Document:

Exhibit 10.3

 

 

EMPLOYEE MATTERS AGREEMENT

 

THIS EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is effective as of [·], 2012, by and among General Growth Management, Inc., a Delaware corporation (“GGMI”), GGP Limited Partnership, a Delaware limited partnership (“GGPLP” and collectively with GGMI, “GGP”), and Rouse Properties, Inc., a Delaware corporation (“Spinco” and together with GGMI and GGPLP, the “Parties”).  Unless otherwise indicated, capitalized terms have the meanings set forth in the Separation Agreement (as hereinafter defined).

 

WHEREAS, the Parties and/or their respective Affiliates have entered into that certain Separation Agreement (the “Separation Agreement”) dated as of [·], 2012 pursuant to which GGP will create a new publicly traded company which shall operate the Spinco Business (as defined in the Separation Agreement);

 

WHEREAS, in anticipation of the transactions contemplated by the Separation Agreement, certain employees of GGP whose employment relates to the Spinco Business, transferred employment from GGP to Spinco on January 1, 2012, and the Parties wish to set forth the terms and conditions of employment of such employees; and

 

WHEREAS, Spinco’s employees, unless otherwise elected by Spinco in accordance with the terms hereof, ceased to participate in certain employee benefit plans sponsored by GGP on December 31, 2011 and commenced participation in employee benefit plans sponsored by Spinco.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants set forth in the Separation Agreement and herein, and other good and valuable consideration, and contingent upon the consummation of the transactions contemplated by the Separation Agreement, the parties hereby agree as follows:

 

SECTION 1.           Defined Terms.

 

Capitalized terms not otherwise defined herein shall have the same meanings as in the Separation Agreement or as set forth below, as applicable:

 

“Beneficiaries” means eligible spouses, dependents, beneficiaries, heirs, successors and assigns of the Business Employees or Former Business Employees.

 

“Business Employees” means those employees employed by the Spinco Group as of the date hereof and identified on Schedule A hereto.

 

“COBRA” means Section 4980B of the Code and Title I, Subtitle B, Part 6 of ERISA.

 

“Employee Agreements” means those employment, retention, termination, severance, supplemental retirement, deferred compensation and other similar agreements between the Spinco Group and any Business Employee or Former Business Employee, including, without limitation, the agreements listed on Schedule B hereto.

 

“FMLA” means the Family and Medical Leave Act of 1993, as amended.

 

 

“Former Business Employees” means former employees of the Spinco Group and former employees of the GGP Group who were last employed in the Spinco Business, as identifiable on GGP’s payroll and employment records (including, without limitation, individuals listed on Schedule C hereto).

 

“GGP Plans” means the employee benefit plans maintained by GGP and its Affiliates for Business Employees in effect immediately prior to the Transfer Date.

 

“Transfer Date” means January 1, 2012 or such later date as may be agreed by the Parties, but in no event later than the Distribution Date.

 

SECTION 2.           Employment of Business Employees.

 

(a)      Terms and Conditions of Employment.  For a period of one year following the Distribution Date, the Business Employees shall be entitled to receive, while in the employ of Spinco or any of its Affiliates:  (i) base salary or wages and target cash incentive compensation opportunities having a comparable, employer-provided aggregate value as those provided to such employees immediately prior to the Transfer Date, (ii) employee benefits having a substantially comparable employer-provided aggregate value as employee benefits provided under the applicable GGP Plans immediately prior to the Transfer Date, and (iii) severance benefits that are no less favorable than the severance benefits provided by the GGP Group for such employees in effect immediately prior to the Transfer Date.  Nothing in this Agreement shall require the Spinco Group to establish any specific type of benefit plan (including, without limitation, any tax-qualified or non-qualified defined benefit pension, retiree health or retiree welfare benefits).

 

(b)      Bonuses and Accrued and Unpaid Wages.  Spinco acknowledges and agrees that as of the Transfer Date, Spinco or a member of the Spinco Group assumed and, subject to the requirements or limitations of applicable Law, shall pay all obligations to each Business Employee pursuant to any cash bonus or commission program if, and to the extent that:  (i) such obligations are payable to such Business Employees after the Transfer Date or (ii) an inter-company charge for such obligations exists as of the Transfer Date.  Consistent with Spinco’s obligation under the first sentence of this Section 1(b), Spinco shall, or shall cause a member of the Spinco Group to, pay Business Employees any amounts due under annual cash bonus or commission programs for the 2011 calendar year on the same basis as in effect immediately prior to the Transfer Date.  In addition, Spinco shall or shall cause a member of the Spinco Group to, subject to the limitations of applicable law, pay all Business Employees their accrued and unpaid wages as of the Transfer Date.

 

(c)      Employee Agreements.  Subject to the requirements or limitations of applicable Law, the Spinco Group shall retain exclusive responsibility on and after the Transfer Date for all Employee Agreements.  Spinco agrees and acknowledges that, subject to the requirements or limitations of applicable Law, as of the Transfer Date Spinco or a member of the Spinco Group assumed all obligations of the GGP Group under all Employee Agreements pursuant to which any of the GGP Group has any obligation, contingent or otherwise, to any Business Employee or Former Business Employee.

 

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(d)      Accrued and Unused Paid Time-Off; FMLA.  Effective as of the Transfer Date, Spinco agrees and acknowledges that Spinco or a member of the Spinco Group, assumed or retained, as the case may be, all obligations of the GGP Group for the accrued and unused or unpaid paid time-off of the Business Employees as of such date (except as may otherwise be required in accordance with applicable law).  For the avoidance of doubt, GGP shall retain all obligations for and shall cause to be paid to the Business Employees all accrued and unused or unpaid paid time-off (other than sick days, except as required by applicable law) as of December 31, 2011.  With respect to all Business Employees who commence a leave of absence prior to December 31, 2011, Spinco shall, or shall cause a member of the Spinco Group to, provide the benefits mandated by the FMLA or provided pursuant to GGP’s discretionary leave of absence policy, as applicable, with respect to such leave of absence, without regard to whether Spinco or any member of the Spinco Group is subject to the FMLA or is otherwise obligated to honor such leave of absence.

 

(e)      Credit for Service.  Subject to the requirements or limitations of applicable Law, Spinco shall, or shall cause a member of the Spinco Group to, credit Business Employees for service earned on and prior to the Transfer Date with the GGP Group, and, to the extent recognized under corresponding GGP Plans, any of their respective predecessors, in addition to service earned with the Spinco Group on or after the Transfer Date:  (i) to the extent that service is relevant for purposes of eligibility, vesting or the calculation of paid time-off, sick days, severance, layoff and similar benefits (but not for purposes of defined benefit pension benefit accruals or vesting of equity compensation awards) under any retirement or other employee benefit plan, program or arrangement of the Spinco Group for the benefit of the Business Employees on or after the Transfer Date and (ii) for such additional purposes as may be required by applicable Law; provided that nothing herein shall result in a duplication of benefits.

 

SECTION 3.           GGP Plans and Liabilities.

 

(a)      No Assumption or Transfer of GGP Plans.  Except as otherwise specifically provided in the Agreement, the Spinco Group shall not assume sponsorship of or any administrative obligations under, or receive any right or interest in any trusts relating to, any assets of or any insurance, administration or other contracts pertaining to, or have any liability with respect to any of the GGP Plans.

 

(b)      No Assumption of GGP Liabilities.  Except as otherwise specifically provided herein or in the Separation Agreement, the Spinco Group shall not assume any liabilities or obligations of GGP or any other member of the GGP Group under any of the GGP Plans or otherwise have any liability with respect to any of the GGP Plans, with respect to any employee of GGP (other than the Business Employees).

