Document:

Exhibit 10.34

 

OMNIVISION TECHNOLOGIES, INC.

 

2009 EMPLOYEE STOCK PURCHASE PLAN

 

1.             Purpose.  The purpose of the Plan is to provide
employees of the Company and its Designated Subsidiaries with an opportunity to
purchase Common Stock through accumulated payroll deductions.  This Plan includes two components: a Code Section 423
Plan Component and a Non-423 Plan Component. 
The Company’s intention is to have the Code Section 423 Plan
Component qualify as an “employee stock purchase plan” under Section 423
of the Code, (although the Company makes no undertaking or representation to
maintain such qualification).  The
provisions of the Code Section 423 Plan Component, accordingly, will be
construed so as to extend and limit participation in a uniform and nondiscriminatory
basis consistent with the requirements of Section 423 of the Code.  In addition, this Plan authorizes the grant
of options under the Non-423 Plan Component that do not qualify under Section 423
of the Code, pursuant to rules, procedures or sub-plans adopted by the
Administrator that are designed to achieve tax, securities laws or other
objectives for Eligible Employees and/or the Company.  Except as otherwise indicated, the Non-423
Plan Component will operate and be administered in the same manner as the Code Section 423
Plan Component.

 

2.             Definitions.

 

(a)           “Administrator” means the
Board or any Committee designated by the Board to administer the Plan pursuant
to Section 14.

 

(b)           “Applicable Laws” means the
requirements relating to the administration of equity-based awards under U.S.
state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or
quoted and the applicable laws of any foreign country or jurisdiction where
options are, or will be, granted under the Plan.

 

(c)           “Board” means the Board of
Directors of the Company.

 

(d)           “Change in Control” means the
occurrence of any of the following events:

 

(i)    Change in Ownership of the Company.  A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as
a group (“Person”), acquires ownership of the stock of the Company that,
together with the stock held by such Person, constitutes more than 50% of the
total voting power of the stock of the Company; or

 

(ii)   Change in Effective Control of the Company.  If the Company has a class of securities
registered pursuant to Section 12 of the Exchange Act, a change in the
effective control of the Company which occurs on the date that a majority of
members of the Board is replaced during any 12 month period by Directors whose
appointment or election is not endorsed by a majority of the members of the
Board prior to the date of the appointment or election.  For purposes of this clause (ii), if any
Person is considered to be in effective control of the Company, the acquisition
of additional control of the Company by the same Person will not be considered
a Change in Control; or

 

 

(iii)  Change in Ownership of a Substantial
Portion of the Company’s Assets.  A
change in the ownership of a substantial portion of the Company’s assets which
occurs on the date that any Person acquires (or has acquired during the 12
month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value
equal to or more than 50% of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition or acquisitions.  For purposes of this subsection (iii), gross
fair market value means the value of the assets of the Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets.

 

For
purposes of this Section 2(d), persons will be considered to be acting as
a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business
transaction with the Company.

 

Notwithstanding
the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code Section 409A,
as it has been and may be amended from time to time, and any proposed or final
Treasury Regulations and Internal Revenue Service guidance that has been
promulgated or may be promulgated thereunder from time to time.

 

Further
and for the avoidance of doubt, a transaction will not constitute a Change in
Control if: (i) its sole purpose is to change the state of the Company’s
incorporation, or (ii) its sole purpose is to create a holding company
that will be owned in substantially the same proportions by the persons who
held the Company’s securities immediately before such transaction.

 

(e)           “Code” means the Internal Revenue
Code of 1986, as amended.  Reference to a
specific section of the Code or Treasury Regulation thereunder will include
such section or regulation, any valid regulation or other official applicable
guidance promulgated under such section, and any comparable provision of any
future legislation or regulation amending, supplementing or superseding such
section or regulation.

 

(f)            “Code Section 423 Plan
Component” means the component of this Plan that is intended to meet the
requirements set forth in Section 423(b) of the Code, as
amended.  The provisions of the Code Section 423
Plan Component shall be construed, administered and enforced in accordance with
Section 423(b).

 

(g)           “Committee” means a committee
of the Board appointed in accordance with Section 14 hereof.

 

(h)           “Common Stock” means the
common stock of the Company.

 

(i)            “Company” means Omnivision
Technologies, Inc., a Delaware corporation, or any successor thereto.

 

(j)            “Compensation” means all cash
compensation reportable on Form W-2, including without limitation base
straight time gross earnings, sales commissions, payments for overtime, shift
premiums, incentive compensation, incentive payments, bonuses and other
compensation, but does not include any non-cash compensation.

