<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED: MARCH 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-12936
TITAN INTERNATIONAL, INC.
(Exact name of Registrant as specified in its Charter)
ILLINOIS 36-3228472
(State of Incorporation) (I.R.S. Employer Identification No.)
2701 SPRUCE STREET, QUINCY, IL 62301
(Address of principal executive offices, including Zip Code)
(217) 228-6011
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
SHARES OUTSTANDING AT
CLASS APRIL 28, 2000
----- --------------
<S> <C>
COMMON STOCK, NO PAR VALUE PER SHARE 20,712,829
</TABLE>
<PAGE> 2
TITAN INTERNATIONAL, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Consolidated Condensed Statements of Operations
for the Three Months Ended March 31, 2000 and 1999 1
Consolidated Condensed Balance Sheets as of
March 31, 2000 and December 31, 1999 2
Consolidated Condensed Statements of Cash Flows
for the Three Months Ended March 31, 2000 and 1999 3
Notes to Consolidated Condensed Financial Statements 4-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-10
Part II. Other Information and Signature 11-12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands, except earnings per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
2000 1999
---- ----
<S> <C> <C>
Net sales $164,327 $158,610
Cost of sales 143,431 137,995
-------- --------
Gross profit 20,896 20,615
Selling, general & administrative expenses 11,286 13,442
Research and development expenses 1,550 1,597
-------- --------
Income from operations 8,060 5,576
Interest expense 6,563 5,550
Other income (216) (181)
-------- --------
Income before income taxes 1,713 207
Provision for income taxes 651 79
-------- --------
Net income $ 1,062 $ 128
======== ========
Earnings per share:
Basic $.05 $.01
Diluted $.05 $.01
Average shares outstanding:
Basic 20,666 20,911
Diluted 20,666 20,911
</TABLE>
The accompanying notes are an integral part of the
consolidated condensed financial statements.
1
<PAGE> 4
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Amounts in thousands, except share data)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 6,875 $ 8,606
Accounts receivable (net of allowance of
$5,778 and $5,863, respectively) 130,533 97,457
Inventories 144,284 133,365
Prepaid and other current assets 39,287 39,650
-------- --------
Total current assets 320,979 279,078
Property, plant and equipment, net 264,288 267,049
Other assets 53,192 51,927
Goodwill, net 38,631 39,127
-------- --------
Total assets $677,090 $637,181
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 397 $ 20,195
Accounts payable 61,516 51,363
Other current liabilities 40,252 36,737
-------- --------
Total current liabilities 102,165 108,295
Deferred income taxes 28,090 28,421
Other long-term liabilities 15,691 16,078
Long-term debt 303,305 255,521
-------- --------
Total liabilities 449,251 408,315
-------- --------
Stockholders' equity
Common stock, no par, 60,000,000 shares authorized,
27,555,081 issued 27 27
Additional paid-in capital 214,487 214,846
Retained earnings 116,875 116,123
Accumulated other comprehensive loss (9,435) (7,329)
Treasury stock at cost: 6,888,742 and 6,939,101 shares,
respectively (94,115) (94,801)
-------- --------
Total stockholders' equity 227,839 228,866
-------- --------
Total liabilities and stockholders' equity $677,090 $637,181
======== ========
</TABLE>
The accompanying notes are an integral part of the
consolidated condensed financial statements.
2
<PAGE> 5
TITAN INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Amounts in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,062 $ 128
Depreciation and amortization 10,126 9,874
Increase in receivables (35,256) (29,617)
(Increase)/decrease in inventories (11,366) 2,820
(Increase)/decrease in other current assets 516 (369)
Increase in accounts payable 11,475 3,720
Increase in other accrued liabilities 3,917 4,144
Other, net (1,830) (3,230)
-------- --------
Net cash used for operating activities (21,356) (12,530)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net (8,274) (9,672)
Other 0 (3,224)
-------- --------
Net cash used for investing activities (8,274) (12,896)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings 48,000 23,009
Payment of debt (19,892) (165)
Repurchase of common stock 0 (686)
Dividends paid (309) (314)
Other, net 327 336
-------- --------
Net cash provided by financing activities 28,126 22,180
Effect of exchange rate changes on cash (227) 0
Net decrease in cash and cash equivalents (1,731) (3,246)
Cash and cash equivalents at beginning of period 8,606 14,116
-------- --------
Cash and cash equivalents at end of period $ 6,875 $ 10,870
======== ========
</TABLE>
The accompanying notes are an integral part of the
consolidated condensed financial statements.
3
<PAGE> 6
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
A. ACCOUNTING POLICIES
In the opinion of Titan International, Inc. ("Titan" or the "Company"),
the accompanying unaudited consolidated condensed financial statements
contain all adjustments, which are normal and recurring in nature,
necessary to present fairly its financial position as of March 31,
2000, the results of operations for the three months ended March 31,
2000 and 1999, and cash flows for the three months ended March 31, 2000
and 1999.
Accounting policies have continued without change and are described in
the Summary of Significant Accounting Policies contained in the
Company's 1999 Annual Report on Form 10-K. For additional information
regarding the Company's financial condition, refer to the footnotes
accompanying the financial statements as of and for the year ended
December 31, 1999, filed in conjunction with the Company's 1999 Annual
Report on Form 10-K. Details in those notes have not changed
significantly except as a result of normal interim transactions and
certain matters discussed below.
B. INVENTORIES
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Raw materials $ 38,655 $ 35,333
Work-in-process 15,415 18,810
Finished goods 84,893 73,564
-------- --------
138,963 127,707
LIFO reserve 5,321 5,658
-------- --------
$144,284 $133,365
======== ========
</TABLE>
C. FIXED ASSETS
Property, plant and equipment, net reflects accumulated depreciation of
$164.3 million and $155.9 million at March 31, 2000, and December 31,
1999, respectively.
4
<PAGE> 7
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
D. GOODWILL
Goodwill, net reflects accumulated amortization of $7.7 million and
$7.3 million at March 31, 2000, and December 31, 1999, respectively.
E. LONG-TERM DEBT
Long-term debt consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Senior subordinated notes $150,000 $150,000
Credit facility 130,000 82,000
Notes payable to Pirelli Armstrong Tire Corp. 10,000 29,743
Industrial revenue bonds and other 13,702 13,973
-------- --------
303,702 275,716
Less: Amounts due within one year 397 20,195
-------- --------
$303,305 $255,521
======== ========
</TABLE>
Aggregate maturities of long-term debt at March 31, 2000 are as follows
(in thousands):
<TABLE>
<S> <C>
April 1 - December 31, 2000 $ 300
2001 5,386
2002 130,398
2003 6,350
2004 424
</TABLE>
5
<PAGE> 8
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
F. SEGMENT INFORMATION
The table below presents information about certain revenues and income
from operations used by the chief operating decision maker of the
Company for the three months ended March 31, 2000 and 1999 (in
thousands):
<TABLE>
<CAPTION>
Revenues
from external Intersegment Income from
customers revenues operations
--------- -------- ----------
<S> <C> <C> <C>
2000
Agricultural $ 72,140 $35,163 $ 6,535
Earthmoving/construction 41,206 13,777 4,627
Consumer 50,981 26,564 3,867
Reconciling items (a) 0 0 (6,969)
-------- ------- -------
Consolidated totals $164,327 $75,504 $ 8,060
======== ======= =======
1999
Agricultural $ 75,576 $26,620 $ 4,480
Earthmoving/construction 38,544 9,622 4,890
Consumer 44,490 12,203 2,171
Reconciling items (a) 0 0 (5,965)
-------- ------- -------
Consolidated totals $158,610 $48,445 $ 5,576
======== ======= =======
</TABLE>
(a) Represents corporate expenses and depreciation and amortization expense
related to property, plant and equipment and goodwill carried at the
corporate level.
6
<PAGE> 9
TITAN INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
G. COMPREHENSIVE LOSS
Comprehensive loss, which includes net income and the effect of
currency translation, totaled $(1.0) million for the first quarter of
2000, compared to $(3.9) million in the first quarter of 1999.
H. NEW ACCOUNTING STANDARD
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133), will be
adopted on January 1, 2001. The Company is evaluating the effect SFAS
133 will have on its financial position and results of operations.
I. SUBSEQUENT EVENT
On April 14, 2000, the Company sold certain assets (primarily raw
material inventory, work-in-process inventory, and property, plant and
equipment) of two facilities located in Clinton, Tennessee, and
Slinger, Wisconsin, to Carlisle Tire and Wheel Company, a subsidiary of
Carlisle Companies Incorporated for approximately $94.1 million. The
Company will record a pretax gain of approximately $35.0 million to
$40.0 million in the second quarter of 2000. This nonrecurring gain has
not been included in the pro forma amounts described below. These two
facilities are in the business of providing wheels and tires to the
consumer market.
Had the transaction occurred on January 1, 1999, net sales for the
three months ended March 31, 2000, would have been $140.5 million,
compared to $136.2 million in 1999. Income from operations for the
three months ended March 31, 2000, would have been $3.8 million,
compared to $1.8 million in 1999, on a pro forma basis. Loss per share
for the three months ended March 31, 2000, would have been $(.05),
compared to $(.08) in 1999, on a pro forma basis.
7
<PAGE> 10
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended March 31, 2000, were $164.3 million, as compared
to 1999 first quarter net sales of $158.6 million. Sales improved due to a
modest increase in volume in the earthmoving/construction and consumer markets.
Cost of sales was $143.4 million for the first quarter of 2000, as compared to
$138.0 million in 1999. Gross profit for the first quarter of 2000 was $20.9
million or 12.7% of net sales, compared to $20.6 million or 13.0% of net sales
for the first quarter of 1999.
Selling, general and administrative ("SG&A") expenses for the first quarter of
2000 were $11.3 million or 6.9% of net sales, compared to $13.4 million or 8.5%
of net sales for 1999. The decrease in SG&A expenses, as a percentage of net
sales, is primarily attributed to the Company's efforts to streamline costs at
each of its facilities. Research and development ("R&D") expenses for the first
quarter of 2000 and 1999 were $1.6 million or 1.0% of net sales.
Income from operations for the first quarter of 2000 was $8.1 million or 4.9% of
net sales, compared to $5.6 million or 3.5% in 1999. Income from operations was
impacted by the items described in the preceding paragraphs.
Net sales in the agricultural market were $72.1 million for the first quarter of
2000, as compared to $75.6 million in 1999. Earthmoving/construction market net
sales were $41.2 million for the first quarter of 2000, as compared to $38.5
million in 1999. The Company's consumer market net sales were $51.0 million for
the first quarter of 2000, as compared to $44.5 million in 1999. The declining
market sustained by low commodity prices negatively impacted sales in the
agricultural market. Sales in the earthmoving/construction and consumer market
increased due to a modest increase in volume.
Income from operations in the agricultural market was $6.5 million for the first
quarter of 2000, as compared to $4.5 million in 1999. The Company's
earthmoving/construction market income from operations was $4.6 million for the
first quarter of 2000, as compared to $4.9 million in 1999. Consumer market
income from operations was $3.9 million for the first quarter of 2000, as
compared to $2.2 million in 1999. The increase in income from operations in the
agricultural, and consumer markets was primarily due to improved efficiencies
coupled with the Company's efforts to streamline costs. The decrease in income
from operations in the earthmoving/construction market is primarily due to a
change in product mix from larger to smaller diameter wheels, resulting in
reduced margins. Income from operations on a segment basis does not include
corporate expenses and depreciation and amortization expense related to
property, plant and equipment and goodwill carried at the corporate level of
$7.0 million for the first quarter of 2000, as compared to $6.0 million in 1999.
8
<PAGE> 11
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
Net interest expense was $6.6 million for the first quarter of 2000, compared to
$5.6 million in 1999. The increased interest expense was primarily due to an
increase in the average debt outstanding in the first quarter of 2000, coupled
with higher average interest rates.
Net income for the first quarter of 2000 was $1.1 million compared to $0.1
million in 1999. Basic and diluted earnings per share were $.05 for the first
quarter of 2000 compared to $.01 in 1999. Net income and earnings per share were
impacted by the items described in the preceding paragraphs.
LIQUIDITY AND CAPITAL RESOURCES
In the first quarter of 2000, negative cash flows from operating activities of
$21.4 million resulted from increases in receivables and inventories. These
amounts were partially offset by increases in accounts payable and other accrued
liabilities. The increase in receivables is primarily due to extended payment
terms offered to certain customers during the first quarter of 2000. The Company
has built inventory to meet expected production and sales demand in the next six
months.
The Company has invested $8.3 million in capital expenditures in 2000, including
$3.4 million for equipment and construction related to the Brownsville, Texas
facility. The balance represents various equipment purchases and building
improvements to enhance production capabilities.