 

(c)      Participation in GGP Plans.  All Business Employees and Former Business Employees shall, as of January 1, 2012, cease any active participation in and any benefit accrual under all GGP Plans; provided that, if so elected in writing by Spinco not later than January 1, 2012, Business Employees and Former Business Employees may continue participation in the GGP Plans which are welfare benefit plans and which are listed on Schedule D hereto, on the same terms and conditions as in effect from time to time through the end of the calendar month in which the Distribution Date occurs.  Further, Business Employees and Former Business

 

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Employees may continue after January 1, 2012 to participate in accordance with, and subject to their eligibility under, the terms of the applicable GGP Plans as in effect from time to time as follows:

 

(i)             as to claims incurred on or prior to December 31, 2011 under the GGP Plans which provide health, disability, worker’s compensation, life insurance or similar benefits; and

 

(ii)          as to vested and accrued benefits as of January 1, 2012 under the General Growth 401(k) Savings Plan and any other GGP Plan which is a pension or retirement plan.

 

(d)      Pre-existing Conditions; Coordination.  Subject to the requirements or limitations of applicable Law, Spinco shall, and shall cause each member of the Spinco Group to, waive limitations on benefits relating to any pre-existing conditions of the Business Employees and, to the extent applicable, Beneficiaries.

 

(e)      Vested Stock Options.  As of the Transfer Date Spinco shall assume all obligations and liabilities for stock options granted to Business Employees and Former Business Employees under the GGP Plans that were vested on or prior to the Transfer Date (the “Vested Options”).  Notwithstanding the foregoing, in the event that any Business Employee or Former Business Employee exercises a Vested Option prior to the ninetieth (90th) day following the Distribution Date, GGP shall reimburse Spinco for the cost to Spinco of the exercise of such Vested Option.

 

(f)       Unvested Stock Options and Restricted Shares.  As soon as practicable following the Distribution Date Spinco shall grant stock options to purchase common shares of Spinco (“Spinco Options”) and/or restricted common shares of Spinco (“Spinco Restricted Shares”) to each Business Employee who forfeited unvested stock options to purchase common shares of General Growth Properties, Inc. (“GGP Options”) and/or restricted common shares of General Growth Properties, Inc. (“GGP Restricted Shares”) as a result of the transactions contemplated by the Separation Agreement.  The number of Spinco Options and Spinco Restricted Shares to be granted shall be determined as follows with respect to each such Business Employee:

 

(i)             a number of Spinco Restricted Shares (rounded up to the nearest whole share) having a fair market value on the date of grant equal to the sum of (A) the fair market value of the forfeited GGP Restricted Shares and (B) the aggregate spread value of each forfeited GGP Option; and

 

(ii)          a number of Spinco Options such that on the date of grant of such Spinco Options the aggregate fair market value of the Spinco Restricted Shares and the shares subject to the Spinco Options equals the fair market value of the forfeited GGP Restricted Shares and the shares subject to the forfeited GGP Options.  The per share exercise price of the Spinco Options shall equal the fair market value of a common share of Spinco on the date of grant.

 

In addition, each Business Employee shall have received the shares of Spinco issued in respect of the GGP Restricted Shares (both vested and unvested) and the exercise price of the

 

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GGP Options shall have been reduced by the value of the Spinco shares that would have issued on the shares subject to the GGP Options on the Distribution Date (had such options been exercised).  For the avoidance of doubt, for purposes of determining the number of Spinco Options and Spinco Restricted Shares to be granted to each Business Employee, (A) the value of any shares of Spinco distributed with respect to the GGP Restricted Shares shall be disregarded when determining the fair market value of the GGP Restricted Shares and (B) any adjustments made to the exercise price of the GGP Options in connection with the transactions contemplated by the Separation Agreement shall be taken in to account when determining the aggregate spread value of the forfeited GGP Options.

 

(g)      COBRA.  Unless otherwise agreed in writing by the Parties, as of the January 1, 2012 or such later date as may be agreed to by the Parties pursuant to Section 3(c) hereof, Spinco shall, or shall cause a member of the Spinco Group to, assume all obligations to provide continuation health care coverage in accordance with COBRA to all Business Employees and Former Business Employees and their qualified Beneficiaries who incur or incurred a qualifying event at any time, including all obligations with respect to all health claims incurred on or after such date.

 

SECTION 4.           Reimbursement of Costs.

 

(a)      Except as set forth in Section 4(b) below, Spinco shall reimburse GGP for all amounts actually paid by any member of the GGP Group on and after the Transfer Date (including allocations of actual estimated annual expenses, consistent with past practice) (i) with respect to the Business Employees and Former Business Employees, to the extent not paid directly by Spinco, and (ii) in connection with the provision of coverage for Business Employees and Former Business Employees under the GGP Plans listed on Schedule D hereto (including insurance premiums, claims and costs of administration).  Such amounts shall be paid via wire transfer of immediately available funds into a bank account designated by GGP promptly and in no event later than thirty (30) days following GGP’s delivery of an invoice of such expenses.

 

(b)      GGP shall reimburse Spinco for all amounts actually paid by any member of the Spinco Group (i) with respect to any Vested Options exercised during the ninety (90) day period immediately following the Distribution Date in accordance with Section 3(e) hereof and (ii) with respect to any 2011 annual cash bonuses, commissions as well as accrued and unpaid wages, paid to Business Employees in accordance with Section 2(b) hereof.  Such amounts shall be paid via wire transfer of immediately available funds into a bank account designated by Spinco promptly and in no event later than thirty (30) days following Spinco’s delivery of an invoice of such expenses.

 

SECTION 5.           Obligations Net of Insurance Proceeds and Other Amounts.

 

(a)      The amount which Spinco is required to pay under this Agreement will be reduced by any Insurance Proceeds theretofore actually recovered in respect of the related Liability.  If a Party receives a payment (an “Indemnity Payment”) required by this Agreement from Spinco in respect of any Liability and subsequently receives Insurance Proceeds, then such Party will pay to Spinco an amount equal to such Insurance Proceeds but not exceeding the amount of the Indemnity Payment paid by Spinco in respect of such Liability.

 

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(b)      An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto.  GGP shall use its commercially reasonable efforts to seek to collect or recover any Insurance Proceeds (other than Insurance Proceeds under an arrangement where future premiums are adjusted to reflect prior claims in excess of prior premiums) to which GGP is entitled in connection with any Liability for which GGP seeks indemnification pursuant to this Agreement; provided, that GGP’s inability to collect or recover any such Insurance Proceeds shall not limit Spinco’s obligations hereunder.

 

(c)      Any Indemnity Payment under this Agreement shall be increased to take into account any inclusion in income of GGP arising from the receipt of such Indemnity Payment and shall be decreased to take into account any reduction in income of GGP arising from such indemnified Liability.  For purposes hereof, any inclusion or reduction shall be determined (i) using the highest marginal rates in effect at the time of the determination and applicable to a corporate resident of Chicago, Illinois and (ii) assuming that GGP, including any entity that qualifies as a real estate investment trust, will be liable for Taxes at such rate and has no Tax Attributes at the time of the determination.

 

SECTION 6.           Impermissibility; Good Faith.

 

In the event that any provision hereof is not permissible under any Law or practice, the parties agree that they shall in good faith take such actions as are permissible under such Law or practice to carry out to the fullest extent possible the purposes of such provision.

 

SECTION 7.           Restrictive Covenants Relating to Employees.

 

(a)      Non-Solicitation by GGP.  GGP and members of the GGP Group shall not, directly or indirectly, induce or attempt to induce any Business Employee to leave the employ of the Spinco Group (or any member thereof), or solicit, recruit, or attempt to solicit or recruit any Business Employee.  The foregoing covenant in the immediately preceding sentence shall apply for a period of two years following the Distribution Date.