 

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(k)           “Designated Subsidiary” means
any Subsidiary that has been designated by the Administrator from time to time
in its sole discretion as eligible to participate in the Plan. The
Administrator will determine whether employees of any Designated Subsidiary
shall participate in the Code Section 423 Plan Component or the Non-423
Plan Component.

 

(l)            “Director” means a member of
the Board.

 

(m)          “Eligible Employee” means any
individual who is a common law employee of the Company or a Designated
Subsidiary and is customarily employed for at least twenty (20) hours per week
and more than five (5) months in any calendar year by the Employer,
other than an employee of a Designated Subsidiary under the Non-423 Plan
Component, who, as of the Enrollment Date, resides in a country that has been
excluded from participation in the Plan or who, as of the Enrollment Date, is
otherwise determined ineligible for participation in the Non-423 Plan
Component, at the discretion of the Administrator.  For purposes of the Plan, the employment
relationship will be treated as continuing intact while the individual is on
sick leave or other leave of absence that the Employer approves.  Where the period of leave exceeds three (3) months
and the individual’s right to reemployment is not guaranteed either by statute
or by contract, the employment relationship will be deemed to have terminated
three (3) months and one (1) day following the commencement of such
leave.  The Administrator, in its
discretion, from time to time may, prior to an Enrollment Date for all options
to be granted on such Enrollment Date, determine (on a uniform and
nondiscriminatory basis for employees who may participate in the Code Section 423
Plan Component) that the definition of Eligible Employee will or will not
include an individual if he or she: (i) has not completed at least two (2) years
of service since his or her last hire date (or such lesser period of time as
may be determined by the Administrator in its discretion), (ii) customarily
works not more than twenty (20) hours per week (or such lesser period of time
as may be determined by the Administrator in its discretion), (iii) customarily
works not more than five (5) months per calendar year (or such lesser
period of time as may be determined by the Administrator in its discretion), (iv) is
an executive, officer or other manager, or (v) is a highly compensated
employee under Section 414(q) of the Code.  Notwithstanding the foregoing, for options
granted under the Non-423 Plan Component, Eligible Employee shall also mean any
other employee of a Designated Subsidiary to the extent that local law requires
participation in the Plan to be extended to such employee, as determined by the
Administrator.

 

(n)           “Employer” means the employer
of the applicable Eligible Employee(s).

 

(o)           “Enrollment Date” means the
first Trading Day of each Offering Period.

 

(p)           “Exchange Act” means the
Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.

 

(q)           “Exercise Date” means the last
Trading Day of each Purchase Period.

 

(r)            “Fair Market Value” means, as
of any date and unless the Administrator determines otherwise, the value of
Common Stock determined as follows:

 

(i)    If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market of The Nasdaq Stock Market, its Fair Market Value

 

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will be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system on the date of determination (or on the last
preceding Trading Day if the date of determination is not a Trading Day), as
reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

 

(ii)   If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value will be the mean between the high bid and low asked prices for the
Common Stock on the date of determination (or on the last preceding Trading Day
if the date of determination is not a Trading Day), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

 

(iii)  In the absence of an established market for
the Common Stock, the Fair Market Value thereof will be determined in good
faith by the Administrator.

 

(s)           “Fiscal Year” means the fiscal
year of the Company.

 

(t)            “New Exercise Date” means a
new Exercise Date if the Administrator shortens any Offering Period then in
progress.

 

(u)           “Non-423 Plan Component” means
a component of this Plan that is not intended to meet the requirements set
forth in Section 423(b) of the Code, as amended.

 

(v)           “Offering Periods” means the
periods of approximately twenty-four (24) months during which an option granted
pursuant to the Plan may be exercised, commencing on the first Trading Day on
or after June 1 and December 1 of each year and terminating on the
last Trading Day in the periods ending twenty-four (24) months later.  The duration and timing of Offering Periods
may be changed pursuant to Sections 4 and 20.

 

(w)          “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code.

 

(x)            “Participant” means an
Eligible Employee that participates in the Plan.

 

(y)           “Plan” means this Omnivision
Technologies, Inc. 2009 Employee Stock Purchase Plan, which includes a
Code Section 423 Plan Component and a Non-423 Plan Component.

 

(z)            “Purchase Period” means the
approximately six (6) month period commencing after one Exercise Date and
ending with the next Exercise Date, except that the first Purchase Period of
any Offering Period will commence on the Enrollment Date and end with the next
Exercise Date.