During the quarter, Titan hosted a successful open house for the media, local
and state officials of Texas to commemorate the introductory phase of tire
production at the Brownsville, Texas facility. The one million square foot
building houses equipment to manufacture specialty tires for agricultural,
construction and consumer markets.
The Company received $48.0 million in proceeds from its $175.0 million revolving
credit facility. These proceeds have been used to fund operations, capital
expenditures and pay the note described below.
In February 2000, the Company paid the subordinated note for $19.7 million to
Pirelli Armstrong Tire Corporation.
At March 31, 2000, the Company had cash and cash equivalents of $6.9 million.
Cash on hand, anticipated internal cash flows and utilization of available
borrowing under the Company's credit facilities are expected to provide
sufficient liquidity for working capital needs, capital expenditures and
acquisitions for the foreseeable future.
9
<PAGE> 12
TITAN INTERNATIONAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RECENT DEVELOPMENTS
On April 14, 2000, the Company sold certain assets (primarily raw material
inventory, work-in-process inventory, and property, plant and equipment) of two
facilities located in Clinton, Tennessee, and Slinger, Wisconsin, to Carlisle
Tire and Wheel Company, a subsidiary of Carlisle Companies Incorporated for
approximately $94.1 million. The Company will record a pretax gain of
approximately $35.0 million to $40.0 million in the second quarter of 2000.
These two facilities are in the business of providing wheels and tires to the
consumer market. Titan has decided to exit the lawn and garden and all terrain
vehicle original equipment manufacturer wheel and tire business, concentrating
instead on the aftermarket business. See further discussion in the subsequent
event footnote in the financial statements.
MARKET RISK SENSITIVE INSTRUMENTS
The Company's risks related to foreign currencies, commodity prices and interest
rates are consistent with those for 1999.
NEW ACCOUNTING STANDARD
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133), will be adopted on January 1,
2001. The Company is evaluating the effect SFAS 133 will have on its financial
position and results of operations.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-Q contains forward-looking statements, including statements
regarding, among other items, (i) anticipated trends in the Company's business,
(ii) future expenditures for capital projects, (iii) the Company's ability to
continue to control costs and maintain quality, (iv) the Company's business
strategies, including its intention to introduce new products and (v) the
Company's intention to consider and pursue acquisitions. These forward-looking
statements are based partially on the Company's expectations and are subject to
a number of risks and uncertainties, certain of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of certain factors, including, (i) changes in the
Company's end-user markets as a result of world economic or regulatory
influences, (ii) changes in the competitive marketplace, including new products
and pricing changes by the Company's competitors, or (iii) changes regarding the
effects of implementation of the Euro. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. In light of these risks and
uncertainties, there can be no assurance that the forward-looking information
contained in this document will in fact transpire.
10
<PAGE> 13
TITAN INTERNATIONAL, INC.
PART II. OTHER INFORMATION
ITEMS 1 THROUGH 5 ARE NOT APPLICABLE.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10(iii)(A)(1) Maurice M. Taylor, Jr. Employment Agreement
dated January 30, 2000
10(iii)(A)(2) J. Michael A. Akers Employment Agreement dated
January 30, 2000
10(iii)(A)(3) Kent W. Hackamack Employment Agreement dated
January 30, 2000
10(iii)(A)(4) Cheri T. Holley Employment Agreement dated
January 30, 2000
27 Financial Data Schedule
(b) Reports on Form 8-K
In a Current Report filed on Form 8-K dated April 14, 2000,
the Company reported the sale of certain assets (primarily raw
material inventory, work-in-process inventory, and property,
plant and equipment) of two facilities located in Clinton,
Tennessee, and Slinger, Wisconsin, to Carlisle Tire and Wheel
Company, a subsidiary of Carlisle Companies Incorporated.
11
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TITAN INTERNATIONAL, INC.
(REGISTRANT)
Date: May 12, 2000 By: /s/ Kent W. Hackamack
--------------------- --------------------------------------------
Kent W. Hackamack
Vice President of Finance and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
12
<PAGE> 15
Exhibit Index
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
10(iii)(A)(1) Maurice M. Taylor, Jr. Employment Agreement dated January 30, 2000
10(iii)(A)(2) J. Michael A. Akers Employment Agreement dated January 30, 2000
10(iii)(A)(3) Kent W. Hackamack Employment Agreement dated January 30, 2000
10(iii)(A)(4) Cheri T. Holley Employment Agreement dated January 30, 2000
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10(iii)(A)(1)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 2000, between Titan
International, Inc., a Illinois corporation ("Titan and/or Company"), and
Maurice M. Taylor, Jr. ("Executive") (hereinafter, as amended or modified and in
effect called "Agreement"). The effective date of this Agreement (the "Effective
Date") shall be January 30, 2000.
INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:
1. Position. The Company agrees to employ Executive and Executive
agrees to accept employment as President and CEO of Titan pursuant to the terms
of this Agreement. Executive will perform such services in the capacity of
President and CEO as may be assigned to him by the By-laws and, from time to
time by the Board of Directors of the Company during the Employment Term and, if
applicable, during the Extended Employment Term, (as such terms are defined in
Section 2). Executive also will serve as a Director of the Company during the
Employment Term, and if applicable, during the Extended Employment Term.
Executive will devote such of his business skill, time and effort to his
employment hereunder as shall be reasonably necessary to discharge his
obligations hereunder.
2. Employment Term. Executive's term of employment by the Company under
this Agreement will begin on the Effective Date and will terminate on the date
five years after the Effective Date (the "Employment Term"), unless terminated
earlier as provided in Sections 6 and 7 hereof.
Subject to the provisions of Sections 6 and 7 of this
Agreement, this Agreement shall automatically and without requirement for action
by either party be extended for an additional one year period, and similarly
shall be automatically extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the "Extended Employment Term"), unless notice of nonrenewal is given in
accordance with the provisions of the following three sentences. If either party
desires not to continue the employment of Executive under this Agreement beyond
the Employment Term, or, if applicable, beyond the Extended Employment Term (the
last day of the Employment Term, or the last day of the Extended Employment
Term, if applicable, is hereinafter referred to as the "Termination Date"), that
party shall at least twelve (12) months but not more than sixteen (16) months
prior to the Termination Date give written notice to such effect to the other
party. Unless the notice of nonrenewal is thereafter revoked prior to the
Termination Date by the party giving notice, and the party receiving notice of
such nonrenewal consents in writing to the revocation thereof, the employment of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by its Board of
Directors as then constituted by majority vote.
3. Direct Compensation. For his service hereunder during the Employment
Term and, if applicable, during the Extended Employment Term, Executive will
receive a base salary payable at an annual rate of $ 400,000.00 (the "Base
Salary"), to be paid in accordance
1
<PAGE> 2
with the normal practices for remunerating the Company executive management.
Nothing in this Agreement will be deemed to prohibit an increase at any time in
the Base Salary if the Company's Board of Directors approves. (The Base Salary,
if so adjusted, is herein called the "Adjusted Base Salary"). In addition to
salary, each calendar year, the Executive shall be entitled to receive a minimum
bonus of one hundred percent (100%) up to a maximum of one hundred and fifty
percent (150%) of his salary based on performance with specified criteria. The
Board of Directors will establish the bonus and performance standards at the
beginning of each year. The Executive shall receive stock options of up to a
minimum of two hundred percent (200%) of his base salary and in shares of the
Company stock under the Company Stock Incentive Plan that shall vest and become
exercisable as prescribed by the Plan. The Executive during the Employment term
shall be entitled to six weeks of vacation plus the Company designated holidays
in each year and shall, during such periods, be entitled to remuneration as
hereinbefore provided and car allowance.
4. Standard Executive Benefits. In addition to the benefits described
in Sections 4, 6 and 7, Executive and, as applicable, Executive's family, shall
be entitled to participate during the Employment Term, and if applicable, during
the Extended Employment Term in all of the Company's then prevailing Executive
benefit plans and programs which are generally available to the Company
executive management, including without limitation, any group life,
hospitalization, surgical, major medical and accidental death and dismemberment
insurance plans and/or benefits, dental, 401k and any pension or other capital
accumulation plans (collectively, the "Standard Executive Benefits").
5. Life Insurance. During the Employment Term, and, if applicable,
during the Extended Employment Term, the Company shall also have the right, from
time to time, at its election, to insure the life of Executive for the sole
benefit of the Company. In such event, the amount of insurance and type of
policy shall be determined by the Company and all premiums incurred thereon
shall be the obligation of the Company. Executive shall have no interest in any
such policy, but shall cooperate with the Company in obtaining such insurance by
submitting to physical examination, by supplying all information reasonably
required by the insurance company, and by executing all necessary documents,
provided that no financial obligation is imposed on Executive by such
requirement.
6. Death or Disability. In the event of Executive's death or disability
(as hereinafter defined) during the Employment Term, or, if applicable, during
the Extended Employment Term, the Company shall pay Executive, his designated
beneficiary or estate, in addition to all payments due under Section 4, 6 and 7,
the Supplemental Death or Disability Benefits, as the case may be, as described
below.
6.1 Supplemental Death Benefit. In the event of Executive's
death during the Employment Term, or if applicable, during the Extended
Employment Term, the Company shall pay Executive's estate a lump sum equal to
all earned yet unpaid Base Salary or Adjusted Base Salary, if any, in effect as
at such date of death plus the full amount of such Base Salary or Adjusted Base
Salary for a period ending six (6) months following the month during which the
date of such death occurred (even if such six month period extends beyond the
Termination
2
<PAGE> 3
Date), and thereafter during the remainder of the Employment Term, or, if
applicable, the Extended Employment Term, fifty percent (50%) of Executive's
Base Salary. In addition, Titan shall continue to provide Executive's family
with the Standard Executive Benefits from the date of Executive's death until
the later of (1) the expiration of the Employment Term or, if applicable, the
Extended Employment Term or (2) six months.
6.2 Supplemental Disability Benefits. In the event of
Disability of Executive (as hereinafter defined), the majority of the Company's
Board of Directors as then constituted, at its election and upon 30 days written
notice to Executive, may terminate the employment of Executive under this
Agreement effective as of the last day of the month within which the end of such
30-day period occurs (the "Disability Termination Date"). For purposes of this
Agreement the term "Disability" shall mean the inability of Executive to engage
in his regular occupation as a senior executive officer of a corporation
generally comparable to the Company at a level of compensation commensurate with
his education, training and experience for a substantially continue period which
has extended or will foreseeable extend beyond six months in duration as a
result of sickness, bodily injury, or mental or emotional disease or disorder of
any type, excluding attempted suicide or intentionally self-inflicted injury.
Upon termination of the employment of Executive by reason of Disability, the
liabilities of the Company will be as follows:
(a) During the periods referred to in (i) and (ii) below, the
Company shall continue to provide the Executive with the following direct
compensation: (i) commencing with the first day of the month next succeeding the
Disability Termination Date, a lump sum equal to all earned yet unpaid Base
Salary or Adjusted Base Salary, if any, in effect as of such Disability
Termination Date plus a monthly amount which shall be equal to one-twelfth of
Executive's Base Salary or Adjusted Base Salary, in effect as at such Disability
Termination Date, for a period of 24 months following such Disability
Termination Date (the "Disability Benefit Continuation Period"); and (ii) for
the period, if any, of Disability that extends beyond the Disability Benefit
Continuation Period referred to in (i) above, and until the date the Executive
attains age 60 or, if sooner, his death, a monthly amount which shall be equal
to one-twelfth of fifty percent (50%) of Executive's Base Salary; provided,
however, that the monthly amounts payable under (i) and (ii) above shall be
reduced by an amount equal to the sum of the amount of monthly benefits then
actually received by Executive pursuant to (A) any long-term disability
insurance plan then generally provided to executive management by the Company,
and (B) any supplemental disability insurance program then provided to Executive
by the Company.
(b) During the Disability Benefit Continuation Period, the
Company shall continue to provide Executive with full participation in the
benefits described in Sections 4, 6.1. and 6.2.
If there should be any dispute between the parties as to
Executive's incapacity or physical or mental disability at any time, such
dispute shall be determined by the written opinion of an impartial reputable
physician agreed upon for this purpose by the parties or their representatives
or, failing agreement by the parties within twenty (20) business days of the
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request by either party to the other, by a panel of three impartial reputable
physicians to be selected within twenty (20) business day of request by either
party to the other, one by Executive and one by the Company, respectively, and
one by the two physicians so selected. If the physician selected by the Company
and Executive should fail to select the third physician within ten (10) business
days of their appointment, or if either the Company or Executive should fail to
select a physician, the remaining member(s) of the panel shall be appointed by
Director of Mayo Clinic of Rochester, MN. The opinion of the majority of the
panel as to the matter in dispute shall be final and binding on the parties.