 

(b)      Non-Solicitation by Spinco.  Spinco and members of the Spinco Group shall not, directly or indirectly, induce or attempt to induce to leave the employ of the GGP Group any employee of the GGP Group not identified on Schedule A.  The foregoing covenant shall apply for a period of one year following the Distribution Date and for any employee working on a transition services agreement project, apply for a period of one year from the date of termination of his or her performance of transition services, regardless of the length of time on the project.

 

(c)      Exceptions.  Notwithstanding the limitations in this Section 7 applicable to employees of the GGP Group or the Spinco Group (collectively, the “Restricted Employees”), such limitations will not prohibit the GGP Group or the Spinco Group from:  (i) attempting to hire or hiring any Restricted Employee after the termination of such employee’s employment at any time after the Effective Time by the GGP Group or the Spinco Group, as the case may be, (ii) placing public advertisements or conducting any other form of general solicitation that is not specifically targeted towards the Restricted Employees, including the use of an independent employment agency or search firm whose efforts are not specifically directed at Restricted

 

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Employees, and hiring any Restricted Employee that responds to such solicitation or (iii) soliciting and hiring specifically identified Restricted Employees with the prior agreement of the other Party.

 

SECTION 8.           Cooperation and Assistance.

 

(a)      Mutual Cooperation.  After the Effective Time, to the extent permitted by Law, each of Spinco and GGP shall, and shall cause the Spinco Group and the GGP Group, respectively, to, provide to the other Party such current information regarding the Business Employees or Former Business Employees, and their Beneficiaries, on an ongoing basis upon any reasonable request, as may be necessary to facilitate determinations of eligibility for, and payments of benefits to, the Business Employees and Former Business Employees and their Beneficiaries.

 

(b)      Claims Assistance.  To the extent permitted by Law, each of Spinco and GGP shall, and shall cause the Spinco Group and the GGP Group, respectively, to, permit their respective employees to provide, at the other Party’s expense, such reasonable assistance to the other Party as may be required in respect of claims (whether asserted or threatened) against the GGP Group or the Spinco Group, respectively, other than with respect to claims by the other Party, to the extent that (i) such employee has particular knowledge of relevant facts or issues or (ii) such employee’s assistance is reasonably necessary in respect of any such claim.

 

(c)      Consultation with Employee Representative Bodies.  The parties hereto shall, and shall cause their respective Affiliates to, mutually cooperate in undertaking all reasonably necessary or legally required provision of information to, or consultations, discussions or negotiations with, employee representative bodies (including any unions) which represent employees affected by the transactions contemplated by this Agreement.

 

SECTION 9.     Employment Files.

 

As of the Transfer Date, to the extent permitted by HIPAA and other applicable law, GGP shall, and shall cause the GGP Group to provide to Spinco all employment files of the Business Employees and Former Business Employees; provided, that, GGP and the GGP Group shall not transfer any performance evaluations relating to the Transferred Employees.  GGP and the GGP Group may retain copies of any employment files transferred to Spinco.

 

SECTION 10.   Employee Data Protection.

 

(a)      “Personal Data” includes:  (i) any information relating to an identified or identifiable natural person who is an employee of GGP or any of its Affiliates and that (A) is obtained by the Spinco Group from GGP or any of its Affiliates or representatives, (B) is processed by the Spinco Group on behalf of the GGP Group, or (C) is created by the Spinco Group based on (A) or (B) above, and (ii) any information relating to an identified or identifiable natural person who is an employee of Spinco or any of its Affiliates and that (A) is in the GGP Group’s possession, custody or control as of the Effective Time, (B) is obtained by the GGP Group from Spinco or any of its Affiliates or representatives, (C) is processed by the GGP Group on behalf of the Spinco Group, or (D) is created by the GGP Group based on (A), (B), or (C) above.

 

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(b)      Spinco shall, and shall cause the Spinco Group to, and GGP shall, and shall cause the GGP Group to, comply with all applicable Laws regarding the maintenance, use, sharing or processing of the other Party’s Personal Data, including, but not limited to:  (i) compliance with any applicable requirements to provide notice to, or obtain consent from, the data subject for processing of the data after the Effective Time, and (ii) taking any other steps necessary to ensure compliance with data protection Laws, including but not limited to, the execution of any separate agreements with the other Party to facilitate the lawful processing of certain Personal Data (such agreements to be executed before or after the Effective Time, as necessary).

 

(c)      Spinco shall, and shall cause the Spinco Group to, and GGP shall, and shall cause the GGP Group to, share and otherwise process the other Party’s Personal Data only on a need-to-know basis, only as legally permitted and to the extent necessary to perform its obligations under the Separation Agreement and the Ancillary Documents or to process benefits under applicable employee benefit plans.  Each of Spinco and GGP agrees that it shall not otherwise disclose any of the other Party’s Personal Data to third parties without the express written approval of the other Party unless required by applicable Law.  Each of Spinco and GGP shall use reasonable, technical and organizational measures to ensure the security and confidentiality of the other Party’s Personal Data in order to prevent, among other things, accidental, unauthorized or unlawful destruction, modification, disclosure, access or loss.  Each of Spinco and GGP shall promptly inform the other Party of any breach of this security and confidentiality undertaking, unless prohibited from doing so by Law or at the request of a Governmental Authority.

 

SECTION 11.       Miscellaneous.

 

(a)      No Third-Party Beneficiaries.  All provisions contained in this Agreement are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including, without limitation, any Business Employees, Former Business Employees, any Beneficiary or any participant in any GGP Plan.  Nothing in this Agreement shall amend any GGP Plan.

 

(b)      No Rights to Continued Employment or Change in At-Will Status.  Neither Spinco nor any member of the Spinco Group shall be obligated to employ any employee of GGP or any of its Affiliates or the Spinco Group, or continue to employ any Business Employee for any specific period of time, subject to applicable Law and the Employee Agreements.

 

(c)      No Limitation on Ability to Amend Plans.  Except as expressly set forth in this Agreement, nothing in this Agreement or in the Separation Agreement or Ancillary Documents shall require any member of the Spinco Group, or any of Spinco’s Affiliates, to continue or amend any particular benefit plan after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and applicable Law.

 

(d)      Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all other conditions and provisions of this Agreement shall remain in full force and effect.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties to

 

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this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible.

 

(e)      Assignment.  This Agreement shall not be assigned by either party without the prior written consent of the other party.  Notwithstanding the foregoing, either party may assign (i) any or all of its rights and obligations under this Agreement to any of its Subsidiaries and (ii) any or all of its rights and obligations under this Agreement in connection with a sale or disposition of any assets or entities or lines of business; provided, however, that, in each case, no such assignment shall (i) release the assigning party from any liability or obligation under this Agreement or (ii) change any of the steps in the Spinoff Plan or the Plan.

 

(f)       Amendment.  No provision of this Agreement may be amended or modified except by a written instrument signed by all the parties to this Agreement.  No waiver by any party of any provision of this Agreement shall be effective unless explicitly set forth in writing and executed by the party so waiving.  The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.

 

(g)      Counterparts.  This Agreement may be executed in one or more counterparts, and by the different parties to each such agreement in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) shall be as effective as delivery of a manually executed counterpart of any such Agreement.

 

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be signed as of the date first above written.

 

	
 
    	
GENERAL   GROWTH MANAGEMENT, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
GGP   LIMITED PARTNERSHIP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ROUSE   PROPERTIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Schedule A — GGP Employees(1)

 

(1)  To come.

 

 

Schedule B - Employee Agreements (2)

 

(2)  To come.

 

 

Schedule C — Former Business Employees(3)

 

(3)  To come.