 

(aa)         “Purchase Price” means an amount
equal to eighty-five percent (85%) of the Fair Market Value of a share of
Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase
Price may be determined for subsequent Offering Periods by the Administrator
subject to compliance with Section 423 of the Code (or any successor rule or
provision or any other applicable law, regulation or stock exchange rule) or
pursuant to Section 20.

 

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(bb)         “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code.

 

(cc)         “Trading Day” means a day on
which the national stock exchange upon which the Common Stock is listed is open
for trading.

 

3.             Eligibility.

 

(a)           Offering Periods.  Any Eligible Employee on a given Enrollment
Date will be eligible to participate in the Plan, subject to the requirements
of Section 5.

 

(b)           Limitations.  Any provisions of the Plan to the contrary
notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to
the extent that, immediately after the grant, such Eligible Employee (or any
other person whose stock would be attributed to such Eligible Employee pursuant
to Section 424(d) of the Code) would own capital stock of the Company
or any Parent or Subsidiary of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Parent or Subsidiary of the Company, or (ii) to the extent that his or
her rights to purchase stock under all employee stock purchase plans (as
defined in Section 423 of the Code) of the Company or any Parent or
Subsidiary of the Company accrues at a rate, which exceeds twenty-five thousand
dollars ($25,000) worth of stock (determined at the Fair Market Value of the
stock at the time such option is granted) for each calendar year in which such
option is outstanding at any time, as determined in accordance with Section 423
of the Code and the regulations thereunder.

 

4.             Offering Periods.  The Plan will be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after June 1 and December 1 each year, or on such
other date as the Administrator will determine. 
The Administrator will have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced prior to the
scheduled beginning of the first Offering Period to be affected thereafter.

 

5.             Participation.  An Eligible Employee may participate in the
Plan by (i) submitting to the Company’s stock administration office (or
its designee), on or before a date determined by the Administrator prior to an
applicable Enrollment Date, a properly completed subscription agreement authorizing
payroll deductions in the form provided by the Administrator for such purpose,
or (ii) following an electronic or other enrollment procedure determined
by the Administrator.

 

6.             Payroll Deductions.

 

(a)           At the time a Participant enrolls in
the Plan pursuant to Section 5, he or she will elect to have payroll
deductions made on each pay day during the Offering Period in an amount not
exceeding fifteen percent (15%)  of the
Compensation, which he or she receives on each pay day during the Offering
Period; provided, however, that should a pay day occur on an Exercise Date, a
Participant will have the payroll deductions made on such day applied to his or
her account under the subsequent Purchase Period or Offering Period.  A Participant’s subscription agreement will
remain in effect for successive Offering Periods unless terminated as provided
in Section 10 hereof.

 

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(b)           Payroll deductions for a Participant
will commence on the first pay day following the Enrollment Date and will end
on the last pay day prior to the Exercise Date of such Offering Period to which
such authorization is applicable, unless sooner terminated by the Participant
as provided in Section 10 hereof.

 

(c)           All payroll deductions made for a Participant
will be credited to his or her account under the Plan and will be withheld in
whole percentages only.  A Participant
may not make any additional payments into such account.

 

(d)           A Participant may discontinue his or
her participation in the Plan as provided in Section 10, or may increase
or decrease the rate of his or her payroll deductions during the Offering
Period by (i) properly completing and submitting to the Company’s stock
administration office (or its designee), on or before a date determined by the
Administrator prior to an applicable Exercise Date, a new subscription
agreement authorizing the change in payroll deduction rate in the form provided
by the Administrator for such purpose, or (ii) following an electronic or
other procedure prescribed by the Administrator; provided, however, that a
Participant may only make one payroll deduction change during each  month of the Offering Period.  If a Participant has not followed such
procedures to change the rate of payroll deductions, the rate of his or her
payroll deductions will continue at the originally elected rate throughout the
Offering Period and future Offering Periods (unless terminated as provided in Section 10).  The Administrator may, in its sole
discretion, limit the nature and/or number of payroll deduction rate changes
that may be made by Participants during any Offering Period, and may establish
such other conditions or limitations as it deems appropriate for Plan
administration.  Any change in payroll
deduction rate made pursuant to this Section 6(d) will be effective
as of the first full payroll period following five (5) business days after
the date on which the change is made by the Participant (unless the
Administrator, in its sole discretion, elects to process a given change in
payroll deduction rate more quickly).

