November 10, 1997
Personal & Confidential
Xx. Xxxxxxx X. Xxxxxxx
Dear Rich:
This letter agreement confirms our mutual understanding
regarding your resignation, effective October 1, 1997 from employment with
Swing-N-Slide Corp. (the "Company").
1. Resignation. (a) Your duties as Chairman, Chief Executive
Officer, and President of the Company shall cease on September 2, 1997.
You shall also resign, as of October 1, 1997, from any other positions to
which you have been appointed by the Company, including positions as an
officer or director of the Company or any affiliated company and as a
member of any committee or administrative body relating to the Company and
its businesses. You will also resign and withdraw as a Manager and/or
member of GreenGrass Management LLC and GreenGrass Holdings LLC. You will
provide the Company with a resignation in the form of the attachment to
this letter, signed and dated October 1, 1997, and such other written
resignations as the Company may request in accordance with this paragraph
(a).
(b) Effective as of October 1, 1997 you shall cease to be an
employee of the Company. No changes will be made between September 2,
1997, and such date in your current base salary, benefit plans, or fringe
benefits as a result of your resignation as an executive officer of the
Company.
(c) The Company and you mutually agree that the principal
reason leading to your resignation from the Company was your desire to
expand the business through acquisitions more rapidly than the Board of
Directors wished and that shall be the sole basis for any response by the
Company to inquiries regarding reasons for your resignation.
2. Stock Compensation Programs. Your stock options for
187,207 shares of Company stock under the Company's 1992 Stock Option Plan
are fully vested and exercisable at $3.70 per share through February 26,
2006. Your stock options for 220,000 shares of Company stock under the
1996 Incentive Stock Plan are fully vested and may be exercised at any
time during the 90 day period following execution of this agreement. To
the extent applicable in connection with your transactions in the
company's securities, you agree to make all necessary filings and execute
all appropriate documents in order to comply with the provisions of
Section 16 of the Securities Exchange Act of 1934, as amended.
The Company acknowledges that to the extent that the terms of
the documents governing the options provide for discretion in relation to
anti-dilution provisions, the discretion is not intended to be applied to
deny an adjustment otherwise appropriate, as opposed to the appropriate
manner of adjustment.
3. Consideration. a. The Company will pay you $52,500 (less
$6,362.22 in expenses due the Company) not later than November 14, 1997.
This amount is payable in the same manner as compensation is provided to
other salaried employees of the Company but shall not count as
compensation for any benefit plan purposes. Not later than January 5,
1998, the Company will pay you an additional $247,916. This also will not
count as compensation for any benefit plan purposes.
(b) The Company will pay you, not later than January 5, 1998,
$24,000 representing your performance bonus earned for the year ending
December 31, 1996. This amount shall not count as compensation for any
benefit plan purposes.
(c) Employee group health benefits covering you and your
dependents, including group life, group long-term disability, individual
long-term disability currently maintained by the Company, and similar
group insurance coverages, if any, shall be maintained by the Company, at
no cost to you, for the 18 month period commencing October 1, 1997. If,
however, such continued participation is precluded by the provisions of
such plans or by law, the Company shall provide you with comparable
benefits of equal value. Execution of this agreement by you shall not be
considered to be a waiver of any rights or entitlements you may have under
applicable law to continuation of coverage under the group health plan
maintained by the Company ("COBRA continuation rights").
(d) Not later than November 14, 1997, the Company will purchase
the 34,385 shares of Company stock held by GreenGrass Management LLC or
GreenGrass Holdings LLC for your benefit at a purchase price of $4.75 per
share. Payment of the purchase price will be made directly to the lender
(Capital Bank, Madison, Wisconsin) to the extent of your outstanding
indebtedness guaranteed by the Company, with the excess, if any, paid to
you. The debentures currently owned on your behalf by those entities will
be distributed to you.
(e) Not later than 10 days after execution of this agreement,
the Company will redeem options with respect to 37,207 shares of Company
stock at a price of $1.05 per optioned share. Not later than January 5,
1998, the Company will redeem options with respect to 50,000 shares of
Company stock at a price of $1.05 per optioned share. The remaining
options that are vested may be redeemed by you in any portion thereafter
at a price determined by multiplying the excess, if any, of the then
applicable fair market value of each optioned share over the option
purchase price per share times the number of shares for which options are
being redeemed. Fair market value is defined for this purpose as the
highest closing price of the three preceding business days without
deduction for brokerage commissions or other expenses.