 

 

Schedule D — GGP Welfare Plans(4)

 

[Medical Plan (self-insured), including Express Scripts prescription coverage]

 

[Aetna Dental]

 

[Vision Service Plan]

 

[Hartford Basic Life/AD&D]

 

[Hartford Supplemental and Dependent Life and Voluntary AD&D]

 

[Hartford Long Term Disability]

 

[Short Term Disability (self-insured)]

 

[CAN Long Term Care Insurance]

 

[Cigna Business Travel Accident Insurance]

 

[Employee Assistance Program]

 

(4)  To come.QuickLinks
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  Exhibit 10.1    
    

 TERMINATION BENEFITS AGREEMENT  

        THIS TERMINATION BENEFITS AGREEMENT ("AGREEMENT") is dated as of
                                     (the "EFFECTIVE DATE") by
and between Haynes International, Inc., a Delaware corporation (the "COMPANY"), and                         , an individual
residing in the State of
                         (the "EMPLOYEE"). 

WITNESSETH 

        WHEREAS,
the Board of Directors of the Company (the "BOARD") has determined that it is in the best interests of the Company and its shareholders for the
Company to agree to provide benefits under circumstances described below to the Employee in connection with employment by the Company and due to Employee's responsibility for policy-making functions
within the Company and in exchange for the Employee's agreements in Sections 6 and 7 hereof; 

        NOW,
THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Employee agree as follows: 

AGREEMENT 

        1.     TERM
OF AGREEMENT.    This Agreement shall commence as of the Effective Date and shall continue in effect until
                                    ;
provided, however, that commencing on
                                     (the "RENEWAL DATE") and
on each two-year anniversary thereafter, the term of this Agreement shall
automatically be extended for two (2) years (until the two-year anniversary of the Renewal Date next following) unless either the Company or the Employee shall have given written notice to
the other at least sixty (60) days prior thereto that the term of this Agreement shall not be so extended (the "TERM"). 

        2.     TERMINATION
BENEFITS. 

	a.
	If,
during the Term of this Agreement, the Employee's employment with the Company shall be terminated, the Employee shall be entitled to receive the
following compensation and benefits (in addition to any compensation and benefits provided for under any of the Company's employee benefit plans, policies and practices or as required by
law):

	i.
	TERMINATION
WITHOUT CAUSE, FOR GOOD REASON, OR DUE TO DISABILITY OR DEATH.    If the Employee's employment with the Company shall be terminated by
the Company without Cause, by the Employee for Good Reason, or by reason of the Employee's Disability or death:

	1.
	the
Employee or the Employee's heirs, estate, personal representative or legal guardian, as appropriate, shall be entitled to receive a lump sum cash payment
equal to the sum of:

	a.
	the
Employee's accrued but unpaid Base Salary through the Date of Termination;

	b.
	any
accrued but unpaid compensation, including but not limited to any unpaid bonus compensation and reimbursement, in accordance with the then prevailing
reimbursement practices of the Company, for all reasonable and customary business expenses incurred by the Employee in connection with his employment by the Company as of the Date of Termination; and

	c.
	a
bonus for the fiscal year in which the Date of Termination occurs in an amount equal to the Employee's target bonus for such fiscal year under the bonus or
incentive compensation plan maintained by the Company, calculated as if the Employee earned one hundred percent (100%) of such target bonus (the "SEVERANCE BONUS"), multiplied by a fraction, the
numerator of which is the 

number
of days the Employee worked in the fiscal year in which the Date of Termination occurs and the denominator of which is three hundred sixty five (365); and  

	2.
	

	a.
	on
a termination of employment by the Company without Cause or by the Employee for Good Reason, any unvested stock options held by the Employee will
terminate immediately and all vested stock options held by the Employee will remain exercisable for six (6) months following the Date of Termination, but in no event later than the expiration date of
the stock options as specified in the applicable grant letter, and

	b.
	upon
a termination of employment by reason of the Employee's Disability or death, any unvested stock options held by the Employee will vest immediately and
all options held by the Employee will remain exercisable for six (6) months from the Date of Termination, but in no event later than the expiration date of such stock options as specified in the
applicable grant letter.

	ii.
	TERMINATION
FOR CAUSE, WITHOUT GOOD REASON, OR DUE TO RETIREMENT.    If the Employee's employment with the Company shall be terminated by the
Company for Cause, by the Employee without Good Reason, or by reason of the Employee's Retirement:

	1.
	the
Employee shall be entitled to receive a lump sum cash payment equal to the sum of:

	a.
	the
Employee's accrued but unpaid Base Salary through the Date of Termination; and

	b.
	any
accrued but unpaid compensation, including but not limited to any unpaid bonus compensation and reimbursement, in accordance with the then prevailing
reimbursement practices of the Company, for all reasonable and customary business expenses incurred by the Employee in connection with his employment by the Company as of the Date of Termination; and

	2.
	

	a.
	upon
a termination of employment by the Company for Cause or by the Employee without Good Reason, all vested and unvested stock options held by the Employee
shall terminate immediately, and

	b.
	upon
the Employee's Retirement, all unvested stock options held by the Employee shall terminate immediately and any vested stock options held by the Employee
shall remain exercisable for six (6) months following the Date of Termination but in no event later than the expiration date of such stock options as specified in the applicable grant letter.

	iii.
	TERMINATION
WITHOUT CAUSE OR FOR GOOD REASON FOLLOWING A CHANGE IN CONTROL.    If the Employee's employment with the Company shall be terminated
by the Company without Cause or by the Employee for Good Reason within twelve (12) months following a Change in Control and during the Term of this Agreement (including any extensions or deemed
extensions thereof as provided in SECTION 1 above):

	1.
	the
Employee shall be entitled to receive a lump sum cash payment equal to the sum of:

	a.
	the
Employee's accrued but unpaid Base Salary through the Date of Termination;

	b.
	the
Employee's Base Salary that would be payable for the period from the Date of Termination through the first (1st) anniversary thereof (the "SEVERANCE
PERIOD"); 

	c.
	any
accrued but unpaid compensation, including but not limited to any unpaid bonus compensation and reimbursement, in accordance with the then prevailing
reimbursement practices of the Company, for all reasonable and customary business expenses incurred by the Employee in connection with his employment by the Company as of the Date of Termination; and

	d.
	the
Severance Bonus;

	2.
	any
unvested stock options held by the Employee will vest immediately and all stock options held by the Employee will remain exercisable for one (1) year
from the Date of Termination, but in no event later than the expiration date of the stock options as specified in the applicable grant letter; and

	3.
	

	a.
	Continued
Health Benefits.    The Employee (and his or her eligible dependents) may be entitled to elect to continue
medical, hospitalization and dental coverage under the Company's group medical, hospitalization and dental benefit plans on a self-pay basis in accordance with the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"). If the Employee is eligible and timely elects COBRA coverage for himself or herself and/or his or her eligible dependents, during the Severance
Period, the Employee shall continue to receive the medical, hospitalization and dental coverage in effect on the date of the Employee's Date of Termination for himself or herself and, where
applicable, his or her spouse and dependents, at the same premium rates as may be charged from time to time to similarly situated employees of the Company generally, as if the Employee had continued
in employment during such period; provided, however, that in order to receive such subsidized continued coverage, the Employee shall be required to pay to the Company (or its designee) at the same
time that premium payments are due for the month an amount equal to the full monthly premium payments required for such COBRA coverage. The Company shall reimburse the Employee monthly the premium
amount paid by the Employee, less the premium rate charged to similarly situated active employees for such coverage (the "Health Payment"), no later than the next payroll date of the Company that
occurs after the date the premium for the month is paid by the Employee. In addition, on each date on which the monthly Health Payments are made, the Company shall pay to the Employee an additional
amount equal to the assumed federal, state and local income and payroll taxes that the Employee incurs on each monthly Health Payment, which the Parties agree shall equal forty percent (40%), with the
additional amount determined by subtracting the amount of the Health Payment from the quotient of the Health Payment divided by sixty percent (60%) (the "Health Gross-up Payment"). The
COBRA health continuation period under section 4980B of the Code shall run concurrently with the period of continued health coverage following the Employee's Date of Termination. The Health
Payment paid to the Employee during the period of time during which the Employee would be entitled to continuation coverage under the Company's group health plan under COBRA is intended to qualify for
the exception from deferred compensation as a medical benefit provided in accordance with the requirements of Treas. Reg. §1.409A-1(b)(9)(v)(B). The Health Payment and the
Health Gross-up Payment shall be reimbursed to the Employee in a manner that complies with the requirements of Treas. Reg. §1.409A-3(i)(1)(iv). Notwithstanding the
foregoing, the Company's obligation to pay a monthly Health Payment to the Employee shall cease on the date when the Employee becomes eligible for such coverage offered by another employer. All other
provisions of the Employee's (and his or her covered eligible dependents') COBRA coverage (including, without limitation, any applicable co-payments, deductibles and other
out-of-pocket expenses) will be in 

accordance
with the applicable plan in effect for similarly situated active employees of the Company or an affiliate, as applicable.  