 

(e)           Notwithstanding the foregoing, to the
extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b),
a Participant’s payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period.  Subject
to Section 423(b)(8) of the Code and Section 3(b) hereof,
payroll deductions will recommence at the rate originally elected by the
Participant effective as of the beginning of the first Purchase Period
scheduled to end in the following calendar year, unless terminated by the
Participant as provided in Section 10.

 

(f)            Notwithstanding any provisions to
the contrary in the Plan, the Administrator may allow Eligible Employees to
participate in the Plan via cash contributions instead of payroll deductions if
(i) payroll deductions are not permitted under applicable local law, and (ii) the
Eligible Employee is participating in the Non-423 Plan Component or the
Administrator determines that cash contributions are permissible under Section 423
of the Code.

 

(g)           At the time the option is exercised,
in whole or in part, or at the time some or all of the Common Stock issued
under the Plan is disposed of, the Participant must make adequate provision for
the Company’s or Employer’s federal, state, or any other tax liability payable
to any authority including taxes imposed by jurisdictions outside of the United
States, national insurance, social security or other tax withholding
obligations, if any, which arise upon the exercise of the option or the
disposition of the Common Stock.  At any
time, the Company or the Employer may, but will not be obligated to, withhold
from the Participant’s compensation the amount necessary for

 

6

 

the Company or the Employer
to meet applicable withholding obligations, including any withholding required
to make available to the Company or the Employer any tax deductions or benefits
attributable to sale or early disposition of Common Stock by the Eligible
Employee. In addition, the Company or the Employer may, but will not be
obligated to, withhold from the proceeds of the sale of Common Stock or any
other method of withholding the Company or the Employer deems appropriate.

 

7.             Grant of Option.  On the Enrollment Date of each Offering
Period, each Eligible Employee participating in such Offering Period will be
granted an option to purchase on each Exercise Date during such Offering Period
(at the applicable Purchase Price) up to a number of shares of Common Stock
determined by dividing such Eligible Employee’s payroll deductions accumulated
prior to such Exercise Date and retained in the Eligible Employee’s account as
of the Exercise Date by the applicable Purchase Price; provided that in no
event will an Eligible Employee be permitted to purchase during each Purchase
Period more than a number of shares determined by dividing $12,500 by the Fair
Market Value of a share of the Company’s Common Stock (subject to any
adjustment pursuant to Section 19) on the Enrollment Date, and provided
further that such purchase will be subject to the limitations set forth in
Sections 3(b) and 13.  The Eligible
Employee may accept the grant of such option with respect to an Offering Period
by electing to participate in the Plan in accordance with the requirements of Section 5.  The Administrator may, for future Offering
Periods, increase or decrease, in its absolute discretion, the maximum number
of shares of Common Stock that an Eligible Employee may purchase during each
Purchase Period of an Offering Period. 
Exercise of the option will occur as provided in Section 8, unless
the Participant has withdrawn pursuant to Section 10.  The option will expire on the last day of the
Offering Period.

 

8.             Exercise of Option.

 

(a)           Unless a Participant withdraws from
the Plan as provided in Section 10, his or her option for the purchase of
shares of Common Stock will be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to the option will be purchased
for such Participant at the applicable Purchase Price with the accumulated
payroll deductions from his or her account. 
No fractional shares of Common Stock will be purchased; any payroll
deductions accumulated in a Participant’s account, which are not sufficient to
purchase a full share will be retained in the Participant’s account for the
subsequent Purchase Period or Offering Period, subject to earlier withdrawal by
the Participant as provided in Section 10. 
Any other funds left over in a Participant’s account after the Exercise
Date will be returned to the Participant. 
During a Participant’s lifetime, a Participant’s option to purchase
shares hereunder is exercisable only by him or her.

 

(b)           If the Administrator determines that,
on a given Exercise Date, the number of shares of Common Stock with respect to
which options are to be exercised may exceed (i) the number of shares of
Common Stock that were available for sale under the Plan on the Enrollment Date
of the applicable Offering Period, or (ii) the number of shares of Common
Stock available for sale under the Plan on such Exercise Date, the
Administrator may in its sole discretion (x) provide that the Company will
make a pro rata allocation of the shares of Common Stock available for purchase
on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner
as will be practicable and as it will determine in its sole discretion to be
equitable among all Participants exercising options to purchase Common Stock on
such Exercise Date, and continue all Offering

 

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Periods then in effect or (y) provide
that the Company will make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform
a manner as will be practicable and as it will determine in its sole discretion
to be equitable among all participants exercising options to purchase Common
Stock on such Exercise Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20.  The
Company may make a pro rata allocation of the shares available on the
Enrollment Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional shares for issuance
under the Plan by the Company’s stockholders subsequent to such Enrollment
Date.