Executive shall submit to such examination(s) as may be necessary for the
purposes herein.
7. Termination. Executive's employment under this Agreement may
be terminated by the Company upon the occurrence of any of the following events:
7.1 Termination for Cause. The Company's Board of Directors as
then constituted may by a majority vote at any time terminate Executive's
employment for cause. For this purpose, "Termination for Cause" shall mean (i)
termination of the Executive's employment for willful or gross neglect of duties
hereunder, or willful or gross misconduct in the performance of such duties, so
as to cause material harm to the Company and its subsidiaries considered as a
whole, determined in good faith by its Board of Directors, (ii) termination
following a judicial determination that Executive has committed fraud,
misappropriation or embezzlement against the Company or (iii) termination due to
Executive's having committed any felony for which he is convicted and which, as
determined in good faith by the Board of Directors, and results in material harm
to the Company and its subsidiaries considered as a whole. Upon the occurrence
of a Termination for Cause, the Company's obligations under this Agreement shall
terminate, except that in the event of Termination for Cause pursuant to clause
(i) of the first sentence of this Section 7.1, the Company shall remain
obligated to pay Executive fifty percent (50%) of his Base Salary and to
continue for Executive and/or his family the full benefits described in Section
4 during the Employment Term.
7.2 Termination Without Cause. The Company's Board of
Directors, as then constituted may, at any time terminate Executive's employment
by majority vote and thereupon, unless such termination shall be pursuant to
Section 6 or 7.1, such termination shall, in all cases, constitute "Termination
Without Cause" with effect from the date of action by the Company's Board of
Directors. Any demotion from the position of President and CEO set forth in
Section 1, any material reduction in the authorities inherent to such position,
or any non-election as a Director of the Company, in each instance unless made
with Executive's prior written consent, or upon a termination pursuant to
Sections 6 or 7.1, or any non-payment or reduction in the Base Salary or
Adjusted Base Salary then in effect or any other breach by the Company of this
Agreement shall be deemed to constitute Termination Without Cause. In the event
of Executive's Termination Without Cause, the Company shall remain obligated to
pay Executive 100% of his Base Salary or Adjusted Base Salary then in effect for
three (3) years from the effective date of the Termination Without Cause, but in
no event beyond the Employment Term or, if applicable, the Extended Employment
Term, and 50% of his Base Salary or Adjusted Base Salary then in effect for the
balance of the Employment Term remaining beyond the three year period, if any,
plus all benefits described in Sections 4, 6 and 7 during the Employment Term.
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7.3 Termination for Change of Control by Executive. The
executive shall have sufficient reason to terminate this agreement if: (i) there
is a change of control of the company (as defined below); (ii) there is a
failure by the Company to comply with any material provision of this agreement
and such failure has continued for a period of ten days after notice of such
failure has been given by the executive to the company; or (iii) there is a
purported termination of the executive's employment which is not effected
pursuant to the provisions of this agreement relating to termination of the
executive's employment by the Company;
For the purposes of this agreement, a "change of control of the
company" means
(i) any Person (meaning individual, corporation, general
partnership, limited partnership, syndicate or other
group of persons) or two or more Persons acting in
concert shall have acquired after the date hereof
beneficial ownership (within the meaning of Rule 13d-3
of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or
indirectly of securities of the Company (or other
securities convertible into such securities)
representing 20% or more of the combined voting power
of securities of the company entitled to vote in the
election of directors; or
(ii) any Person or two or more Persons acting in concert
shall have acquired after the date hereof by contract
or otherwise, or shall have entered into a contract or
otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in
its or their acquisition of control over securities of
the company (or other securities convertible into such
securities) representing 20% or more of the combined
voting power of all securities of the company entitled
to vote in the election of directors; or
(iii) consummation of any merger or consolidation with
respect to which the Company or any Parent is a
constituent corporation (other than a transaction for
the purpose of changing the Company's corporate
domicile) any liquidation or dissolution of the
Company or any sale of substantially all of the assets
of Company to another corporation;
(a) In the event of a change of control (as defined above) at the
Executive's election made during the sixty (60) days period thereafter, may
terminate this Agreement and his employment hereunder by giving thirty (30) days
notice to the Company. In the event of the Executive's termination of this
Agreement under 7.3(a), the Company and/or successor shall pay the Executive
100% of his Base Salary or Adjusted Base Salary for the remaining Employment
term;
(b) In the event the Executive terminates this agreement because
of a change of control of the company, the Company and/or successor agrees to
provide fully vested supplemental retirement benefits ("Supplemental Retirement
Benefit Payments") to Executive pursuant to the following terms: (i) commencing
on the first day of the calendar month which next succeeds or coincides with
Executive's having attained 60 and on the first of each calendar
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month thereafter for and during his natural life, the Company and/or successor
shall pay to Executive the sum of $20,000.00 (the "Normal Supplemental
Retirement Benefit Payments"); (ii) alternatively, and in lieu of the Normal
Supplemental Retirement Benefits Payments, Executive, at any time after
attaining the age of 55, shall be entitled, at his election, to receive an early
supplemental retirement benefit, payable monthly, commencing on the first day of
the month following such election and on the first day of each month thereafter
during his lifetime, equal to the actuarial equivalent of the Normal
Supplemental Retirement Benefit Payments as determined at the time of such
election (the "Early Supplemental Retirement Benefits Payment"); (iii) if
Executive is married on the date of his benefit payment commence hereunder, he
may elect by notice to the Company and as an alternative to either the Normal
Supplemental Retirement Benefit Payments or Early Supplemental Retirement
Benefit Payments, a reduced pension benefit at age 60 or at such earlier date
after obtaining the age of 55 in the form of a standard joint and survivor
annuity based on the life expectancies of Executive and his spouse to be paid to
Executive and his spouse during their natural lifetimes; and (iv) at the
Executive's election, the Supplemental Retirement Benefits Payments, as elected
by the Executive pursuant to (i) through (iii) above, may be made at any time in
the form of a single life annuity of which the Executive is the annuitant and
owner;
(c) If the Executive terminates this agreement because of a change of
control of the company, the Company agrees to provide for and during their
natural lifetimes Executive and his spouse and dependents which live in the
household shall receive, at no cost and expense to them, fully vested group
medical (including hospitalization, surgical, and major medical) and dental
insurance benefits provided or furnished or made available under the Company's
Plan (at Executive, or in the event of Executive death, at Executive's spouse's
election with respect to which plan) then prevailing Executive benefit plans to
the then employed highest level executive officers' of either of them from time
to time. The Company shall pay the full premiums for all such benefits furnished
through group insurance plans as well as all other charges and expenses for
providing such benefits;
(d) In the event of a change of control of the Company, all outstanding
stock options and the Employer match under the Company's 401k Plan for the
Executive shall vest 100% immediately; and
(e) In the event of a change of control of the Company, the Company
shall provide, as a condition of such sale, that the acquiring Person shall
assume this Agreement and become obligated to perform all of the terms and
conditions hereof.
8. Successors and Assigns This Agreement shall be binding upon any
successor or assigns of the Company and a successor or assigns shall be any
surviving corporation under which it might be merged or consolidated or the
purchaser of substantially all of the assets of the Company.
9. Termination. This Agreement shall terminate upon the death of both
Executive and his spouse or earlier if mutually agreed upon by the Executive and
the Company.
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10. Expenses. The Company will pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
without limitation expenses for entertainment, travel (including automobile
operating expenses), meals, hotel accommodations and other ordinary and
necessary activities incurred on behalf of the company, subject to reasonable
documentation of such expenses by Executive.
11. Supplemental Retirement Benefits. The Company agrees to provide
fully vested supplemental retirement benefits ("Supplemental Retirement Benefit
Payments") to Executive pursuant to the following terms: (i) commencing on the
first day of the calendar month which next succeeds or coincides with
Executive's having attained 60 and on the first of each calendar month
thereafter for and during his natural life, the Company and/or successor shall
pay to Executive the sum of $20,000.00 (the "Normal Supplemental Retirement
Benefit Payments"); (ii) alternatively, and in lieu of the Normal Supplemental
Retirement Benefits Payments, Executive, at any time after attaining the age of
55, shall be entitled, at his election, to receive an early supplemental
retirement benefit, payable monthly, commencing on the first day of the month
following such election and on the first day of each month thereafter during his
lifetime, equal to the actuarial equivalent of the Normal Supplemental
Retirement Benefit Payments as determined at the time of such election (the
"Early Supplemental Retirement Benefits Payment"); (iii) if Executive is married
on the date of his benefit payment commence hereunder, he may elect by notice to
the Company and as an alternative to either the Normal Supplemental Retirement
Benefit Payments or Early Supplemental Retirement Benefit Payments, a reduced
pension benefit at age 60 or at such earlier date after obtaining the age of 55
in the form of a standard joint and survivor annuity based on the life
expectancies of Executive and his spouse to be paid to Executive and his spouse
during their natural lifetimes; and (iv) at the Company's election, the
Supplemental Retirement Benefits Payments, as elected by Executive pursuant to
(i) through (iii) above, may be made at any time in the form of a single life
annuity of which Executive is the annuitant and owner.
12. Retirement Medical Benefits. The Company agrees to provide for and
during their natural lifetimes Executive and his spouse and dependents which
live in the household shall receive, at no cost and expense to them, fully
vested group medical (including hospitalization, surgical, and major medical)
and dental insurance benefits provided or furnished or made available under the
Company's Plan (at Executive, or in the event of Executive death, at Executive's
spouse's election with respect to which plan) then prevailing Executive benefit
plans to the then employed highest level executive officers' of either of them
from time to time. The Company shall pay the full premiums for all such benefits
furnished through group insurance plans as well as all other charges and
expenses for providing such benefits.
13. Stock Options. In the event of a change of control of the Company,
all outstanding stock options and the Employer match under the Company's 401k
Plan for the Executive shall vest 100% immediately.
14. Inventions and Improvements. Any invention or development of any
kind
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related to the Company's business made or conceived by Executive (solely,
jointly or in conjunction with anyone else) while he is employed by the Company
pursuant to this Agreement shall be promptly disclosed by Executive to the
Company and shall be the sole property of the Company. Executive shall execute
an assignment to the Company, or to another designated by it, of his entire
claim to and interest in each such invention or development. Executive
undertakes to sign all lawful papers and, at the Company's expense, to assist it
in every lawful way to obtain and sustain patents or copyrights for its benefit
in any such inventions or developments when requested by the Company. Executive
shall not be entitled to compensation beyond his Base Salary or Adjusted Base
Salary for the performance of any such acts.
15. Confidential Information. Executive acknowledges that by reason of
his employment with the Company he has and will hereafter, from time to time
during his Employment Term, and, if applicable, during the Extended Employment
Term, become exposed to and/or become knowledgeable about proposals, plans,
inventions, practices, systems, programs, formulas, customer lists, and other
forms of business information which are not known to the Company's competitors
and which are not recognized as being encompassed within standard business
management practices and which are kept secret and confidential by Executive
(the "Confidential Information"). Executive therefore agrees that at no time
during or after the period of his employment by the Company will he disclose or
use the Confidential Information except as may be required in the prudent course
of business for the benefit of the Company, provided, that no payment required
to be made by the Company under the terms of this Agreement including the
Exhibits hereto after termination of the employment of Executive shall be
subject to any right of set-off, counterclaim, defense, abatement, suspension,
deferment or reduction by reason of any claim against Executive based upon
breach of the covenant in this Section 12 other than execution of an unsatisfied
final judgment rendered by a court of competent jurisdiction.
16. Competition. Executive hereby agrees that until the termination of
his employment under this Agreement, and for a period of three (3) years
thereafter, he will not, unless authorized in writing to do so by the Company,
directly or indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or otherwise
connected in any substantial manner with any business which directly competes to
a material extent with line of business of the Company or its subsidiaries that
is material to the businesses, financial condition or prospects of the Company
and its subsidiaries considered as a whole; provided that nothing in this
paragraph shall prohibit Executive from acquiring up to 5% of any class of
outstanding equity securities of any corporation whose equity securities are
regularly traded on a national securities exchange or in the "over-the-counter
market".