	b.
	Continued
Life Insurance Benefits.    The Employee shall be entitled to receive a lump sum cash payment in an amount
equal to the cost the Company would have incurred for non-voluntary life insurance coverage under its life insurance plan for the twelve (12) months following the Employee's Date of
Termination (had the Employee remained employed for such period), in excess of the then current aggregate premium or other amount payable generally by similarly situated plan participants for such
coverage (the "Life Insurance Payment"). In addition, the Company shall pay to the Employee an additional amount equal to the federal, state and local income and payroll taxes that the Employee incurs
on such payment, which the Parties agree shall equal forty percent (40%), with the additional amount determined by subtracting the amount of the Life Insurance Payment from the quotient of the Life
Insurance Payment divided by sixty percent (60%) (the "Life Insurance Gross-up Payment").

	b.
	The
Employee shall not be required to mitigate the amount of any payment provided for in this SECTION 2 by seeking other employment or otherwise, nor,
except as provided in SECTION 2(a)(iii)(3)(a) above, shall the amount of any payment or benefit provided for in SECTION 2 be reduced by any compensation earned by the Employee or benefit
made available to the Employee as the result of employment by another employer after the Date of Termination or otherwise.

	c.
	For
purposes of this Agreement, the following definitions shall apply:

	i.
	"DISABILITY"
means the Employee is totally and permanently disabled as defined in the Haynes International, Inc. Pension Plan.

	ii.
	"RETIREMENT"
means the voluntary retirement of the Employee after having reached age fifty-five (55) and having completed at least five
(5) years of service with the Company, but in no event prior to
                                    .

	iii.
	A
termination for "CAUSE" means a termination by reason of the good faith determination of the Company's Board of Directors (the "BOARD") that the Employee
(1) continually failed to substantially perform his duties with the Company (other than a failure resulting from the Employee's medically documented incapacity due to physical or mental
illness), including, without limitation, repeated refusal to follow the reasonable directions of the Company's Chief Executive Officer, knowing violation of the law in the course of performance of the
Employee's duties with the Company, repeated absences from work without a reasonable excuse, or intoxication with alcohol or illegal drugs while on the Company's premises during regular business
hours, (2) engaged in conduct which constituted a material breach of SECTION 6 or SECTION 7 of this Agreement, (3) was indicted (or equivalent under applicable law),
convicted of, or entered a plea of nolo contendere to the commission of a felony or crime involving dishonesty or moral turpitude, (4) engaged in conduct which is demonstrably and materially
injurious to the financial condition, business reputation, or otherwise of the Company or its subsidiaries or affiliates, or (5) perpetuated a fraud or embezzlement against the Company or its
subsidiaries or affiliates, and in each case the particular act or omission was not cured, if curable, in all material respects by the Employee within thirty (30) days after receipt of written notice
from the Board which shall set forth in reasonable detail the nature of the facts and circumstances which constitute Cause. Notwithstanding the foregoing, the Employee shall not be deemed to have been
terminated for Cause unless there shall have been delivered to the Employee a copy of a resolution duly adopted by the Board. If the Company has reasonable belief that the Employee has committed any
of the acts described above, it may suspend the Employee (with or without pay) while it investigates whether it has or could have Cause to terminate the Employee. The Company may terminate the
Employee for Cause prior to the 

completion
of its investigation; provided, that, if it is ultimately determined that the Employee has not committed an act which would constitute Cause, the Employee shall be treated as if he were
terminated without Cause.  

	iv.
	A
"NOTICE OF TERMINATION" means a notice which shall indicate the specific termination provision in this Agreement which is applicable and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee's employment under the provision so indicated. For purposes of this Agreement, no such
purported termination shall be effective without such Notice of Termination. Any purported termination by the Company or by the Employee shall be communicated by written notice of termination to the
other party hereto in accordance with SECTION 6 hereof.

	v.
	"DATE
OF TERMINATION" means (i) if the Employee's employment is terminated for Disability, thirty (30) days after Notice of Termination is given
(provided that the Employee shall not have returned to the performance of his duties on a full-time basis during such thirty (30) day period), and (ii) if the Employee's employment
is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination without Cause shall not be less than thirty (30) days from the date such Notice
of Termination is given); provided that if within thirty (30) days after any such Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, or by the final judgment,
order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been taken).

	vi.
	"BASE
SALARY" means the annual base salary of the Employee from the Company, but determined without regard to any salary reduction agreement of the Employee
under Sections 401(k) and 125 of the Internal Revenue Code of 1986, as amended (the "CODE"), (or corresponding provisions of subsequent federal income tax laws) or any salary deferral agreement
of the Employee under any non-qualified deferred compensation program that may be available to the Employee from time to time, and excludes (i) incentive or additional cash
compensation; (ii) any amounts included in income because of Sections 79 or 89 of the Code; and (iii) any amounts paid to the Employee for reimbursement for expenses or
discharging tax liabilities.

	vii.
	"GOOD
REASON" shall mean the occurrence, during the Term of this Agreement, of any of the following actions or failures to act, but in each case only if it
is not consented to by the Employee in writing: (i) a material adverse change in the Employee's duties, reporting responsibilities, titles or elected or appointed offices as in effect
immediately prior to the effective date of such change; or (ii) a material reduction by the Company in the Employee's Base Salary or annual bonus opportunity in effect immediately prior to the
effective date of such reduction, not including any reduction resulting from changes in the market value of securities or other instruments paid or payable to the Employee. For purposes of this
definition, none of the actions described in clauses (i) and (ii) above shall constitute "Good Reason" with respect to the Employee if it was an isolated and inadvertent action not taken
in bad faith by the Company and if it is remedied by the Company within thirty (30) days after receipt of written notice thereof given by the Employee (or, if the matter is not capable of remedy
within thirty (30) days, then within a reasonable period of time following such thirty (30) day period, provided that the Company has commenced such remedy within said thirty (30) day period);
provided, that "GOOD REASON" shall cease to exist for any action described in clauses (i) and (ii) above on the sixtieth (60th) day following the later of the occurrence of such action
or the Employee's knowledge thereof, unless the Employee has given the Company written notice thereof prior to such date. 

	viii.
	"CHANGE
IN CONTROL" shall mean the first to occur of the following: (i) any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing a majority of the combined voting power of the Company's then outstanding securities (assuming conversion of all outstanding non-voting securities
into voting securities and the exercise of all outstanding options or other convertible securities); (ii) the following individuals cease for any reason to constitute a majority of the number
of directors then serving: individuals who, on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for
election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on
the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; (iii) there is consummated a merger or consolidation of the Company or
any direct or indirect subsidiary of the Company with any other corporation other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent, either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof, a
majority of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (y) a merger
or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing a majority of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, or to an entity a majority of the
combined voting power of the voting securities of which is owned by substantially all of the stockholders of the Company immediately prior to such sale in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

	ix.
	"BENEFICIAL
OWNER" shall have the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

	x.
	"PERSON"
shall, except for purposes of SECTION 8 of this Agreement, have the meaning given in Section 3(a)(9) of the Securities Exchange Act of
1934, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (1) the Company or any subsidiary of the Company, (2) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (3) an underwriter temporarily holding securities pursuant to an offering of such securities
or (4) a corporation owned, directly or indirectly, by substantially all of the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. 