 

9.             Delivery.  As soon as reasonably practicable after each
Exercise Date on which a purchase of shares of Common Stock occurs, the Company
will arrange the delivery to each Participant the shares purchased upon
exercise of his or her option in a form determined by the Administrator (in its
sole discretion) and pursuant to rules established by the
Administrator.  The Company may permit or
require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize
electronic or automated methods of share transfer.  The Company may require that shares be
retained with such broker or agent for a designated period of time and/or may
establish other procedures to permit tracking of disqualifying dispositions of
such shares.  No Participant will have
any voting, dividend, or other stockholder rights with respect to shares of
Common Stock subject to any option granted under the Plan until such shares
have been purchased and delivered to the Participant as provided in this Section 9.

 

10.           Withdrawal.

 

(a)           A Participant may
withdraw all but not less than all the payroll deductions credited to his or
her account and not yet used to exercise his or her option under the Plan at
any time by (i) submitting to the Company’s stock administration office
(or its designee) a written notice of withdrawal in the form determined by the
Administrator for such purpose, or (ii) following an electronic or other
withdrawal procedure determined by the Administrator.  All of the Participant’s payroll deductions
credited to his or her account will be paid to such Participant promptly after
receipt of notice of withdrawal and such Participant’s option for the Offering
Period will be automatically terminated, and no further payroll deductions for
the purchase of shares will be made for such Offering Period.  If a Participant withdraws from an Offering
Period, payroll deductions will not resume at the beginning of the succeeding
Offering Period, unless the Participant re-enrolls in the Plan in accordance
with the provisions of Section 5.

 

(b)           A Participant’s withdrawal from an
Offering Period will not have any effect upon his or her eligibility to
participate in any similar plan that may hereafter be adopted by the Company or
in succeeding Offering Periods that commence after the termination of the
Offering Period from which the Participant withdraws.

 

11.           Termination of
Employment.  Upon a
Participant’s ceasing to be an Eligible Employee, for any reason, he or she
will be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such Participant’s account during the Offering Period
but not yet used to purchase shares of Common Stock under the Plan will be
returned to such Participant or, in the case of his or her death, to the person
or persons entitled thereto under Section 15, and such Participant’s
option will be automatically terminated.

 

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12.           Interest.  No interest will accrue on the payroll
deductions of a participant in the Plan, except as may be required by
applicable law, as determined by the Company, for Participants in the Non-423
Plan Component (or the Code Section 423 Plan Component if permitted under
Code Section 423).

 

13.           Stock.

 

(a)           Subject to adjustment upon changes in
capitalization of the Company as provided in Section 19 hereof, the
maximum number of shares of Common Stock that will be made available for sale
under the Plan will be 2,500,000 shares of Common Stock.

 

(b)           Until the shares are issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), a Participant will only have the
rights of an unsecured creditor with respect to such shares, and no right to
vote or receive dividends or any other rights as a stockholder will exist with
respect to such shares.

 

(c)           Shares of Common Stock to be
delivered to a Participant under the Plan will be registered in the name of the
Participant or in the name of the Participant and his or her spouse.

 

14.           Administration.  The Plan will be administered by the Board or
a Committee appointed by the Board, which Committee will be constituted to
comply with Applicable Laws.  The
Administrator will have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan.  Every finding, decision and determination
made by the Administrator will, to the full extent permitted by law, be final
and binding upon all parties. 
Notwithstanding any provision to the contrary in this Plan, the
Administrator may adopt rules or procedures relating to the operation and
administration of the Non-423 Plan Component to accommodate the specific
requirements of local laws and procedures for jurisdictions outside of the
United States.  Without limiting the
generality of the foregoing, the Administrator is specifically authorized to
adopt rules and procedures regarding eligibility to participate, the
definition of Compensation, handling of payroll deductions, making of
contributions to the Plan (including, without limitation, in forms other than
payroll deductions), establishment of bank or trust accounts to hold payroll
deductions, payment of interest, conversion of local currency, obligations to
pay payroll tax, determination of beneficiary designation requirements,
withholding procedures and handling of stock certificates that vary with local
requirements.  Further, the Administrator
is authorized to adopt sub-plans applicable to particular Designated
Subsidiaries or locations under the Non-423 Plan Component.  The rules of such sub-plans may take
precedence over other provisions of this Plan, with the exception of Section 13(a) hereof,
but unless otherwise superseded by the terms of such sub-plan, the provisions
of this Plan shall govern the operation of such sub-plan.