17. Relocation. Executive shall not be required to relocate his
residence during the Employment Term or, if applicable, during the Extended
Employment Term, without his consent. If the Board of Directors of the Company
approves or requires relocation of its Executive from Grosse Pointe Farms,
Michigan and if such relocation reasonably would require Executive to move and
thereby sell his present residence and purchase a different one and if Executive
consents to relocate his residence to such new location, then the Company shall
pay all
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reasonably requested moving and relocation expenses including but not limited to
real estate commissions, legal fees and costs, appraisals, title insurance,
surveys and inspections directly related to such sale and closing and financing
costs directly related to the purchase or construction of a new residence. In
addition, the Company will indemnify Executive for any net loss (measured by the
difference between (a) the average of two current appraisals by recognized
appraisers mutually agreed upon by the parties, and (b) the actual selling price
of the residence) arising from the sale of his residence (caused by such
required relocation): provided, however, that the Company shall alternatively
have a right of first refusal to acquire the residence at the average appraisal
price giving rise to such loss. Notwithstanding the foregoing, Executive shall
have the right to relocate his residence and perform his services hereunder at a
location other than the Company's corporate executive headquarters in Quincy,
Illinois, or the successor location thereto, so long as such relocation and
performance of services does not prevent the fulfillment of his duties and
obligations hereunder. The Executive shall have the right to have a bedroom
assigned to him exclusively at the Company House at all times.
18. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association and judgment
upon such award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be held in Illinois unless another
location shall be mutually agreed to by the parties at the time of the
arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against him, the Company shall pay all legal
fees incurred by Executive in connection with the dispute over such claim(s). If
more than one is involved in any dispute and if Executive is sustained as to one
or more of such claims but not as to all of such claims, there shall be a
reasonable allocation of applicable legal expenses. The Company will reimburse
Executive for those legal expenses determined by the arbitrator(s) or by the
consent of the parties to be allocable to the claim or claims as to which
Executive is upheld.
19. Binding Effect: Amendments. The Executive's undertakings hereunder
will be binding regardless of (i) the duration of his employment with the
Company; or (ii) the reasons for or manner of termination of his employment.
This Agreement will bind and inure to the benefit of the heirs, personal
representatives, successors and assigns of the parties, will supersede any prior
understanding between the parties relating to the same subject matter and may be
modified and amended only in writing signed by the parties hereto.
20. Notices. All notices hereunder shall be given in writing by
personal delivery or facsimile or by registered mail addressed to the Company at
is principal place of business and to Executive at his residence address as then
listed in the Company's records.
21. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois and jurisdiction of the State
of Illinois.
22. Survival. Termination of the Executive's employment whether
voluntary or involuntary, whether with or without cause, shall not relieve the
Company and/or its successor from their obligations hereunder. All of Sections
6, 7, 11, 12, 14 shall survive the termination of
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this agreement and shall not relieve the Company and/or successor from their
obligations under these Sections.
23. Miscellaneous. (a) the failure of a party to insist on any occasion
upon strict adherence to any term of this Agreement shall not be considered to
be a waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing signed by the party waiving any right; (b) the underlined captions in
this Agreement at the beginning of Sections are for reference only and shall not
be deemed to define or limit the provisions hereof or to affect their
construction and application; (c) the parties agree that this Agreement may be
executed in any number of counterparts, and in the event, each counterpart shall
be deemed a complete original and be enforceable without reference to any other
counterpart and (d) the invalidity or unenforceability of any one or more
sections or provisions hereof shall not affect the validity or enforceability of
any one or more of the other sections or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TITAN INTERNATIONAL, INC
By: /s/ Erwin H. Billig
-----------------------------------
Erwin H. Billig
By: /s/ Maurice M. Taylor, Jr.
-----------------------------------
Maurice M. Taylor, Jr.
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EXHIBIT 10(iii)(A)(2)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 2000, between Titan
International, Inc., a Illinois corporation ("Titan" "the Company") and its
successor (s), and Michael Akers ("Executive") (hereinafter, as amended or
modified and in effect called "Agreement"). The effective date of this Agreement
(the "Effective Date") shall be January 30, 2000.
INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:
1. Position. Titan agrees to employ Executive and Executive
agrees to accept employment as President of Titan Europe Ltd. pursuant to the
terms of this Agreement. Executive will perform such services in the capacity of
President of Titan Europe as may be assigned to him by the By-laws and, from
time to time by the President of Titan during the Employment Term and, if
applicable, during the Extended Employment Term, (as such terms are defined in
Section 2). Executive will devote such of his business skill, time and effort to
his employment hereunder as shall be reasonably necessary to discharge his
obligations hereunder.
2. Employment Term. Executive's term of employment by Titan under
this Agreement will begin on the Effective Date and will terminate on the date
five years after the Effective Date (the "Employment Term"), unless terminated
earlier as provided in Sections 5 and 6 hereof.
Subject to the provisions of Sections 5 and 6 of this
Agreement, this Agreement shall automatically and without requirement for action
by either party be extended for an additional one year period, and similarly
shall be automatically extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the "Extended Employment Term"), unless notice of nonrenewal is given in
accordance with the provisions of the following three sentences. If either party
desires not to continue the employment of Executive under this Agreement beyond
the Employment Term, or, if applicable, beyond the Extended Employment Term (the
last day of the Employment Term, or the last day of the Extended Employment
Term, if applicable, is hereinafter referred to as the "Termination Date"), that
party shall at least twelve (12) months but not more than sixteen (16) months
prior to the Termination Date give written notice to such effect to the other
party. Unless the notice of nonrenewal is thereafter revoked prior to the
Termination Date by the party giving notice, and the party receiving notice of
such nonrenewal consents in writing to the revocation thereof, the employment of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by President.
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3. Direct Compensation. For his service hereunder during the
Employment Term and, if applicable, during the Extended Employment Term,
Executive will receive a base salary payable at an annual rate of $ 207,500.00
(the "Base Salary"), to be paid in accordance with the normal practices for
remunerating Titan executive management. Nothing in this Agreement will be
deemed to prohibit an increase at any time in the Base Salary if Titan's Board
of Directors approves. (The Base Salary, if so adjusted, is herein called the
"Adjusted Base Salary"). In addition to salary, each calendar year, the
Executive shall be entitled to receive a minimum bonus of twenty five percent
(25%) up to a maximum of one hundred percent (100%) of his salary based on
performance with specified criteria. The Board of Directors will establish the
bonus and performance standards at the beginning of each year. The Executive
shall receive stock options of up to a minimum of fifty percent (50%) of his
base salary in shares of the Company stock under the Company Stock Incentive
Plan that shall vest and become exercisable as prescribed by the Plan. The
Executive during the Employment term shall be entitled to three weeks of
vacation plus Titan designated holidays in each year and shall, during such
periods, be entitled to remuneration as hereinbefore provided. The Executive
shall continue to receive any benefit he currently receives in addition to
benefits described in Section 4, 5 and 6.
4. Standard Executive Benefits. In addition to the benefits
described in Sections 4, 5 and 6, Executive and, as applicable, Executive's
family, shall be entitled to participate during the Employment Term, and if
applicable, during the Extended Employment Term in all of Titan's then
prevailing Executive benefit plans and programs which are generally available to
Titan executive management, including without limitation, any group life,
hospitalization, surgical, major medical and accidental death and dismemberment
insurance plans and/or benefits, dental, and any pension or other capital
accumulation plans (collectively, the "Standard Executive Benefits").
5. Death or Disability. In the event of Executive's death or
disability hereinafter defined) during the Employment Term, or, if applicable,
during the Extended Employment Term, Titan shall pay Executive, his designated
beneficiary or estate, in addition to all payments due under Section 4, 5 and 6,
the Supplemental Death or Disability Benefits, as the case may be, as described
below.
5.1 Supplemental Death Benefit. In the event of Executive's
death during the Employment Term, or if applicable, during the Extended
Employment Term, Titan shall pay Executive's estate a lump sum equal to all
earned yet unpaid Base Salary or Adjusted Base Salary, if any, in effect as at
such date of death plus the full amount of such Base Salary or Adjusted Base
Salary for a period ending six (6) months following the month during which the
date of such death occurred (even if such six month period extends beyond the
Termination Date), and thereafter during the remainder of the Employment Term,
or, if applicable, the Extended Employment Term, fifty percent
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(50%) of Executive's Base Salary. In addition, Titan shall continue to provide
Executive's family with the Standard Executive Benefits from the date of
Executive's death until the later of (1) the expiration of the Employment Term
or, if applicable, the Extended Employment Term or (2) six months.
5.2 Supplemental Disability Benefits. In the event of
Disability of Executive (as hereinafter defined), the majority of Titan's Board
of Directors as then constituted, at its election and upon 30 days written
notice to Executive, may terminate the employment of Executive under this
Agreement effective as of the last day of the month within which the end of such
30-day period occurs (the "Disability Termination Date"). For purposes of this
Agreement the term "Disability" shall mean the inability of Executive to engage
in his regular occupation as a senior executive officer of a corporation
generally comparable to Titan at a level of compensation commensurate with his
education, training and experience for a substantially continue period which has
extended or will foreseeable extend beyond six months in duration as a result of
sickness, bodily injury, or mental or emotional disease or disorder of any type,
excluding attempted suicide or intentionally self-inflicted injury. Upon
termination of the employment of Executive by reason of Disability, the
liabilities of Titan will be as follows:
(a) During the periods referred to in (i) and (ii) below,
Titan shall continue to provide the Executive with the following direct
compensation: (i) commencing with the first day of the month next succeeding the
Disability Termination Date, a lump sum equal to all earned yet unpaid Base
Salary or Adjusted Base Salary, if any, in effect as of such Disability
Termination Date plus a monthly amount which shall be equal to one-twelfth of
Executive's Base Salary or Adjusted Base Salary, in effect as at such Disability
Termination Date, for a period of 24 months following such Disability
Termination Date (the "Disability Benefit Continuation Period"); and (ii) for
the period, if any, of Disability that extends beyond the Disability Benefit
Continuation Period referred to in (i) above, and until the date the Executive
attains age 60 or, if sooner, his death, a monthly amount which shall be equal
to one-twelfth of fifty percent (50%) of Executive's Base Salary; provided,
however, that the monthly amounts payable under (i) and (ii) above shall be
reduced by an amount equal to the sum of the amount of monthly benefits then
actually received by Executive pursuant to (A) any long-term disability
insurance plan then generally provided to executive management by Titan, and (B)
any supplemental disability insurance program then provided to Executive by
Titan.
(b) During the Disability Benefit Continuation Period, Titan
shall continue to provide Executive with full participation in the benefits
described in Sections 4, 5.1 and 5.2.
If there should be any dispute between the parties as to
Executive's incapacity or physical or mental disability at any time, such
dispute shall be determined by the written opinion of an impartial reputable
physician agreed upon for this purpose by
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the parties or their representatives or, failing Agreement by the parties within
twenty (20) business days of the request by either party to the other, by a
panel of three impartial reputable physicians to be selected within twenty (20)
business day of request by either party to the other, one by Executive and one
by Titan, respectively, and one by the two physicians so selected. If the
physician selected by Titan and Executive should fail to select the third
physician within ten (10) business days of their appointment, or if either Titan
or Executive should fail to select a physician, the remaining member(s) of the
panel shall be appointed by Director of Mayo Clinic of Rochester, MN. The
opinion of the majority of the panel as to the matter in dispute shall be final
and binding on the parties. Executive shall submit to such examination(s) as may
be necessary for the purposes herein.
6. Termination. Executive's employment under this Agreement may
be terminated by Titan upon the occurrence of any of the following events:
6.1 Termination for Cause. If Titan terminates the Executive's
employment for cause, for this purpose, "Termination for Cause" shall mean (i)
termination of the Executive's employment for willful or gross neglect of duties
hereunder, or willful or gross misconduct in the performance of such duties, so
as to cause material harm to Titan and its subsidiaries considered as a whole,
determined in good faith by the President, (ii) termination following a judicial
determination that Executive has committed fraud, misappropriation or
embezzlement against Titan or (iii) termination due to Executive's having
committed any felony for which he is convicted and which, as determined in good
faith by the President and results in material harm to Titan and its
subsidiaries considered as a whole. Upon the occurrence of a Termination for
Cause, Titan's obligations under this Agreement shall terminate, except that in
the event of Termination for Cause pursuant to clause (i) of the first sentence
of this Section 6.1, Titan shall remain obligated to pay Executive fifty percent
(50%) of his Base Salary and to continue for Executive and/or his family the
full benefits described in Section 4 during the Employment Term.
