Item 1.01. Entry into a Material Definitive Agreement
On May 5, 2023, STRATTEC SECURITY CORPORATION (the "Company") entered into an
employment agreement (the "Employment Agreement") with Dennis Bowe, the
Company's Vice President and Chief Financial Officer, with a September 9, 2022
effective date. The Employment Agreement is on terms substantially consistent
with the terms of the employment agreements entered into by the Company with its
other executive officers and effective date contains an evergreen renewal
feature that automatically extends the agreement for an additional year each
June 30, unless advance notice is provided, such that the term of each
employment agreement automatically extends for one year each June 30 unless
either party gives 30 days' notice that the agreement will not be further
extended. Under the employment agreement, Mr. Bowe agrees to perform the duties
currently being performed as Chief Financial Officer and Vice President of the
Company in addition to such other duties that may be assigned from time to time,
which include oversight of the finance, accounting, payroll/benefits and
information technology functions. The terms of this employment agreement
generally include the following:
• Mr. Bowe is entitled to a base salary under the employment agreement that is
reviewed annually by the Company's Board of Directors or, at its election, the
Company's Compensation Committee;
• Mr. Bowe is entitled to participate in the Company's bonus plans (including our
Team Incentive Plan for STRATTEC SECURITY CORPORATION for participation by
Executive Officers and Senior Managers) and its Amended and Restated Stock
Incentive Plan;
• Mr. Bowe is eligible to participate in any medical, health, dental, disability
and life insurance policy that the Company maintains for the benefit of its
other senior management;
• Mr. Bowe will also receive at the Company's expense group term life insurance
coverage equal to two times his base salary subject to a maximum amount of
coverage equal to $500,000;
• Mr. Bowe has agreed not to compete with the Company during employment and for a
period equal to the shorter of one year following termination of employment or
the duration of his employment with the Company and has agreed to maintain the
confidentiality of the Company's proprietary information and trade secrets; and
• Mr. Bowe is entitled to severance benefits in the event his employment is
terminated as a result of his death or disability or his employment is
terminated by the Company without cause.
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On May 5, 2023, the Company also entered into a change in control employment
agreement (the "Change of Control Agreement") with Mr. Bowe with a September 9,
2022 effective date. The Change of Control Agreement is on terms substantially
consistent with the terms of the other change in control employment agreements
entered into by the Company with its other executive officers. Under the Change
of Control Agreement, the Company guarantees Mr. Bowe continued employment
following a change of control (as defined in the agreement) on a basis
equivalent to his employment immediately prior to such change in terms of
position, duties, compensation and benefits, as well as specified payments upon
termination following a change of control. This Change of Control Agreement
only becomes effective only upon a defined change of control of STRATTEC, or if
Mr. Bowe's employment is terminated upon, or in anticipation of such a change of
control, and automatically supersedes any existing employment agreement once it
becomes effective. Under this Change of Control Agreement, if during the
employment term (three years from the date of the change of control), Mr. Bowe
is terminated other than for cause (as defined in the agreement) or if Mr. Bowe
voluntarily terminates his employment for good reason (as defined in the
agreement) or during a 30day window period one year after a change of control,
then Mr. Bowe is entitled to specified severance benefits, including (1) a lump
sum payment of two times his then annual base salary, (2) a payment equal to his
highest annual bonus (which is equal to the highest cash bonus paid to Mr. Bowe
by STRATTEC and its affiliates collectively during the ten fiscal year period
immediately preceding the fiscal year during which the change of control has
occurred) and (3) continuation of certain fringe and other benefits.
The Employment Agreement and the Change of Control Agreement are each attached
hereto as Exhibits 10.1 and 10.2, respectively, and are each incorporated herein
by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 10.1 - Employment Agreement between STRATTEC SECURITY CORPORATION
and Dennis Bowe entered into on May 5, 2023 and made effective as of September
9, 2022.
Exhibit 10.2 - Change in Control Agreement between STRATTEC SECURITY
CORPORATION and Dennis Bowe entered into on May 5, 2023 and made effective as of
September 9, 2022.
104 - Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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