 

15.           Designation of
Beneficiary.

 

(a)           If permitted by the
Administrator, a Participant may file a designation of a beneficiary who is to
receive any shares of Common Stock and cash, if any, from the Participant’s
account under the Plan in the event of such Participant’s death subsequent to
an Exercise Date on which the option is exercised but prior to delivery to such
Participant of such shares and cash.  In
addition, if permitted by the Administrator, a Participant may file a
designation of a beneficiary who

 

9

 

is
to receive any cash from the Participant’s account under the Plan in the event
of such Participant’s death prior to exercise of the option.  If a Participant is married and the
designated beneficiary is not the spouse, spousal consent will be required for
such designation to be effective.

 

(b)           Such designation of beneficiary may
be changed by the Participant at any time by notice in a form determined by the
Administrator.  In the event of the death
of a Participant and in the absence of a beneficiary validly designated under
the Plan who is living at the time of such Participant’s death, the Company
will deliver such shares and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such shares and/or cash to the spouse or to any one or more
dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

 

(c)           All beneficiary designations will be
in such form and manner as the Administrator may designate from time to time.

 

16.           Transferability.  Neither payroll deductions credited to a
Participant’s account nor any rights with regard to the exercise of an option
or to receive shares of Common Stock under the Plan may be assigned,
transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 15 hereof)
by the Participant.  Any such attempt at
assignment, transfer, pledge or other disposition will be without effect,
except that the Company may treat such act as an election to withdraw funds
from an Offering Period in accordance with Section 10 hereof.

 

17.           Use of Funds.  The Company may use all payroll deductions
received or held by it under the Plan for any corporate purpose, and the
Company will not be obligated to segregate such payroll deductions  unless otherwise required under local law, as determined by the
Administrator (in which case, the affected options will be granted under the
Non-423 Plan Component, if necessary). 
Until shares of Common Stock are issued, Participants will only have the
rights of an unsecured creditor with respect to such shares.

 

18.           Reports.  Individual accounts will be maintained for
each Participant in the Plan.  Statements
of account will be given to participating Eligible Employees at least annually,
which statements will set forth the amounts of payroll deductions, the Purchase
Price, the number of shares of Common Stock purchased and the remaining cash
balance, if any.

 

19.                                 Adjustments, Dissolution,
Liquidation, Merger or Change in Control.

 

(a)           Adjustments.  In the event that any dividend or
other distribution (whether in the form of cash, Common Stock, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or
other change in the corporate structure of the Company affecting the Common
Stock occurs, the Administrator, in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the
Plan, will, in such manner as it may deem equitable, adjust the number and
class of Common Stock that may be delivered under the Plan, the Purchase Price
per share and the number

 

10

 

of shares of Common Stock
covered by each option under the Plan that has not yet been exercised, and the
numerical limits of Sections 7 and 13.

 

(b)           Dissolution or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be
shortened by setting a New Exercise Date, and will terminate immediately prior
to the consummation of such proposed dissolution or liquidation, unless
provided otherwise by the Administrator. 
The New Exercise Date will be before the date of the Company’s proposed
dissolution or liquidation.  The
Administrator will notify each Participant in writing, at least ten (10) business
days prior to the New Exercise Date, that the Exercise Date for the Participant’s
option has been changed to the New Exercise Date and that the Participant’s
option will be exercised automatically on the New Exercise Date, unless prior
to such date the Participant has withdrawn from the Offering Period as provided
in Section 10 hereof.

 

(c)           Merger or Change in Control.  In the event of a merger or Change in
Control, each outstanding option will be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation.  In the event that
the successor corporation refuses to assume or substitute for the option, the
Offering Period with respect to which such option relates will be shortened by
setting a New Exercise Date on which such Offering Period shall end.  The New Exercise Date will occur before the
date of the Company’s proposed merger or Change in Control.  The Administrator will notify each
Participant in writing prior to the New Exercise Date, that the Exercise Date
for the Participant’s option has been changed to the New Exercise Date and that
the Participant’s option will be exercised automatically on the New Exercise
Date, unless prior to such date the Participant has withdrawn from the Offering
Period as provided in Section 10 hereof.