6.2 Termination Without Cause. If Titan terminates the
Executive's employment and unless such termination shall be pursuant to Section
5 or 6.1, such termination shall, in all cases, constitute "Termination Without
Cause" with effect from the date of action by Titan. Any demotion from the
position of President of Titan Europe Ltd., set forth in Section 1, or any
material reduction in the authorities inherent to such position, in each
instance unless made with Executive's prior written consent, or upon a
termination pursuant to Sections 5 or 6.1, or any non-payment or reduction in
the Base Salary or Adjusted Base Salary then in effect or any other breach by
Titan of this Agreement shall be deemed to constitute Termination Without Cause:
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(a) In the event of Executive's Termination Without Cause,
Titan shall remain obligated to pay Executive 100% of his Base Salary or
Adjusted Base Salary then in effect for three (3) years from the effective date
of the Termination Without Cause, but in no event beyond the Employment Term or,
if applicable, the Extended Employment Term, and 50% of his Base Salary or
Adjusted Base Salary then in effect for the balance of the Employment Term
remaining beyond the three year period, if any, plus all benefits described in
Sections 4, 5 and 6 during the Employment Term;
(b) In the event of Executive's Termination Without Cause,
Titan agrees to provide for of the Executive and his spouse and dependents which
live in the household shall receive, at not cost and expense to them for the
remaining Employment term, group medical (including hospitalization, surgical,
and major medical) and dental insurance benefits provided or furnished or made
available under Titan's Plan (at Executive, or in the event of Executive death,
at Executive's spouse's election with respect to which plan) then prevailing
Executive benefit plans to the then employed highest level executive officers'
of either of them from time to time. Titan shall pay the full premiums for all
such benefits furnished through group insurance plans as well as all other
charges and expenses for providing such benefits;
(c) In the event of Executive's Termination Without Cause,
Titan agrees all outstanding stock options and the Employer match under Titan's
401k Plan for the Executive shall vest 100% immediately; and
(d) In the event of Executive's Termination Without Cause,
Titan shall provide, as a condition of any such sale, that the acquiring
corporation and successor shall assume this Agreement and become obligated to
perform all of the terms and conditions hereof.
7. Successors and Assigns. This Agreement shall be binding upon
any successor or assigns of Titan and a successor or assigns shall be any
surviving corporation under which it might be merged or consolidated or the
purchaser of substantially all of the assets of Titan.
8. Termination. This Agreement shall terminate upon the death of
both Executive and his spouse or earlier if mutually agreed upon by the
Executive and Titan.
9. Expenses. Titan will pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
including, without. limitation expenses for entertainment, travel (including
automobile operating expenses), meals, hotel accommodations and other ordinary
and necessary activities incurred on behalf of the company, subject to
reasonable documentation of such expenses by Executive.
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10. Inventions and Improvements. Any invention or development of
any kind related to Titan's business made or conceived by Executive (solely,
jointly or in conjunction with anyone else) while he is employed by Titan
pursuant to this Agreement shall be promptly disclosed by Executive to Titan and
shall be the sole property of Titan. Executive shall execute an assignment to
Titan, or to another designated by it, of his entire claim to and interest in
each such invention or development. Executive undertakes to sign all lawful
papers and, at Titan's expense, to assist it in every lawful way to obtain and
sustain patents or copyrights for its benefit in any such inventions or
developments when requested by Titan. Executive shall not be entitled to
compensation beyond his Base Salary or Adjusted Base Salary for the performance
of any such acts.
11. Confidential Information.. Executive acknowledges that by
reason of his employment with Titan he has and will hereafter, from time to time
during his Employment Term, and, if applicable, during the Extended Employment
Term, become exposed to and/or become knowledgeable about proposals, plans,
inventions, practices, systems, programs, formulas, customer lists, and other
forms of business information which are not known to Titan's competitors and
which are not recognized as being encompassed within standard business
management practices and which are kept secret and confidential by Executive
(the "Confidential Information"). Executive therefore agrees that at no time
during or after the period of his employment by Titan will he disclose or use
the Confidential Information except as may be required in the prudent course of
business for the benefit of Titan, provided, that no payment required to be made
by Titan under the terms of this Agreement including the Exhibits hereto after
termination of the employment of Executive shall be subject to any right of
set-off, counterclaim, defense, abatement, suspension, deferment or reduction by
reason of any claim against Executive based upon breach of the covenant in this
Section 12 other than execution of an unsatisfied final judgment rendered by a
court of competent jurisdiction.
12. Competition. Executive hereby agrees that until the
termination of his employment under this Agreement, and for a period of three
(3) years thereafter, he will not, unless authorized in writing to do so by
Titan, directly or indirectly own, manage, operate, join, control or participate
in the ownership, management, operation or control of, or be employed or
otherwise connected in any substantial manner with any business which directly
competes to a material extent with line of business of Titan or its subsidiaries
that is material to the businesses, financial condition or prospects of Titan
and its subsidiaries considered as a whole; provided that nothing in this
paragraph shall prohibit Executive from acquiring up to 5% of any class of
outstanding equity securities of any corporation whose equity securities are
regularly traded on a national securities exchange or in the "over-the-counter
market".
13. Relocation. Executive shall not be required to relocate his
residence during the Employment Term or, if applicable, during the Extended
Employment Term,
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without his consent. If the Board of Directors of Titan approves or requires
relocation of its executive from England and if such relocation reasonably would
require Executive to move and thereby sell his present residence and purchase a
different one and if Executive consents to relocate his residence to such new
location, then Titan shall pay all reasonably requested moving and relocation
expenses including but not limited to real estate commissions, legal fees and
costs, appraisals, title insurance, surveys and inspections directly related to
such sale and closing and financing costs directly related to the purchase or
construction of a new residence. In addition, Titan will indemnify Executive for
any net loss (measured by the difference between (a) the average of two current
appraisals by recognized appraisers mutually agreed upon by the parties, and (b)
the actual selling price of the residence) arising from the sale of his
residence (caused by such required relocation): provided, however, that Titan
shall alternatively have a right of first refusal to acquire the residence at
the average appraisal price giving rise to such loss. Notwithstanding the
foregoing, Executive shall have the right to relocate his residence and perform
his services hereunder at a location other than Titan's England facility or the
successor location thereto, so long as such relocation and performance of
services does not prevent the fulfillment of his duties and obligations
hereunder.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration Association
and judgment upon such award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The arbitration shall be held in Illinois
unless another location shall be mutually agreed to by the parties at the time
of the arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against him, Titan shall pay all legal fees
incurred by Executive in connection with the dispute over such claim(s). If more
than one is involved in any dispute and if Executive is sustained as to one or
more of such claims but not as to all of such claims, there shall be a
reasonable allocation of applicable legal expenses. Titan will reimburse
Executive for those legal expenses determined by the arbitrator(s) or by the
consent of the parties to be allocable to the claim or claims as to which
Executive is upheld.
15. Binding Effect: Amendments. Executive's undertakings hereunder
will be binding regardless of (i) the duration of his employment with Titan; or
(ii) the reasons for or manner of termination of his employment. This Agreement
will bind and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, will supersede any prior understanding
between the parties relating to the same subject matter and may be modified and
varied only in writing signed by the parties hereto.
16. Notices. All notices hereunder shall be given in writing by
personal delivery or by registered mail addressed to Titan at is principal place
of business and to Executive at his residence address as then listed in Titan's
records.
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17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and jurisdiction
of the State of Illinois.
18. Miscellaneous. (a) the failure of a party to insist on any
occasion upon strict adherence to any term of this Agreement shall not be
considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing signed by the party waiving any right; (b) the
underlined captions in this Agreement at the beginning of Sections are for
reference only and shall not be deemed to define or limit the provisions hereof
or to affect their construction and application; (c) the parties agree that this
Agreement may be executed in any number of counterparts, and in the event, each
counterpart shall be deemed a complete original and be enforceable without
reference to any other counterpart.
19. Survival. Termination of the Executive's employment whether
voluntary or involuntary, whether with or without cause, shall not relieve the
Company and/or its successor (s) from their obligations hereunder. All of
Sections 5 and 6 and shall survive the termination of this Agreement and shall
not relieve the Company and/or successor from their obligations under these
Sections.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TITAN INTERNATIONAL, INC
By: /s/ Maurice M. Taylor, Jr.,
-----------------------------------
Maurice M. Taylor, Jr., President
/s/ Michael Akers
-----------------------------------
Michael Akers
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EXHIBIT 10(iii)(A)(3)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 2000, between The Company
International, Inc., a Illinois corporation ("Titan" and/or "the Company") and
its successor (s), and Kent W. Hackamack ("Executive") (hereinafter, as amended
or modified and in effect called "Agreement"). The effective date of this
Agreement (the "Effective Date") shall be January 30, 2000.
INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:
1. Position. Titan agrees to employ Executive and Executive
agrees to accept employment as Vice President of Finance and Treasurer of the
Titan pursuant to the terms of this Agreement. Executive will perform such
services in the capacity of Vice President and Treasurer as may be assigned to
him by the By-laws and, from time to time by the Board of Directors of the Titan
during the Employment Term and, if applicable, during the Extended Employment
Term, (as such terms are defined in Section 2). Executive will devote such of
his business skill, time and effort to his employment hereunder as shall be
reasonably necessary to discharge his obligations hereunder.
2. Employment Term. Executive's term of employment by Titan
under this Agreement will begin on the Effective Date and will terminate on the
date five years after the Effective Date (the "Employment Term"), unless
terminated earlier as provided in Sections 5 and 6 hereof.
Subject to the provisions of Sections 5 and 6 of this
Agreement, this Agreement shall automatically and without requirement for action
by either party be extended for an additional one year period, and similarly
shall be automatically extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the "Extended Employment Term"), unless notice of nonrenewal is given in
accordance with the provisions of the following three sentences. If either party
desires not to continue the employment of Executive under this Agreement beyond
the Employment Term, or, if applicable, beyond the Extended Employment Term (the
last day of the Employment Term, or the last day of the Extended Employment
Term, if applicable, is hereinafter referred to as the "Termination Date"), that
party shall at least twelve (12) months but not more than sixteen (16) months
prior to the Termination Date give written notice to such effect to the other
party. Unless the notice of nonrenewal is thereafter revoked prior to the
Termination Date by the party giving notice, and the party receiving notice of
such nonrenewal consents in writing to the revocation thereof, the employment of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by President.
3. Direct Compensation. For his service hereunder during the
Employment Term and, if applicable, during the Extended Employment Term,
Executive will receive a base salary payable at an annual rate of $ 150,000.00
(the "Base Salary"), to be paid in accordance with the normal practices for
remunerating Titan executive management. Nothing in this
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Agreement will be deemed to prohibit an increase at any time in the Base Salary
if the Titan's Board of Directors approves. (The Base Salary, if so adjusted, is
herein called the "Adjusted Base Salary"). In addition to salary, each calendar
year, the Executive shall be entitled to receive a minimum bonus of twenty five
percent (25%) up to a maximum of seventy five percent (75%) of his salary based
on performance with specified criteria. The Board of Directors will establish
the bonus and performance standards at the beginning of each year. The Executive
shall receive stock options of up to a minimum of fifty percent (50%) of his
base salary in shares of Titan stock under Titan Stock Incentive Plan that shall
vest and become exercisable as prescribed by the Plan. The Executive during the
Employment term shall be entitled to three weeks of vacation plus Titan
designated holidays in each year and shall, during such periods, be entitled to
remuneration as hereinbefore provided and car allowance.
4. Standard Executive Benefits. In addition to the benefits described
in Sections 4, 6 and 7, Executive and, as applicable, Executive's family, shall
be entitled to participate during the Employment Term, and if applicable, during
the Extended Employment Term in all of the Titan's then prevailing Executive
benefit plans and programs which are generally available to Titan executive
management, including without limitation, any group life, hospitalization,
surgical, major medical and accidental death and dismemberment insurance plans
and/or benefits, dental, 401k and any pension or other capital accumulation
plans (collectively, the "Standard Executive Benefits").
5. Death or Disability. In the event of Executive's death or
disability (as hereafter defined) during the Employment Term, or, if applicable,
during the Extended Employment Term, Titan shall pay Executive, his designated
beneficiary or estate, in addition to all payments due under Section 4, 5 and 6,
the Supplemental Death or Disability Benefits, as the case may be, as described
below.
5.1 Supplemental Death Benefit. In the event of Executive's
death during the Employment Term, or if applicable, during the Extended
Employment Term, the Titan shall pay Executive's estate a lump sum equal to all
earned yet unpaid Base Salary or Adjusted Base Salary, if any, in effect as at
such date of death plus the full amount of such Base Salary or Adjusted Base
Salary for a period ending six (6) months following the month during which the
date of such death occurred (even if such six month period extends beyond the
Termination Date), and thereafter during the remainder of the Employment Term,
or, if applicable, the Extended Employment Term, fifty percent (50%) of
Executive's Base Salary. In addition, Titan shall continue to provide
Executive's family with the Standard Executive Benefits from the date of
Executive's death until the later of (1) the expiration of the Employment Term
or, if applicable, the Extended Employment Term or (2) six months.