        3.     SUCCESSORS;
BINDING AGREEMENT. 

	a.
	This
Agreement shall be binding on the Company and any successor to all or substantially all of its business or assets. Without limiting the effect of the
prior sentence, the Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets
of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment
had taken place. As used in this Agreement, the "COMPANY" shall mean the Company as hereinbefore defined and any successor or assign to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement or which is otherwise obligated under this Agreement by the first sentence of this SECTION 3, by operation of law or otherwise. 

	b.
	This
Agreement shall inure to the benefit of and be enforceable by the Employee's personal and legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees. If the Employee should die while any amounts would still be payable to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to the Employee's devisee, legatee or other designee or if there is no such devisee, legatee or designee, to the
Employee's estate. 

        4.     TIMING
OF PAYMENT AND RELEASE. 

	a.
	As
a condition of receiving from the Company the payments and benefits provided for hereunder, which the Employee otherwise would not be entitled to receive,
the Employee understands and agrees that, on the Date of Termination, he will be required to execute a release of all claims against the Company in substantially the form attached hereto as
EXHIBIT 1 (the "RELEASE") as may be modified by the Company in good faith to reflect changes in law or its employment practices. The Employee acknowledges that he has been advised in writing to
consult with an attorney prior to executing the Release. The Employee agrees that he will consult with his attorney prior to executing the Release. The Employee and the Company agree that the Employee
has a period of seven (7) days following the execution of the Release within which to revoke the Release. The parties also acknowledge and agree that the Release shall not be effective or enforceable
until the seven (7) day revocation period expires. The date on which this seven (7) day period expires shall be the effective date of the Release (the "RELEASE EFFECTIVE DATE").

	b.
	The
Company shall make all payments required under this Agreement within five (5) business days following the Release Effective Date.

	c.
	The
Employee understands that as used in this SECTION 4, the "COMPANY" includes its past, present and future officers, directors, trustees,
shareholders, employees, agents, subsidiaries, affiliates, distributors, successors, and assigns, any and all employee benefit plans (and any fiduciary of such plans) sponsored by the Company, and any
other persons related to the Company.

	d.
	Notwithstanding
anything in this Agreement to the contrary, this Agreement shall not affect the Company's right or ability to terminate the employment of the
Employee, subject to any other written contract between the Company and the Employee to the contrary.

	e.
	The
Employee agrees that execution and delivery to the Company of any release or disclaimer agreement requested by the Company which is consistent with the
provisions of this SECTION 4 and the passage of all necessary waiting periods in connection therewith shall be a condition to the receipt of any payment or benefits to be provided by the
Company following the termination of the Employee's employment with the Company. 

        5.     NOTICES.    For
the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to
have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, or by expedited (overnight) courier with established national reputation, shipping
prepaid or billed to sender, in either case addressed to the respective addresses last given by each party to the other (provided that all notices to the Company shall be directed to the attention of
the Board with a copy to the Secretary of the Company) or to such other address as either party may have furnished to the other in writing in accordance herewith. All notices and communication shall
be deemed to have been received on the date of delivery thereof, on the third business day after the mailing thereof, or on the second day after deposit thereof with an expedited courier service,
except that notice of change of address shall be effective only upon receipt. 

        6.     CONFIDENTIALITY.    For
purposes of this SECTION 6, the term "COMPANY" shall include, in addition to the Company, its affiliates, subsidiaries and any of
their respective predecessors, successors and assigns. The term "COMPANY'S BUSINESS" shall mean the business of developing, manufacturing, 

selling
or distributing high-performance alloys for service in severe corrosion and high temperature applications. 

	a.
	CONFIDENTIAL
INFORMATION.    As used in this Agreement, "CONFIDENTIAL INFORMATION" means any and all confidential, proprietary or other
information, whether or not originated by the Employee or the Company, which is in any way related to the past or present Company's Business and is either designated as confidential or not generally
known by or available to the public. Confidential Information includes, but is not limited to (whether or not reduced to writing or designated as confidential) (i) information regarding the
Company's existing and potential customers and vendors; (ii) any contacts (including the existence and contents thereof and parties thereto) to which the Company is a party or is bound;
(iii) information regarding products and services being purchased or leased by or provided to the Company; (iv) information received by the Company from third parties under an obligation
of confidentiality, restricted, disclosure or restricted use; (v) personnel and financial information of the Company; (vi) information with respect to the Company's products, services,
facilities, business methods, systems, trade secrets, technical know-how, and other intellectual property; (vii) marketing and developmental plans and techniques, price and cost
data, forecasts and forecast assumptions, and potential strategies of the Company; and (viii) any other information relating to Company which was obtained by the Employee in connection with his
employment by the Company, whether before, on or after the Effective Date.

	b.
	NON-DISCLOSURE
AND NON-USE OF CONFIDENTIAL INFORMATION.    The Employee acknowledges that the Confidential Information of
the Company is a valuable, unique asset of the Company and the Employee's unauthorized use or disclosure thereof could cause irreparable harm to the Company for which no remedy at law could be
adequate. Accordingly, the Employee agrees that the Employee shall hold all Confidential Information of the Company in strict confidence and solely for the benefit of the Company, and that he shall
not, directly or indirectly, disclose or use or authorize any third party to disclose or use any Confidential Information, except (i) as required for the performance of the Employee's duties
hereunder, (ii) with the express written consent of the Company, (iii) to the extent that any such information is in or becomes in the public domain other than as a result of the
Employee's breach of any of his obligations hereunder, or (iv) where required to be disclosed by court order, subpoena or other government process and in such event, the Employee shall
cooperate with the Company in attempting to keep such information confidential. The Employee shall follow all Company policies and procedures to protect all Confidential Information and take any
additional precautions necessary to preserve and protect the use or disclosure of any Confidential Information at all times.

	c.
	OWNERSHIP
OF CONFIDENTIAL INFORMATION.    The Employee acknowledges and agrees that all Confidential Information is and shall remain the exclusive
property of the Company, whether or not prepared in whole or in part by the Employee and whether or not disclosed to or entrusted to the custody of the Employee. Upon the termination or resignation of
his employment by the Company, or at any other time at the request of the Company, the Employee shall promptly deliver to the Company all documents, tapes, disks, or other storage media and any other
materials, and all copies thereof in whatever form, in the possession of the Employee pertaining to the Company's Business, including, but not limited to, any containing Confidential Information.

	d.
	SURVIVAL.    The
Employee's obligations set forth in this SECTION 6, and the Company's rights and remedies with respect hereto, shall
indefinitely survive the termination of this Agreement and the Employee's employment by the Company, regardless of the reason therefor. 