 

20.           Amendment or Termination.

 

(a)           The Administrator, in its sole
discretion, may amend, suspend, or terminate the Plan, or any part thereof, at
any time and for any reason.  If the Plan
is terminated, the Administrator, in its discretion, may elect to terminate all
outstanding Offering Periods either immediately or upon completion of the
purchase of shares of Common Stock on the next Exercise Date (which may be
sooner than originally scheduled, if determined by the Administrator in its
discretion), or may elect to permit Offering Periods to expire in accordance
with their terms (and subject to any adjustment pursuant to Section 19).  If the Offering Periods are terminated prior
to expiration, all amounts then credited to Participants’ accounts that have not been used to
purchase shares of Common Stock will be returned to the Participants (without
interest thereon, except as otherwise required under local laws, as further set
forth in Section 12 hereof) as soon as administratively practicable.

 

(b)           Without stockholder consent and
without limiting Section 20(a), the Administrator will be entitled to
change the Offering Periods, limit the frequency and/or number of changes in
the amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a Participant in
order to adjust for delays or mistakes in the Company’s processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the

 

11

 

purchase of Common Stock for
each Participant properly correspond with amounts withheld from the Participant’s
Compensation, and establish such other limitations or procedures as the
Administrator determines in its sole discretion advisable that are consistent
with the Plan.

 

(c)           In the event the Administrator
determines that the ongoing operation of the Plan may result in unfavorable financial
accounting consequences, the Administrator may, in its discretion and, to the
extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:

 

(i)    amending the Plan to conform with the safe
harbor definition under Statement of Financial Accounting Standards 123(R),
including with respect to an Offering Period underway at the time;

 

(ii)   altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;

 

(iii)  shortening any Offering Period by setting a
New Exercise Date, including an Offering Period underway at the time of the Administrator action;

 

(iv)  reducing the maximum percentage of Compensation
a Participant may elect to set aside as payroll deductions; and

 

(v)   reducing the maximum number of Shares a
Participant may purchase during any Offering Period or Purchase Period.

 

Such
modifications or amendments will not require stockholder approval or the
consent of any Plan Participants.

 

21.           Notices.  All notices or other communications by a
Participant to the Company under or in connection with the Plan will be deemed
to have been duly given when received in the form and manner specified by the Company
at the location, or by the person, designated by the Company for the receipt
thereof.

 

22.           Conditions Upon Issuance of Shares.  Shares of Common Stock will not be issued
with respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto will comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the shares may then be listed, and will be further subject to the
approval of counsel for the Company with respect to such compliance.

 

As
a condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

 

12

 

23.           Code Section 409A.  The Code Section 423 Plan Component is
exempt from the application of Code Section 409A.  The Non-423 Plan Component is intended to be
exempt from Code Section 409A under the short-term deferral exception and
any ambiguities in the Plan shall be construed and interpreted in accordance
with such intent.  In furtherance of the
foregoing and notwithstanding any provision in the Plan to the contrary, if the
Administrator determines that an option granted under the Plan may be subject
to Code Section 409A or that any provision in the Plan would cause an
option under the Plan to be subject to Code Section 409A, the
Administrator may amend the terms of the Plan and/or of an outstanding option
granted under the Plan, or take such other action the Administrator determines
is necessary or appropriate, in each case, without the Participant’s consent,
to exempt any outstanding option or future option that may be granted under the
Plan from or to allow any such options to comply with Code Section 409A,
but only to the extent any such amendments or action by the Administrator would
not violate Code Section 409A. 
Notwithstanding the foregoing, the Company shall have no liability to a
Participant or any other party if the option to purchase Common Stock under the
Plan that is intended to be exempt from or compliant with Code Section 409A
is not so exempt or compliant or for any action taken by the Administrator with
respect thereto.  The Company makes no
representation that the option to purchase Common Stock under the Plan is
compliant with Code Section 409A.

 

24.           Stockholder Approval.  The Plan will be subject to approval by the
stockholders of the Company within twelve (12) months after the date the Plan
is adopted by the Board.  Such
stockholder approval will be obtained in the manner and to the degree required
under Applicable Laws.

 

25.           Governing Law. The Plan shall
be governed by, and construed in accordance with, the laws of the State of
California (except its choice-of-law provisions).