5.2 Supplemental Disability Benefits. In the event of
Disability of Executive (as hereinafter defined), the majority of Titan's Board
of Directors as then constituted, at its election and upon 30 days written
notice to Executive, may terminate the employment of Executive under this
Agreement effective as of the last day of the month within which the end of such
30-day period occurs (the "Disability Termination Date"). For purposes of this
Agreement the term "Disability" shall mean the inability of Executive to engage
in his regular occupation as
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a senior executive officer of a corporation generally comparable to Titan at a
level of compensation commensurate with his education, training and experience
for a substantially continue period which has extended or will foreseeable
extend beyond six months in duration as a result of sickness, bodily injury, or
mental or emotional disease or disorder of any type, excluding attempted suicide
or intentionally self-inflicted injury. Upon termination of the employment of
Executive by reason of Disability, the liabilities of Titan will be as follows:
a. During the periods referred to in (i) and (ii) below, Titan
shall continue to provide the Executive with the following direct compensation:
(i) commencing with the first day of the month next succeeding the Disability
Termination Date, a lump sum equal to all earned yet unpaid Base Salary or
Adjusted Base Salary, if any, in effect as of such Disability Termination Date
plus a monthly amount which shall be equal to one-twelfth of Executive's Base
Salary or Adjusted Base Salary, in effect as at such Disability Termination
Date, for a period of 24 months following such Disability Termination Date (the
"Disability Benefit Continuation Period"); and (ii) for the period, if any, of
Disability that extends beyond the Disability Benefit Continuation Period
referred to in (i) above, and until the date the Executive attains age 60 or, if
sooner, his death, a monthly amount which shall be equal to one-twelfth of fifty
percent (50%) of Executive's Base Salary; provided, however, that the monthly
amounts payable under (i) and (ii) above shall be reduced by an amount equal to
the sum of the amount of monthly benefits then actually received by Executive
pursuant to (A) any long-term disability insurance plan then generally provided
to executive management by Titan, and (B) any supplemental disability insurance
program then provided to the Executive by Titan.
(b) During the Disability Benefit Continuation Period, Titan
shall continue to provide Executive with full participation in the benefits
described in Sections 4, 5.1. and 5.2.
If there should be any dispute between the parties as to
Executive's incapacity or physical or mental disability at any time, such
dispute shall be determined by the written opinion of an impartial reputable
physician agreed upon for this purpose by the parties or their representatives
or, failing Agreement by the parties within twenty (20) business days of the
request by either party to the other, by a panel of three impartial reputable
physicians to be selected within twenty (20) business day of request by either
party to the other, one by Executive and one by Titan, respectively, and one by
the two physicians so selected. If the physician selected by Titan and Executive
should fail to select the third physician within ten (10) business days of their
appointment, or if either Titan or Executive should fail to select a physician,
the remaining member(s) of the panel shall be appointed by Director of Mayo
Clinic of Rochester, MN. The opinion of the majority of the panel as to the
matter in dispute shall be final and binding on the parties. Executive shall
submit to such examination(s) as may be necessary for the purposes herein.
6. Termination. Executive's employment under this Agreement may
be terminated by Titan upon the occurrence of any of the following events:
6.1 Termination for Cause. Titan's Board of Directors may by a
majority
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vote at any time terminate Executive's employment for cause. For this purpose,
"Termination for Cause" shall mean (i) termination of the Executive's employment
for willful or gross neglect of duties hereunder, or willful or gross misconduct
in the performance of such duties, so as to cause material harm to Titan and its
subsidiaries considered as a whole, determined in good faith by its Board of
Directors, (ii) termination following a judicial determination that Executive
has committed fraud, misappropriation or embezzlement agains Titan or (iii)
termination due to Executive's having committed any felony for which he is
convicted and which, as determined in good faith by the Board of Directors and
results in material harm to Titan and its subsidiaries considered as a whole.
Upon the occurrence of a Termination for Cause, Titan's obligations under this
Agreement shall terminate, except that in the event of Termination for Cause
pursuant to clause (i) of the first sentence of this Section 6.1, Titan shall
remain obligated to pay Executive fifty percent (50%) of his Base Salary and to
continue for Executive and/or his family the full benefits described in Section
4 during the Employment Term.
6.2 Termination Without Cause. Titan's Board of Directors may
at any time terminate Executive's employment by majority vote and thereupon,
unless such termination shall be pursuant to Section 5 or 6.1, such termination
shall, in all cases, constitute "Termination Without Cause" with effect from the
date of action by the Titan's Board of Directors. Any demotion from the position
of Vice President set forth in Section 1, or any material reduction in the
authorities inherent to such position, in each instance unless made with
Executive's prior written consent, or upon a termination pursuant to Sections 5
or 6.1, or any non-payment or reduction in the Base Salary or Adjusted Base
Salary then in effect or any other breach by Titan of this Agreement shall be
deemed to constitute Termination Without Cause. In the event of Executive's
Termination Without Cause, Titan shall remain obligated to pay Executive 100% of
his Base Salary or Adjusted Base Salary then in effect for three (3) years from
the effective date of the Termination Without Cause, but in no event beyond the
Employment Term or, if applicable, the Extended Employment Term, and 50% of his
Base Salary or Adjusted Base Salary then in effect for the balance of the
Employment Term remaining beyond the three year period, if any, plus all
benefits described in Sections 4, 5 and 6 during the Employment Term.
6.3 Termination by Executive The executive shall have
sufficient reason to terminate this Agreement if: (i) there is a change of
control of Titan (as defined below); (ii) there is a failure by Titan to comply
with any material provision of this Agreement and such failure has continued for
a period of ten days after notice of such failure has been given by the
executive to Titan; or (iii) there is a purported termination of the executive's
employment which is not effected pursuant to the provisions of this Agreement
relating to termination of the executive's employment by Titan;
For the purposes of this Agreement, a "change of control of Titan"
means
(i) any Person (meaning individual, corporation, general
partnership, limited partnership, syndicate or other
group of persons) or two or more Persons acting in
concert shall have acquired after the date hereof
beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934),
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directly or indirectly of securities of Titan (or
other securities convertible into such securities)
representing 20% or more of the combined voting power
of securities of Titan entitled to vote in the
election of directors; or
(ii) any Person or two or more Persons acting in concert
shall have acquired after the date hereof by contract
or otherwise, or shall have entered into a contract
or otherwise, or shall have entered into a contract
or arrangement that, upon consummation, will result
in its or their acquisition of control over
securities of Titan (or other securities convertible
into such securities) representing 20% or more of the
combined voting power of all securities of Titan
entitled to vote in the election of directors; or
(iii) consummation of any merger or consolidation with
respect to which Titan or any Parent is a constituent
corporation (other than a transaction for the purpose
of changing Titan's corporate domicile) any
liquidation or dissolution of Titan or any sale of
substantially all of the assets of Titan to another
corporation;
(a) In the event of a change of control (as defined above) at the
Executive's election made during the sixty (60) days period thereafter, may
terminate this Agreement and his employment hereunder by giving thirty (30) days
notice to Titan. In the event of the Executive's termination of this Agreement
under 6.3(a), Titan and/or successor shall pay the Executive 100% of his Base
Salary or Adjusted Base Salary for the remaining Employment term;
(b) If the Executive terminates this Agreement because of a change
of control of the Company, Titan agrees to provide fully vested supplemental
retirement benefits ("Supplemental Retirement Benefit Payments") to Executive
pursuant to the following terms: (i) commencing on the first day of the calendar
month which next succeeds or coincides with Executive's having attained 60 and
on the first of each calendar month thereafter for and during his natural life,
Titan shall pay to Executive the sum of $6,000.00 per month (the "Normal
Supplemental Retirement Benefit Payments"); (ii) alternatively, and in lieu of
the Normal Supplemental Retirement Benefits Payments, Executive, at any time
after attaining the age of 55, shall be entitled, at his election, to receive an
early supplemental retirement benefit, payable monthly, commencing on the first
day of the month following such election and on the first day of each month
thereafter during his lifetime, equal to the actuarial equivalent of the Normal
Supplemental Retirement Benefit Payments as determined at the time of such
election (the "Early Supplemental Retirement Benefits Payment"); (iii) if
Executive is married on the date of his benefit payment commence hereunder, he
may elect by notice to Titan and as an alternative to either the Normal
Supplemental Retirement Benefit Payments or Early Supplemental Retirement
Benefit Payments, a reduced pension benefit at age 60 or at such earlier date
after obtaining the age of 55 in the form of a standard joint and survivor
annuity based on the life expectancies of Executive and his spouse to be paid to
Executive and his spouse during their natural lifetimes; and (iv) at the
Executive's election, the Supplemental Retirement Benefits Payments, as elected
by Executive pursuant to (i) through (iii) above, may be made at any time in the
form of a single life annuity of which Executive is the annuitant and owner;
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(c) If the Executive terminates this Agreement because of a change
of control of Titan, Titan agrees to provide for and during their natural
lifetimes of the Executive and his spouse and dependents which live in the
household shall receive, at not cost and expense to them, fully vested group
medical (including hospitalization, surgical, and major medical) and dental
insurance benefits provided or furnished or made available under Titan's Plan
(at Executive, or in the event of Executive death, at Executive's spouse's
election with respect to which plan) then prevailing Executive benefit plans to
the then employed highest level executive officers' of either of them from time
to time. Titan shall pay the full premiums for all such benefits furnished
through group insurance plans as well as all other charges and expenses for
providing such benefits;
(d) In the event of a change of control of Titan, all outstanding
stock options and the Employer match under Titan's 401k Plan for the Executive
shall vest 100% immediately; and
(e) In the event of a change of control of Titan, Titan shall
provide, as a condition of such sale, that the acquiring party shall assume this
Agreement and become obligated to perform all of the terms and conditions
hereof.
7. Successors and Assigns This Agreement shall be binding upon
any successor or assigns of Titan and a successor or assigns shall be any
surviving entity under which it might be merged or consolidated or the purchaser
of substantially all of the assets of Titan.
8. Termination. This Agreement shall terminate upon the death of
both Executive and his spouse or earlier if mutually agreed upon by the
Executive and Titan.
9. Expenses. Titan will pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of his duties hereunder,
including, without limitation expenses for entertainment, travel (including
automobile operating expenses), meals, hotel accomodations and other ordinary
and necessary activities incurred on behalf of Titan, subject to reasonable
documentation of such expenses by Executive.
10. Inventions and Improvements. Any invention or development of
any kind related to the Titan's business made or conceived by Executive (solely,
jointly or in conjunction with anyone else) while he is employed by Titan
pursuant to this Agreement shall be promptly disclosed by Executive to Titan and
shall be the sole property of Titan. Executive shall execute an assignment to
Titan, or to another designated by it, of his entire claim to and interest in
each such invention or development. Executive undertakes to sign all lawful
papers and, at Titan's expense, to assist it in every lawful way to obtain and
sustain patents or copyrights for its benefit in any such inventions or
developments when requested by the Titan. Executive shall not be entitled to
compensation beyond his Base Salary or Adjusted Base Salary for the performance
of any such acts.
11. Confidential Information. Executive acknowledges that by
reason of his employment with Titan he has and will hereafter, from time to time
during his Employment Term, and, if applicable, during the Extended Employment
Term, become exposed to and/or
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become knowledgeable about proposals, plans, inventions, practices, systems,
programs, formulas, customer lists, and other forms of business information
which are not known to Titan's competitors and which are not recognized as being
encompassed within standard business management practices and which are kept
secret and confidential by Executive (the "Confidential Information"). Executive
therefore agrees that at no time during or after the period of his employment by
Titan will he disclose or use the Confidential Information except as may be
required in the prudent course of business for the benefit of Titan, provided,
that no payment required to be made by Titan under the terms of this Agreement
including the Exhibits hereto after termination of the employment of Executive
shall be subject to any right of set-off, counterclaim, defense, abatement,
suspension, deferment or reduction by reason of any claim against Executive
based upon breach of the covenant in this Section 12 other than execution of an
unsatisfied final judgment rendered by a court of competent jurisdiction.
12. Competition. Executive hereby agrees that until the
termination of his employment under this Agreement, and for a period of one (1)
years thereafter, he will not, unless authorized in writing to do so by Titan,
directly or indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or otherwise
connected in any substantial manner with any business which directly competes to
a material extent with line of business of Titan or its subsidiaries that is
material to the businesses, financial condition or prospects of Titan and its
subsidiaries considered as a whole; provided that nothing in this paragraph
shall prohibit Executive from acquiring up to 5% of any class of outstanding
equity securities of any corporation whose equity securities are regularly
traded on a national securities exchange or in the "over-the-counter market".