        7.     RESTRICTIVE
COVENANTS.    For purposes of this SECTION 7, the term "COMPANY" shall include, in addition to the Company, its affiliates, subsidiaries and
any of their respective predecessors, successors and assigns. 

	a.
	NON-COMPETITION.    During
the Restricted Period and within the Restricted Area (each as defined in subsection (c) below), the
Employee shall not, directly or indirectly, perform on behalf of any Competitor (as defined in subsection (c) below) the same or similar services as those that the Employee performed for the
Company during the Employee's employment by the Company or otherwise. In addition, the Employee shall not, during the Restricted Period or within the Restricted Area, directly or indirectly engage in,
own, manage, operate, join, control, tend money or other assistance to, or participate in or be connected with (as an officer, director, member, manager, partner, shareholder, consultant, employee,
agent, or otherwise), any Competitor.

	b.
	NON-SOLICITATION.    During
the Restricted Period, the Employee shall not, directly or indirectly, for himself or on behalf of any
Person (as defined in subsection (c) below), (i) solicit or attempt to solicit any Customers (as defined in subsection (c) below) or prospective Customers with whom the Employee
had contact at any time during the Employee's employment by the Company; (ii) divert or attempt to divert any business of the Company to any other Person; (iii) solicit or attempt to
solicit for employment, endeavor to entice away from the Company, recruit, hire, or otherwise interfere with the Company's relationship with, any Person who is employed by or otherwise engaged to
perform services for the Company (or was employed or otherwise engaged to perform services for the Company, as of any given time, within the immediately preceding twenty-four (24) month
period); (iv) cause or assist, or attempt to cause or assist, any employee or other service provider to leave the Company; or (v) otherwise interfere in any manner with the employment or
business relationships of the Company or the business or operations then being conducted by the Company.

	c.
	DEFINITIONS.    For
purposes of this SECTION 7, the following definitions have the following meanings:

	i.
	"COMPETITOR"
means any Person that engages in a business that is the same as, or similar to, the Company's Business.

	ii.
	"CUSTOMER"
means any Person which, as of any given date, used or purchased or contracted to use or purchase any services or products from the Company within
the immediately preceding twenty-four (24) month period.

	iii.
	"PERSON"
means any individual, corporation, partnership, joint venture, association, limited liability company, joint-stock company, trust, or
unincorporated organization, or any governmental agency, officer, department, commission, board, bureau, or instrumentality thereof,

	iv.
	"RESTRICTED
AREA" means, because the market for the Company's Business is global, or has the potential of being global, and is not dependent upon the
physical location or presence of the Company, the Employee, or any individual or entity that may be in violation of this Agreement, the broadest geographic region enforceable by law (excluding any
location where this type of restriction is prohibited by law) as follows: (A) everywhere in the world that has access to the Company's Business because of the availability of the Internet;
(B) everywhere in the world that the Employee has the ability to compete with the Company's Business through the Internet; (C) each state, commonwealth, territory, province and other
political subdivision located in North America; (D) each state, commonwealth, territory and other political subdivision of the United States of America; (E) Indiana and any state in
which the Employee has performed any services for the Company; (F) any geographical area in which the Company has performed any services or sold any products; (G) any geographical area
in which the Company or any of its subsidiaries have engaged in the Company's Business, which has resulted in aggregate sales revenues of at least $25,000 during any year in the five (5) year period
immediately preceding the commencement of the 

Restricted
Period; (H) any state or other jurisdiction where the Company had an office at any time during the Employee's employment by the Company; (I) within one hundred (100) miles of
any location in which the Company had an office at any time during the Employee's employment by the Company; and (J) within one hundred (100) miles of any location in which the Employee
provided services for the Company.  

	v.
	"RESTRICTED
PERIOD" means the period of time during Employee's employment by the Company plus a period of twelve (12) months from the Date of Termination. In
the event of a breach of this Agreement by the Employee, the Restricted Period will be extended automatically by the period of the breach.

	d.
	SURVIVAL.    The
Employee's obligations set forth in this SECTION 7, and the Company's rights and remedies with respect thereto, will remain
in full force and effect during the Restricted Period and until full resolution of any dispute related to the performance of the Employee's obligations during the Restricted Period.

	e.
	PUBLIC
COMPANY EXCEPTION.    The prohibitions contained in this SECTION 7 do not prohibit the Employee's ownership of stock which is
publicly traded, provided that (1) the investment is passive, (2) the Employee has no other involvement with the company, (3) the Employee's interest is less than five percent
(5%) of the shares of the company, and (4) the Employee makes full disclosure to the Company of the stock at the time that the Employee acquires the shares of stock. 

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

        9.     REASONABLENESS.    The
Employee has carefully considered the nature, extent and duration of the restrictions and obligations contained in this Agreement,
including, without limitation, the geographical coverage contained in SECTION 7 and the time periods contained in SECTION 6 and SECTION 7, and acknowledges and agrees that such
restrictions are fair and reasonable in all respects to protect the legitimate interests of the Company and that these restrictions are designed for the reasonable protection of the Company's
Business. 

        10.   REMEDIES.    The
Employee recognizes that any breach of this Agreement shall cause irreparable injury to the Company, inadequately compensable in monetary
damages. Accordingly, in addition to any other legal or equitable remedies that may be available to the Company, the Employee agrees that the Company shall be able to seek and obtain injunctive relief
in the form of a temporary restraining order, preliminary injunction, or permanent injunction, in each case without notice or bond, against the Employee to enforce this Agreement. The Company shall
not be required to demonstrate actual injury or damage to obtain injunctive relief from the courts. To the extent that any damages are calculable resulting from the breach of this Agreement, the
Company shall also be entitled to recover damages, including, but not limited to, any lost profits of the Company and/or its affiliates or subsidiaries. For purposes of this Agreement, lost profits of
the Company shall be deemed to include all gross revenues resulting from any activity of the Employee in violation of this Agreement and all such revenues shall be held in trust for the benefit of the
Company. Any recovery of damages by the Company shall be in addition to and not in lieu of the injunctive relief to which the Company is entitled. In no event will a damage 

recovery
be considered a penalty in liquidated damages. In addition, in any action at law or in equity arising out of this Agreement, the prevailing party shall be entitled to recover, in addition to
any damages caused by a breach of this Agreement, all costs and expenses, including, but not limited to, reasonable attorneys' fees, expenses, and court costs incurred by such party in connection with
such action or proceeding. Without limiting the Company's rights under this SECTION 10 or any other remedies of the Company, if a court of competent jurisdiction determines that the Employee
breached any of the provisions of SECTIONS 6 or 7 of this Agreement, the Company will have the right to cease making any payments or providing any benefits otherwise due to the Employee under
the terms and conditions of this Agreement. 

        11.   CLAIMS
BY THE EMPLOYEE.    The Employee acknowledges and agrees that any claim or cause of action by the Employee against the Company shall not constitute a
defense to the enforcement of the restrictions and covenants set forth in this Agreement and shall not be used to prohibit injunctive relief. 

        12.   MISCELLANEOUS.    No
provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Employee and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with,
any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof may have been made by either party which are not expressly set forth in this
Agreement. 

        13.   APPLICABLE
LAW AND FORUM.    This Agreement has been entered into in the State of Indiana and shall be governed by and construed in accordance with the laws of
the State of Indiana. The parties agree that any action in law or equity brought by either party arising from or in connection with this Agreement or arising from or in connection with the performance
by either party of its obligations hereunder shall be brought only in the United States District Court for the Southern District of Indiana, Indianapolis Division or the Circuit Court of Howard
County, Indiana, and the parties hereto consent to the jurisdiction of such forums. 

        14.   SEVERABILITY.    If
a court having proper jurisdiction holds a particular provision of this Agreement unenforceable or invalid for any reason, that provision
shall be modified only to the extent necessary in the opinion of such court to make it enforceable and valid and the remainder of this Agreement shall be deemed valid and enforceable and shall be
enforced to the greatest extent possible under the then existing law. In the event the court determines such modification is not possible, the provision shall be deemed severable and deleted, and all
other provisions of this Agreement shall remain unchanged and in full force and effect. 

        15.   ENFORCEABILITY
IN JURISDICTIONS.    The parties hereto intend to and hereby confer jurisdiction to enforce the covenants contained in SECTIONS 6 and 7
above upon the courts of any state within the geographical scope of such covenants. If the courts of any one or more of such states shall hold any of the previous covenants unenforceable by reason of
the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Company's rights to the relief provided above in the courts
of any other states within the geographical scope of such covenants, as to breaches of such covenants in such other respective jurisdictions, the above covenants as they relate to each state being,
for this purpose, severable into diverse and independent covenants. 