 

26.           Severability.  If any provision of the Plan is or becomes or
is deemed to be invalid, illegal, or unenforceable for any reason in any
jurisdiction or as to any Participant, such invalidity, illegality or
unenforceability shall not affect the remaining parts of the Plan, and the Plan
shall be construed and enforced as to such jurisdiction or Participant as if the
invalid, illegal or unenforceable provision had not been included.

 

27.           Automatic Transfer to Low Price
Offering Period.  To the extent
permitted by Applicable Laws, if the Fair Market Value of the Common Stock on
any Exercise Date in an Offering Period is lower than the Fair Market Value of
the Common Stock on the Enrollment Date of such Offering Period, then all
participants in such Offering Period will be automatically withdrawn from such
Offering Period immediately after the exercise of their option on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period
as of the first day thereof.

 

13Exhibit 10.1

 

	
  

  	
  Department:

  	
  Policy
  Number:

  
	
  Executive
  Office

  	
   

  
	
   

  	
   

  
	
  Date
  Issued:

  	
  Supersedes
  Number:

  
	
  12/04/09

  	
  09/10/08

  
	
   

  	
   

  
	
  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)        Payment of the Incentive
Compensation Plan (ICP) bonus payment for the most recently completed bonus
term if a bonus has been declared for Executive but not paid;

 

(D)       Executive’s ICP bonus for
the year of termination, based on actual performance results for the full year
and prorated through Executive’s employment termination date, paid in
accordance with the terms of the ICP;

 

(E)        Additional severance
benefits equal to Executive’s ICP bonus for the full year of termination at
Executive’s target bonus level in effect on the date of termination, paid in
equal installments over the twenty-four (24) month period following the date of
Executive’s separation from service;

 

(F)         Any unvested equity awards
Executive may have received under the 2002 Long Term Equity Incentive Plan or
2006 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;

 

(G)        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 

 

2

 

would have paid for Executive’s coverage if Executive had continued as
a Company employee;

 

(H)       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

 

(I)              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)        Payment of the Incentive
Compensation Plan (ICP) bonus payment for the most recently completed bonus
term if a  bonus has been declared for Executive
but not paid;

 

(D)       Executive’s ICP bonus for
the year of termination, based on actual performance results for the full year
and prorated through Executive’s employment termination date, paid in
accordance with the terms of the ICP;

 

(E)         Additional severance
benefits equal to Executive’s ICP bonus for the full year of termination at
Executive’s target bonus level in effect on the date of termination, paid in
equal 

 

3

 

installments over the twelve (12) month period following the date of
Executive’s separation from service;

 

(F)         Any unvested equity awards
Executive may have received under the 2002 Long Term Equity Incentive Plan or
2006 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;

 

(G)        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;

 

(H)       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

 

(I)            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 

 

4

 

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.”

 

2. Voluntary Termination by Executive

 

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; earned but unused vacation compensation and the ICP
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 ICP 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, 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 ICP 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

 

·                                          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.

 

5

 

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:

 

(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 equal to 300% of Executive’s Incentive Compensation Plan (ICP)
bonus  for the full year of termination
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 Executive’s ICP bonus payment for the most recently completed
bonus term if a bonus has been declared for Executive but not paid.  Executive will also receive Executive’s ICP
bonus for the year of termination, based on actual performance results for the
full year and prorated through Executive’s employment termination date, paid in
accordance with the terms of the ICP. 
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 

 

6

 

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;

 

(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 

 

7

 

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.

 

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, except for
earned but unpaid base salary and accrued but unpaid ICP 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 ICP 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 ICP 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 ICP 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 

 

8

 

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

 

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, manufactures,
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.

 

9

 

(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 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 be subject to all applicable Federal,
state, and local tax withholding and reporting requirements.

 

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 

 

11

 

(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.

 

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.

 

12

 

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 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 continuing Executive’s
employment with the Company after the effective date of this Policy, Executive
will be agreeing that 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. All reductions to Executive’s 

 

14

 

payments under this Section 1(c) will first be made to
amounts not subject to Code Section 409A before any amounts subject to
Code Section 409A are reduced.  If
the Consultant selected to provide the opinions referred to above so requests
in connection with the opinion required by this 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 used to determine the present value of the Total
Payments, so that Executive will have received or be entitled to receive the
maximum amount to which Executive is entitled under this Agreement.  Payment of any deficiency and interest
determined under this Section 1(c) shall be made by the last day of
the calendar year in which is received either the opinions called for above or
the Internal Revenue Service determination that a deficiency exists.

 

(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.

 

15

 

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.

 

16

 

(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 

 

17

 

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, 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.

 

18

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