13. Relocation. Executive shall not be required to relocate his
residence during the Employment Term or, if applicable, during the Extended
Employment Term, without his consent. If the Board of Directors approves or
requires relocation of its executive from Hannibal, Missouri and if such
relocation reasonably would require Executive to move and thereby sell his
present residence and purchase a different one and if Executive consents to
relocate his residence to such new location, then Titan shall pay all reasonably
requested moving and relocation expenses including but not limited to real
estate commissions, legal fees and costs, appraisals, title insurance, surveys
and inspections directly related to such sale and closing and financing costs
directly related to the purchase or construction of a new residence. In
addition, Titan will indemnify Executive for any net loss (measured by the
difference between (a) the average of two current appraisals by recognized
appraisers mutually agreed upon by the parties, and (b) the actual selling price
of the residence) arising from the sale of his residence (caused by such
required relocation): provided, however, that Titan shall alternatively have a
right of first refusal to acquire the residence at the average appraisal price
giving rise to such loss. Notwithstanding the foregoing, Executive shall have
the right to relocate his residence and perform his services hereunder at a
location other than Titan's Quincy, Illinois facility or the successor location
thereto, so long as such relocation and performance of services does not prevent
the fulfillment of his duties and obligations hereunder.
14. Arbitration. Any controversy or claim arising out of or
relating to this
7
<PAGE> 8
Agreement, or any breach thereof, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association and judgment upon such
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. The arbitration shall be held in Illinois unless another
location shall be mutually agreed to by the parties at the time of the
arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against him, Titan shall pay all legal fees
incurred by Executive in connection with the dispute over such claim(s). If more
than one is involved in any dispute and if Executive is sustained as to one or
more of such claims but not as to all of such claims, there shall be a
reasonable allocation of applicable legal expenses. Titan will reimburse
Executive for those legal expenses determined by the arbitrator(s) or by the
consent of the parties to be allocable to the claim or claims as to which
Executive is upheld.
15. Binding Effect: Amendments. Executive's undertakings hereunder
will be binding regardless of (i) the duration of his employment with Titan; or
(ii) the reasons for or manner of termination of his employment. This Agreement
will bind and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, will supersede any prior understanding
between the parties relating to the same subject matter and may be modified and
varied only in writing signed by the parties hereto.
16. Notices. All notices hereunder shall be given in writing by
personal delivery or by registered mail or facimile addressed to Titan at is
principal place of business and to Executive at his residence address as then
listed in Titan's records.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois and jurisdiction
of the State of Illinois.
18. Miscellaneous. (a) the failure of a party to insist on any
occasion upon strict adherence to any term of this Agreement shall not be
considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing signed by the party waiving any right; (b) the
underlined captions in this Agreement at the beginning of Sections are for
reference only and shall not be deemed to define or limit the provisions hereof
or to affect their construction and application; (c) the parties agree that this
Agreement may be executed in any number of counterparts, and in the event, each
counterpart shall be deemed a complete original and be enforceable without
reference to any other counterpart.
19. Survival. Termination of the Executive's employment whether
voluntary or involuntary, whether with or without cause, shall not relieve Titan
and/or its successor (s) from their obligations hereunder. All of Sections 5 and
6 and shall survive the termination of this Agreement and shall not relieve the
Company and/or successor from their obligations.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TITAN INTERNATIONAL, INC
By: /s/ Maurice M. Taylor, Jr.
---------------------------------
Maurice M. Taylor, Jr., President
/s/ Kent W. Hackamack
---------------------------------
Kent W. Hackamack
9
<PAGE> 1
EXHIBIT 10(iii)(A)(4)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 30, 2000, between Titan
International, Inc., a Illinois corporation ("Titan "and/or "the Company") and
its successor(s), and Cheri T. Holley ("Executive") (hereinafter, as amended or
modified and in effect called "Agreement"). The effective date of this Agreement
(the "Effective Date") shall be January 30, 2000.
INTENDING TO BE LEGALLY BOUND HEREBY, THE PARTIES AGREE AS FOLLOWS:
1. Position. Titan agrees to employ Executive and Executive
agrees to accept employment as Vice President, Secretary and General Counsel
pursuant to the terms of this Agreement. Executive will perform such services in
the capacity of Vice President, Secretary and General Counsel as may be assigned
to him by the By-laws and, from time to time by the Board of Directors of Titan
during the Employment Term and, if applicable, during the Extended Employment
Term, (as such terms are defined in Section 2). Executive will devote such of
her business skill, time and effort to her employment hereunder as shall be
reasonably necessary to discharge her obligations hereunder.
2. Employment Term. Executive's term of employment by Titan
under this Agreement will begin on the Effective Date and will terminate on the
date five years after the Effective Date (the "Employment Term"), unless
terminated earlier as provided in Sections 5 and 6 hereof.
Subject to the provisions of Sections 5 and 6 of this
Agreement, this Agreement shall automatically and without requirement for action
by either party be extended for an additional one year period, and similarly
shall be automatically extended by successive one-year periods from year to year
thereafter (collectively, such one-year renewal periods are hereinafter referred
to as the "Extended Employment Term"), unless notice of nonrenewal is given in
accordance with the provisions of the following three sentences. If either party
desires not to continue the employment of Executive under this Agreement beyond
the Employment Term, or, if applicable, beyond the Extended Employment Term (the
last day of the Employment Term, or the last day of the Extended Employment
Term, if applicable, is hereinafter referred to as the "Termination Date"), that
party shall at least twelve (12) months but not more than sixteen (16) months
prior to the Termination Date give written notice to such effect to the other
party. Unless the notice of nonrenewal is thereafter revoked prior to the
Termination Date by the party giving notice, and the party receiving notice of
such nonrenewal consents in writing to the revocation thereof, the employment of
Executive under this Agreement shall terminate effective on the Termination
Date. Any notice of nonrenewal, revocation of nonrenewal or consent to
revocation of nonrenewal given by Titan shall be authorized by President.
3. Direct Compensation. For her service hereunder during the
Employment Term and, if applicable, during the Extended Employment Term,
Executive will receive a base salary payable at an annual rate of $ 150,000.00
(the "Base Salary"), to be paid in accordance with the normal practices for
remunerating Titan executive management. Nothing in this Agreement will be
deemed to prohibit an increase at any time in the Base Salary if Titan's Board
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<PAGE> 2
of Directors approves. (The Base Salary, if so adjusted, is herein called the
"Adjusted Base Salary"). In addition to salary, each calendar year, the
Executive shall be entitled to receive a minimum bonus of twenty five percent
(25%) up to a maximum of seventy five percent (75%) of her salary based on
performance with specified criteria. The Board of Directors will establish the
bonus and performance standards at the beginning of each year. The Executive
shall receive stock options of up to a minimum of fifty percent (50%) of her
base salary in shares of the Company stock under the Company Stock Incentive
Plan that shall vest and become exercisable as prescribed by the Plan. The
Executive during the Employment term shall be entitled to three weeks of
vacation plus Titan designated holidays in each year and shall, during such
periods, be entitled to remuneration as hereinbefore provided and car allowance.
4. Standard Executive Benefits. In addition to the benefits
described in Sections 4, 5 and 6, the Executive and, as applicable, Executive's
family, shall be entitled to participate during the Employment Term, and if
applicable, during the Extended Employment Term in all of Titan's then
prevailing Executive benefit plans and programs which are generally available to
Titan executive management, including without limitation, any group life,
hospitalization, surgical, major medical and accidental death and dismemberment
insurance plans and/or benefits, dental, 401k and any pension or other capital
accumulation plans (collectively, the "Standard Executive Benefits").
5. Death or Disability. In the event of the Executive's death or
disability (as hereinafter defined) during the Employment Term, or, if
applicable, during the Extended Employment Term, Titan shall pay Executive, her
designated beneficiary or estate, in addition to all payments due under Section
4, 5 and 6, the Supplemental Death or Disability Benefits, as the case may be,
as described below.
5.1 Supplemental Death Benefit. In the event of Executive's
death during the Employment Term, or if applicable, during the Extended
Employment Term, Titan shall pay Executive's estate a lump sum equal to all
earned yet unpaid Base Salary or Adjusted Base Salary, if any, in effect as at
such date of death plus the full amount of such Base Salary or Adjusted Base
Salary for a period ending six (6) months following the month during which the
date of such death occurred (even if such six month period extends beyond the
Termination Date), and thereafter during the remainder of the Employment Term,
or, if applicable, the Extended Employment Term, fifty percent (50%) of
Executive's Base Salary. In addition, Titan shall continue to provide
Executive's family with the Standard Executive Benefits from the date of
Executive's death until the later of (1) the expiration of the Employment Term
or, if applicable, the Extended Employment Term or (2) six months.
5.2 Supplemental Disability Benefits. In the event of
Disability of Executive (as hereinafter defined), the majority of Titan's Board
of Directors as then constituted, at its election and upon 30 days written
notice to Executive, may terminate the employment of Executive under this
Agreement effective as of the last day of the month within which the end of such
30-day period occurs (the "Disability Termination Date"). For purposes of this
Agreement the term "Disability" shall mean the inability of Executive to engage
in her regular occupation as a senior executive officer of a corporation
generally comparable to Titan at a level of compensation commensurate with her
education, training and experience for a substantially
2
<PAGE> 3
continue period which has extended or will foreseeable extend beyond six months
in duration as a result of sickness, bodily injury, or mental or emotional
disease or disorder of any type, excluding attempted suicide or intentionally
self-inflicted injury. Upon termination of the employment of Executive by reason
of Disability, the liabilities of Titan will be as follows:
(a) During the periods referred to in (i) and (ii) below,
Titan shall continue to provide the Executive with the following direct
compensation: (i) commencing with the first day of the month next succeeding the
Disability Termination Date, a lump sum equal to all earned yet unpaid Base
Salary or Adjusted Base Salary, if any, in effect as of such Disability
Termination Date plus a monthly amount which shall be equal to one-twelfth of
Executive's Base Salary or Adjusted Base Salary, in effect as at such Disability
Termination Date, for a period of 24 months following such Disability
Termination Date (the "Disability Benefit Continuation Period"); and (ii) for
the period, if any, of Disability that extends beyond the Disability Benefit
Continuation Period referred to in (i) above, and until the date the Executive
attains age 60 or, if sooner, her death, a monthly amount which shall be equal
to one-twelfth of fifty percent (50%) of Executive's Base Salary; provided,
however, that the monthly amounts payable under (i) and (ii) above shall be
reduced by an amount equal to the sum of the amount of monthly benefits then
actually received by Executive pursuant to (A) any long-term disability
insurance plan then generally provided to executive management by Titan, and (B)
any supplemental disability insurance program then provided to Executive by
Titan.
(b) During the Disability Benefit Continuation Period,
Titan shall continue to provide Executive with full participation in the
benefits described in Sections 4, 5.1. and 5.2.
If there should be any dispute between the parties as to
Executive's incapacity or physical or mental disability at any time, such
dispute shall be determined by the written opinion of an impartial reputable
physician agreed upon for their purpose by the parties or their representatives
or, failing agreement by the parties within twenty (20) business days of the
request by either party to the other, by a panel of three impartial reputable
physicians to be selected within twenty (20) business day of request by either
party to the other, one by Executive and one by Titan, respectively, and one by
the two physicians so selected. If the physician selected by Titan and Executive
should fail to select the third physician within ten (10) business days of their
appointment, or if either Titan or Executive should fail to select a physician,
the remaining member(s) of the panel shall be appointed by Director of Mayo
Clinic of Rochester, MN. The opinion of the majority of the panel as to the
matter in dispute shall be final and binding on the parties. Executive shall
submit to such examination(s) as may be necessary for the purposes herein.
6. Termination. Executive's employment under this Agreement may
be terminated by Titan upon the occurrence of any of the following events:
6.1 Termination for Cause. Titan's Board of Directors as
then constituted may by a majority vote at any time terminate Executive's
employment for cause. For their purpose, "Termination for Cause" shall mean (i)
termination of the Executive's employment for willful or gross neglect of duties
hereunder, or willful or gross misconduct in the
3
<PAGE> 4
performance of such duties, so as to cause material harm to Titan and its
subsidiaries considered as a whole, determined in good faith by its Board of
Directors, (ii) termination following a judicial determination that Executive
has committed fraud, misappropriation or embezzlement against Titan or (iii)
termination due to Executive's having committed any felony for which he is
convicted and which, as determined in good faith by the Board of Directors and
results in material harm to Titan and its subsidiaries considered as a whole.
Upon the occurrence of a Termination for Cause, Titan's obligations under this
Agreement shall terminate, except that in the event of Termination for Cause
pursuant to clause (i) of the first sentence of their Section 6.1, Titan shall
remain obligated to pay Executive fifty percent (50%) of her Base Salary and to
continue for Executive and/or her family the full benefits described in Section
4 during the Employment Term.