        16.   FAIR
DEALING.    The Employee acknowledges that the Company has negotiated this Agreement in good faith and has been fair in its dealing with the Employee. The
Employee shall not raise any defense and expressly waives any defense against the Company based upon any alleged breach of good faith or fair dealing by the Company in connection with this Agreement. 

        17.   ENTIRE
AGREEMENT; RELEASE.    This Agreement constitutes the entire agreement between the parties hereto, and, effective as of the Effective Date, supersedes
all prior agreements, understandings and arrangements, oral or written, between the parties hereto, with respect to the subject 

matter
hereof (including, but not limited to, the Severance Agreement). The Employee hereby unconditionally releases and discharges the Company from any and all claims, causes of action, demands,
lawsuits or other charges whatsoever, known or unknown, directly or indirectly related to the Severance Agreement arising prior to the Effective Date. 

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

        19.   COMPLIANCE
WITH SECTION 409A OF THE CODE 

	a.
	Compliance
with Section 409A of the Code.    Termination benefits under this Agreement are intended to be
exempt from section 409A of the Code under the "separation pay exception," to the maximum extent applicable. Any payments that qualify for the "short-term deferral" exception or
another exception under section 409A of the Code shall be paid under the applicable exception. This Agreement is intended to comply with section 409A of the Code and its corresponding
regulations and payments may only be made under this Agreement upon an event and in a manner permitted by section 409A of the Code, to the extent applicable.

	b.
	Specified
Employee.    Notwithstanding anything in this Agreement to the contrary, if required by section 409A
of the Code, if the Employee is considered a "specified employee" for purposes of section 409A of the Code and if payment of any amounts under this Agreement is required to be delayed for a
period of six (6) months after separation from service pursuant to section 409A of the Code, payment of such amounts shall be delayed as required by section 409A of the Code, and the
accumulated amounts shall be paid in a lump sum payment within ten (10) days after the end of the six-month period. If the Employee dies during the postponement period prior to the payment
of benefits, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of the Employee's estate within sixty (60) days after the date of the
Employee's death.

	c.
	Separation
from Service; Characterization of Payments.    All payments to be made upon a termination of employment
under this Agreement may only be made upon a "separation from service" under section 409A of the Code. All reimbursements and in-kind benefits provided under this Agreement shall be
made or provided in accordance with the requirements of section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during
the period of time specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible
for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year
following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit." 

        IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duty authorized officer and the Employee has executed this Agreement, each as of the Effective Date. 

 

 

					
	 	 	COMPANY

HAYNES INTERNATIONAL, INC.
	

 	
 	
 By:	
 	

 
	 	 	 Printed:	 	 Marcel Martin
	 	 	 Title:	 	 Vice President, Finance, CFO
	
ATTEST	
 	

 	
 	

 
	

  Secretary	
 	

 	
 	

 
	

 	
 	
EMPLOYEE
	

 	
 	

 
	

 	
 	
 Printed:	
 	

 
	
WITNESS	
 	

 	
 	

 
	

 	
 	

 	
 	

 

 

 

 EXHIBIT 1  

 RELEASE OF ALL CLAIMS  

        In consideration of receiving from Haynes International, Inc. (the "Company") the
payments and benefits provided for in that certain Termination Benefits Agreement dated as of                         ,
         (the "Agreement") between the Company and the undersigned (the
"Employee"), which payments and benefits the Employee was not otherwise entitled to receive, the Employee unconditionally releases and discharges the
Company from any and all claims, causes of action, demands, lawsuits or other charges whatsoever, known or unknown, directly or indirectly related to the Employee's employment or termination thereof
including any claims under any employee benefit plans of the Company, except for (i) a breach of the Company's obligations under the Agreement, (ii) any claims relating to, or rights of
the Employee appurtenant to, any vested benefits under any pension, retirement or similar plan maintained by the Company and (iii) the right of the Employee to elect continuation of group
medical and dental benefits for the Employee and his eligible dependents who are qualified beneficiaries under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"), at the Employee's expense, pursuant to COBRA. The claims or actions released herein include, but are not limited to, those based on
allegations of wrongful discharge, breach of contract, promissory estoppels, defamation, infliction of emotional distress, and those alleging discrimination on the basis of race, color, sex, religion,
national origin, age, disability, or any other basis, including, but not limited to, any claim or action under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Equal Pay Act of 1963, the Civil Rights Act of 1991, the Employee Retirement Income Security Act of 1974,
or any other federal, state, or local law, rule, ordinance, or regulation as presently enacted or adopted and as each may hereafter be amended. 

        With
respect to any claim that the Employee might have under the Age Discrimination in Employment Act, of 1967, as amended: 

          (i)  The
Employee does not waive rights or claims that may arise after the date of this Release of all Claims (the
"Release"); 

         (ii)  The
Employee's waiver of said rights or claims under the Age Discrimination in Employment Act of 1967 is in exchange for the consideration reflected in this Release; 

        (iii)  The
Employee acknowledges that he has been advised in writing to consult with an attorney prior to executing this Release; and 

        (iv)  The
Employee acknowledges that he has been given a period of at least twenty-one (21) days within which to consider this Release. At the Employee's option
and sole discretion, the Employee may waive the twenty-one (21) days. If the Employee elects to waive the twenty-one (21) day review period, the Employee acknowledges and
admits that he was given a reasonable period of time within which to consider this Release and his wavier is made freely and voluntarily, without duress or any coercion by any other person. 

        The
Employee and the Company agree that the Employee has a period of seven (7) days following the execution of this Release within which to revoke the Release. The parties also
acknowledge and agree that this Release shall not be effective or enforceable until the seven (7) day revocation period expires. The date on which this seven (7) day period expires shall be the
effective date of this Release. 

        The
Employee further agrees, in consideration of receiving the payments and benefits provided for in this Agreement, not to initiate or instigate any claims, causes of action or demands
against the Company in any way directly or indirectly related to the Employee's employment with the Company or the termination of his employment, except for a breach of the Company's obligations under
the Agreement or claims or rights of the Employee relating to any vested pension or retirement benefits, and the Employee agrees to reimburse, defend, and hold harmless the Company against any such
claims, causes of action or demands. 

        The
Employee understands that as used in this Release, "Company" includes its past, present and future officers, directors, trustees,
shareholders, employees, agents, subsidiaries, affiliates, distributors, successors, and assigns, any and all employee benefit plans (and any fiduciary of such plans) sponsored by the Company, and any
other persons related to the Company. 

[SIGNATURE PAGE FOLLOWS]  

        THE EMPLOYEE ACKNOWLEDGES THAT HE CAREFULLY HAS READ THIS RELEASE; THAT HE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING;
THAT HE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS RELEASE ARE THOSE STATED AND CONTAINED IN THIS RELEASE; AND THAT HE IS SIGNING THIS
RELEASE KNOWINGLY AND VOLUNTARILY. THE EMPLOYEE STATES THAT HE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS
BY SIGNING THIS RELEASE. 

 

 

							
	 	 	EMPLOYEE
	

 	
 	

 
	

 	
 	
Date:
	
WITNESS:	
 	

 	
 	

 	
 	

 
	

 	
 	

 	
 	

 	
 	

 
	

 	
 	
ACCEPTED AND ACKNOWLEDCGED:
	

 	
 	
 HAYNES INTERNATIONAL, INC.
	

 	
 	
 By:	
 	

 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	 	 	 	 	Date:	 	 

 

 

QuickLinks

Exhibit 10.1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00196-of-00352.parquet"}]]