July 20, 2009
Xx. Xxxxxxx X. Xxxxxxx
0 Xxxxx Xxxx Xxx Xxxxx
Xxx Xxxx 00000
Dear Xxx:
This letter will serve to supplement our recent conversations and to set
forth our understanding on the payment of a cash bonus in the event of a sale of
The Plow & Hearth, Inc., The Plow & Hearth I, LLC, and The Children's Group,
Inc., (collectively "Madison Brands") and furthermore to amend the terms of your
Offer Letter dated February 9, 2005 (the "Offer Letter") as provided for herein.
1. In the event that 0-000-Xxxxxxx.Xxx., Inc., (the "Company") sells the
stock of the corporate entities comprising Madison Brands, or sells
all or substantially all of the assets of Xxxxxxx Xxxxxx to a third
party, then one or more of the following scenarios will occur:
a) If Xxxxxxx Xxxxxx is sold and you are offered a position with
Xxxxxxx Xxxxxx by the new ownership, and you accept same, then
you will be entitled to receive from us a one-time cash bonus
payment of $100,000, however, the one year severance provided for
in your Offer Letter will be deemed amended so that "severance"
will be paid by the Company only if you are terminated by your
new employer during the first year of such new employment on
grounds that would qualify you for severance pursuant to the
terms of the Offer Letter. Such severance provided for under the
Offer Letter will be prorated based upon the time remaining on
the first year of your new employment following the date of
termination from same, less any amount received in the way of
severance from the new ownership. For example, if you were to be
so terminated by your new employer after six (6) months then you
would be entitled to receive from us six (6) months severance
equal to six (6) months base salary calculated on your base
salary at the time of such termination, less any severance
received from new ownership. All the other terms related to
severance under the Offer Letter shall apply to the "severance'
payment discussed in this section 1(a);
b) If Madison Brands is sold and you are offered a position with the
Company or one of its subsidiaries, and you accept same, then you
will be entitled to receive a one-time cash bonus payment of
$100,000, and the terms of the Offer Letter as to severance
remain the same, however, (i) your title provided for in the
Offer letter shall be amended to reflect the new position with
the Company or its subsidiary, as the case may be and (ii) you
waive any claim that you were constructively terminated because
of any events occurring prior to the start of your new position
with the Company or one of its subsidiaries, as the case may be;
c) If Xxxxxxx Xxxxxx is sold and you are not offered any position by
the new ownership or by the Company, then you will be entitled to
receive a one-time cash bonus payment of $100,000, and in
addition, you will also be entitled to the one year severance
payment to the extent provided for in the Offer Letter and
provided you otherwise comply with the terms of the Offer Letter;
or
d) Payment of the aforementioned $100,000 shall be made within 30
days after the closing of the sale of Xxxxxxx Xxxxxx.
e) In the event of the Liquidation of Xxxxxxx Xxxxxx, then you will
be entitled to the one year severance payment to the extent
provided for in the Offer Letter and provided you otherwise
comply with the terms of the Offer Letter. However, no bonus will
be due you.
f) Notwithstanding the foregoing, in the specific event that you are
offered a temporary position for up to a maximum of 60 days with
the new ownership to assist with transition of the business to
the new owners ("Transition Position"), then in such an event,
you will remain entitled to the severance provided for in the
Offer letter, without any reduction by the amount of compensation
you earned while working in the Transition Position. However,
should said position continue past the 60 days then any severance
due you from the Company shall be reduced by the amount of
compensation you earned while so working past the initial 60 day
period.
g) In the event that Xxxxxxx Xxxxxx is sold for a total purchase
price over $25,000,000 then the bonus provided for herein shall
be $150,000.
2. In the event that Xxxxxxx is not sold or liquidated, then your time to
terminate your employment at your own initiative and make any claim
under the "Constructive Termination Without Cause" provision of your
Offer Letter due to the reorganization changes at Madison Brands which
resulted in your taking the position of President, Xxxxxxx Xxxxxx, or
for any other reason you believe you may have, shall be extended up to
thirty (30) days from the date that the Company advises you that the
sale process has concluded. By extending this time to make a claim,
the Company is not waiving any of its rights to contest any such
claim. In the event that you do not allege a constructive termination
as provided above then you will have forever waived such a claim.
Furthermore, the terms of the Offer Letter as to severance remain the
same, however, your title in the Offer Letter shall be as provided for
in section 3 below. In addition, the Company will recommend to the
Compensation Committee of the Board of Directors the issuance of an
equity award to you, which shall be consistent with the method used
for the equity award that was granted by the Compensation Committee in
April 2009 for similarly situated employees that received a grant at
that time. The Grant Date on any such award approved by the
Compensation Committee hereunder shall the third business day after
the Company's first releases its quarterly earnings following the
approval of the grant by the Compensation Committee.
3. References in your Offer Letter to "President of Specialty Brands"
shall be deemed changed to read President, Xxxxxxx Xxxxxx.
5. Your rights related to any stock options or restricted stock remains
governed by the terms of the Company's 2003 Long Term Incentive and
Share Award Plan.
6. Except as specifically modified by the terms of this letter, the terms
of your Offer Letter remain in full force and effect.
Please acknowledge your agreement to the terms of this letter by signing
below and returning same to me in the stamped, self-addressed envelope that is
enclosed. This offer, if not so accepted within this period will expire five
business days from the date of this letter.
Sincerely,
0-000-XXXXXXX.XXX
By: /s/Xxxxxxxxxxx X. XxXxxx
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XXXXXXXXXXX X. XxXXXX
President
I hereby agree to, and accept, the terms of this letter:
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
