive commences
arbitration proceedings, 

 

18

 

the Executive shall not be permitted to terminate the
arbitration proceedings without the express written consent of the
Corporation.  Any court having
jurisdiction may enter a judgment based upon such arbitration.  All decisions of the arbitrator shall be
final and binding on the Executive and the Corporation without appeal to any
court.  The costs of the arbitration
shall be split equally between the parties.

 

3.             Non-alienation of Benefits. 
Except in so far as this provision may be contrary to applicable law, no
sale, transfer, alienation, assignment, pledge collateralization, or attachment
of any benefits under the Policy shall be valid or recognized by the
Corporation.

 

19

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