6.2 Termination Without Cause. Titan's Board of Directors,
as then constituted may, at any time terminate Executive's employment by
majority vote and thereupon, unless such termination shall be pursuant to
Section 5 or 6.1, such termination shall, in all cases, constitute "Termination
Without Cause" with effect from the date of action by Titan's Board of
Directors. Any demotion from the position of Vice President, Secretary and
General Counsel set forth in Section 1, or any material reduction in the
authorities inherent to such position, in each instance unless made with
Executive's prior written consent, or upon a termination pursuant to Sections 5
or 6.1, or any non-payment or reduction in the Base Salary or Adjusted Base
Salary then in effect or any other breach by Titan of this Agreement shall be
deemed to constitute Termination Without Cause. In the event of Executive's
Termination Without Cause, Titan shall remain obligated to pay Executive 100% of
her Base Salary or Adjusted Base Salary then in effect for three (3) years from
the effective date of the Termination Without Cause, but in no event beyond the
Employment Term or, if applicable, the Extended Employment Term, and 50% of her
Base Salary or Adjusted Base Salary then in effect for the balance of the
Employment Term remaining beyond the three year period, if any, plus all
benefits described in Sections 4, 5 and 6 during the Employment Term.
6.3 Termination by Executive The executive shall have
sufficient reason to terminate this Agreement if: (i) there is a change of
control of the company (as defined below); (ii) there is a failure by the
company to comply with any material provision of this Agreement and such failure
has continued for a period of ten days after notice of such failure has been
given by the executive to the company; or (iii) there is a purported termination
of the executive's employment which is not effected pursuant to the provisions
of this Agreement relating to termination of the executive's employment by the
company;
For the purposes of this Agreement, a "change of control of the
company" means
(i) any Person (meaning individual, corporation, general
partnership, limited partnership, syndicate or other
group of persons) or two or more Persons acting in
concert shall have acquired after the date hereof
beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934), directly or
indirectly of securities of the Company (or other
securities convertible into such securities)
representing 20% or more of the
4
<PAGE> 5
combined voting power of securities of the company
entitled to vote in the election of directors; or
(ii) any Person or two or more Persons acting in concert
shall have acquired after the date hereof by contract
or otherwise, or shall have entered into a contract
or otherwise, or shall have entered into a contract
or arrangement that, upon consummation, will result
in its or their acquisition of control over
securities of the company (or other securities
convertible into such securities) representing 20% or
more of the combined voting power of all securities
of the company entitled to vote in the election of
directors; or
(iii) consummation of any merger or consolidation with
respect to which the Company or any Parent is a
constituent corporation (other than a transaction for
the purpose of changing the Company's corporate
domicile) any liquidation or dissolution of the
Company or any sale of substantially all of the
assets of Company to another corporation;
(a) In the event of a change of control (as defined above) at the
Executive's election made during the sixty (60) days period thereafter, may
terminate this Agreement and his employment hereunder by giving thirty (30) days
notice to the Company. In the event of the Executive's termination of this
Agreement under 6.3(a), the Company and/or successor shall pay the Executive
100% of her Base Salary or Adjusted Base Salary for the remaining Employment
term;
(b) If the Executive terminates this Agreement because of a change
of control of the company, Titan agrees to provide fully vested supplemental
retirement benefits ("Supplemental Retirement Benefit Payments") to Executive
pursuant to the following terms: (i) commencing on the first day of the calendar
month which next succeeds or coincides with Executive's having attained 60 and
on the first of each calendar month thereafter for and during her natural life,
Titan and/or successor shall pay to Executive the sum of $6,000.00 per month
(the "Normal Supplemental Retirement Benefit Payments"); (ii) alternatively, and
in lieu of the Normal Supplemental Retirement Benefits Payments, Executive, at
any time after attaining the age of 55, shall be entitled, at her election, to
receive an early supplemental retirement benefit, payable monthly, commencing on
the first day of the month following such election and on the first day of each
month thereafter during her lifetime, equal to the actuarial equivalent of the
Normal Supplemental Retirement Benefit Payments as determined at the time of
such election (the "Early Supplemental Retirement Benefits Payment"); (iii) if
Executive is married on the date of her benefit payment commence hereunder, he
may elect by notice to Titan and as an alternative to either the Normal
Supplemental Retirement Benefit Payments or Early Supplemental Retirement
Benefit Payments, a reduced pension benefit at age 60 or at such earlier date
after obtaining the age of 55 in the form of a standard joint and survivor
annuity based on the life expectancies of Executive and her spouse to be paid to
Executive and her spouse during their natural lifetimes; and (iv) at Executive's
election, the Supplemental Retirement Benefits Payments, as elected by Executive
pursuant to (i) through (iii) above, may be made at any time in the form of a
single life annuity of which Executive is the annuitant and owner;
(c) If the Executive terminates this Agreement because of a change
of control of the company, Titan agrees to provide for and during their natural
lifetimes of the Executive and her
5
<PAGE> 6
spouse and dependents which live in the household shall receive, at not cost and
expense to them, fully vested group medical (including hospitalization,
surgical, and major medical) and dental insurance benefits provided or furnished
or made available under Titan's Plan (at Executive, or in the event of Executive
death, at Executive's spouse's election with respect to which plan) then
prevailing Executive benefit plans to the then employed highest level executive
officers' of either of them from time to time. Titan shall pay the full premiums
for all such benefits furnished through group insurance plans as well as all
other charges and expenses for providing such benefits;
(d) In the event of a change of control of the Company, all
outstanding stock options and the Employer match under Titan's 401k Plan for the
Executive shall vest 100% immediately; and
(e) In the event of a change of control of the Company, Titan
shall provide, as a condition of such sale, that the acquiring Person shall
assume their Agreement and become obligated to perform all of the terms and
conditions hereof.
7. Successors and Assigns This Agreement shall be binding upon
any successor or assigns of Titan and a successor or assigns shall be any
surviving corporation under which it might be merged or consolidated or the
purchaser of substantially all of the assets of Titan.
8. Termination. This Agreement shall terminate upon the death of
both Executive and her spouse or earlier if mutually agreed upon by the
Executive and Titan.
9. Expenses. Titan will pay or reimburse Executive for any
expenses reasonably incurred by him in furtherance of her duties hereunder,
including, without limitation expenses for entertainment, travel (including
automobile operating expenses), meals, hotel accommodations and other ordinary
and necessary activities incurred on behalf of the company, subject to
reasonable documentation of such expenses by Executive.
10. Inventions and Improvements. Any invention or development of
any kind related to Titan's business made or conceived by Executive (solely,
jointly or in conjunction with anyone else) while he is employed by Titan
pursuant to their Agreement shall be promptly disclosed by Executive to Titan
and shall be the sole property of Titan. Executive shall execute an assignment
to Titan, or to another designated by it, of her entire claim to and interest in
each such invention or development. Executive undertakes to sign all lawful
papers and, at Titan's expense, to assist it in every lawful way to obtain and
sustain patents or copyrights for its benefit in any such inventions or
developments when requested by Titan. Executive shall not be entitled to
compensation beyond her Base Salary or Adjusted Base Salary for the performance
of any such acts.
11. Confidential Information. Executive acknowledges that by
reason of her employment with Titan he has and will hereafter, from time to time
during her Employment Term, and, if applicable, during the Extended Employment
Term, become exposed to and/or become knowledgeable about proposals, plans,
inventions, practices, systems, programs, formulas, customer lists, and other
forms of business information which are not known to Titan's
6
<PAGE> 7
competitors and which are not recognized as being encompassed within standard
business management practices and which are kept secret and confidential by
Executive (the "Confidential Information"). Executive therefore agrees that at
no time during or after the period of her employment by Titan will she disclose
or use the Confidential Information except as may be required in the prudent
course of business for the benefit of Titan, provided, that no payment required
to be made by Titan under the terms of this Agreement including the Exhibits
hereto after termination of the employment of Executive shall be subject to any
right of set-off, counterclaim, defense, abatement, suspension, deferment or
reduction by reason of any claim against Executive based upon breach of the
covenant in their Section 12 other than execution of an unsatisfied final
judgment rendered by a court of competent jurisdiction.
12. Competition. Executive hereby agrees that until the
termination of her employment under this Agreement, and for a period of one (1)
years thereafter, she will not, unless authorized in writing to do so by Titan,
directly or indirectly own, manage, operate, join, control or participate in the
ownership, management, operation or control of, or be employed or otherwise
connected in any substantial manner with any business which directly competes to
a material extent with line of business of Titan or its subsidiaries that is
material to the businesses, financial condition or prospects of Titan and its
subsidiaries considered as a whole; provided that nothing in their paragraph
shall prohibit Executive from acquiring up to 5% of any class of outstanding
equity securities of any corporation whose equity securities are regularly
traded on a national securities exchange or in the "over-the-counter market".
13. Relocation. Executive shall not be required to relocate her
residence during the Employment Term or, if applicable, during the Extended
Employment Term, without her consent. If the Board of Directors of Titan
approves or requires relocation of its executive from Quincy, Illinois and if
such relocation reasonably would require Executive to move and thereby sell her
present residence and purchase a different one and if Executive consents to
relocate her residence to such new location, then Titan shall pay all reasonably
requested moving and relocation expenses including but not limited to real
estate commissions, legal fees and costs, appraisals, title insurance, surveys
and inspections directly related to such sale and closing and financing costs
directly related to the purchase or construction of a new residence. In
addition, Titan will indemnify Executive for any net loss (measured by the
difference between (a) the average of two current appraisals by recognized
appraisers mutually agreed upon by the parties, and (b) the actual selling price
of the residence) arising from the sale of her residence (caused by such
required relocation): provided, however, that Titan shall alternatively have a
right of first refusal to acquire the residence at the average appraisal price
giving rise to such loss. Notwithstanding the foregoing, Executive shall have
the right to relocate her residence and perform her services hereunder at a
location other than Titan's Quincy, Illinois facility or the successor location
thereto, so long as such relocation and performance of services does not prevent
the fulfillment of her duties and obligations hereunder.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or any breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration Association
and judgment upon such award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. The arbitration shall be held in Michigan
unless another location shall be mutually agreed to by the parties at the time
of
7
<PAGE> 8
the arbitration. In any dispute between the parties as to which Executive is
sustained on the claim(s) by or against her, Titan shall pay all legal fees
incurred by Executive in connection with the dispute over such claim(s). If more
than one is involved in any dispute and if Executive is sustained as to one or
more of such claims but not as to all of such claims, there shall be a
reasonable allocation of applicable legal expenses. Titan will reimburse
Executive for those legal expenses determined by the arbitrator(s) or by the
consent of the parties to be allocable to the claim or claims as to which
Executive is upheld.
15. Binding Effect: Amendments. Executive's undertakings hereunder
will be binding regardless of (i) the duration of her employment with Titan; or
(ii) the reasons for or manner of termination of her employment. This Agreement
will bind and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, will supersede any prior understanding
between the parties relating to the same subject matter and may be modified and
varied only in writing signed by the parties hereto.
16. Notices. All notices hereunder shall be given in writing by
personal delivery or facsimile or by registered mail addressed to Titan at is
principal place of business and to Executive at her residence address as then
listed in Titan's records.
17. Governing Law. The Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan and jurisdiction
of the State of Michigan.
18. Miscellaneous. (a) the failure of a party to insist on any
occasion upon strict adherence to any term of this Agreement shall not be
considered to be a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
Any waiver must be in writing signed by the party waiving any right; (b) the
underlined captions in this Agreement at the beginning of Sections are for
reference only and shall not be deemed to define or limit the provisions hereof
or to affect their construction and application; (c) the parties agree that this
Agreement may be executed in any number of counterparts, and in the event, each
counterpart shall be deemed a complete original and be enforceable without
reference to any other counterpart.
19. Survival. Termination of the Executive's employment whether
voluntary or involuntary, whether with or without cause, shall not relieve the
Company and/or its successor (s) from their obligations hereunder. All of
Sections 5 and 6 shall survive the termination of this Agreement and shall not
relieve the Company and/or successor from their obligations.
8
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TITAN INTERNATION INC.
By: /s/ Maurice M. Taylor, Jr.
------------------------------------------
Maurice M. Taylor, Jr., President
/s/ Cheri T. Holley
------------------------------------------
Cheri T. Holley
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM
10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 6,875
<SECURITIES> 0
<RECEIVABLES> 136,311
<ALLOWANCES> 5,778
<INVENTORY> 144,284
<CURRENT-ASSETS> 320,979
<PP&E> 428,550
<DEPRECIATION> 164,262
<TOTAL-ASSETS> 677,090
<CURRENT-LIABILITIES> 102,165
<BONDS> 303,305
0
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<CGS> 143,431
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,062
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