(f) The Company shall provide you with individual executive
outplacement services, without charge to you, through P.D.I. Outplacement
Services in Minneapolis, Minnesota for one year. These services have been
invoiced for the sum of $25,000. You will also be entitled, during that
one year period, to use of the Company's long distance telephone card, at
no cost, but limited to calls within the U.S. and those primarily related
to job placement. The Company will also pay you up to $2,500 in
relocation expense and up to $4,500 to reimburse for legal fees incurred
in connection with this Agreement. This provision is designated as the
consideration for the releases you are providing in Section 7.
(g) The Company agrees to direct all reference inquiries about
Xx. Xxxxxxx from prospective future employers to Xxxxx Xxxxxx and/or Xxxxx
Xxxxx for superior or board references, and to Xx. Xxxxxxxx, Xx. Xxxxxxxxx
or Xx. Xxxxxxx for inquiries directed to subordinate personnel. Xx.
Xxxxxx and Xx. Xxxxx would agree to provide a positive reference for Xx.
Xxxxxxx.
4. Death. Any amount payable or distributable to you under
this agreement which remains payable following your death shall be paid to
your spouse, if she survives you, otherwise to your estate.
5. Covenant Not to Compete. This covenant is the same
covenant included in your previous Severance, Change of Control and
Noncompetition Agreement, which was duly entered into by you as of May 21,
1997. In that agreement you were provided adequate consideration for this
covenant as part of the terms of your overall employment relationship with
the Company. This covenant is included herein for convenience in having
all relevant terms and conditions of your separation agreement in one
document:
(a) You agree that you will not, during the period of your
employment with the Company and for a period of one year thereafter, as
proprietor, partner, member, shareholder (directly or indirectly owning or
controlling 5% or more of any class of stock), employee, consultant, agent
or otherwise, on your own behalf or on behalf of another person, do any of
the following in competition with the Company, without the prior written
consent of the Company: solicit or assist in the solicitation of
customers of the Company, render or assist in rendering services to
customers of the Company, or divert or attempt to divert any customer's
business from the Company or otherwise interfere with the business
relationship between the Company and any of their respective customers,
employers, or suppliers.
(b) Notwithstanding the foregoing, this agreement shall not in
any event be construed to prevent you from earning a living utilizing your
skills in any businesses which may, as an incident to a business or
activity significantly different from the business of the Company, make or
sell some products or provide some services which may in some degree
compete with the business of the Company. However, nothing in this
section shall be deemed to permit you to accept employment with companies
or divisions thereof which then or thereafter will directly compete in a
major way with the business of the Company with which you were involved or
had access to information about while employed by the Company.
6. Confidential Information. This covenant is the same
covenant included in your previous Severance, Change of Control and
Noncompetition Agreement, which was duly entered into by you as of May 21,
1997. In that agreement you were provided adequate consideration for this
covenant as part of the terms of your overall employment relationship with
the Company. This covenant is included herein for convenience in having
all relevant terms and conditions of your separation agreement in one
document:
(a) You agree that you will not, while you are employed by the
Company or thereafter, disclose to any person to whom you are not
otherwise authorized to do so by the Company (an "Unauthorized Person"),
or use for your own account, any information (the "Confidential
Information"), whether or not reduced to written or other tangible form,
in which the Company has a legally protectible interest by virtue of the
fact that such information is not generally known in the industry; you
have had access to (or, either alone or in cooperation with others,
originated or developed) such information during your employment with the
Company; such information has been treated by the Company as confidential;
such information relates to the business the Company; or such information
is of competitive advantage to the Company or any of its subsidiaries.
(b) Confidential Information for which you have first secured
the written consent of the Company for its disclosure or use, and
Confidential Information which becomes generally known in the industry, or
which otherwise ceases to be legally protectible (other than by your
breach of this covenant), shall cease to be subject to the restrictions
set forth in this covenant. Notwithstanding anything contained herein to
the contrary, this covenant prohibits only the use and disclosure of
Confidential Information and shall not be construed as limiting your right
to undertake any other employment or business activity. You are
prohibited from competing with the Company only as provided in Section 5,
above.
7. Release and Covenants. (a) In consideration of the
payments provided and to be provided by the Company, particularly the
amounts provided to you pursuant to Section 3(f), you, on behalf of
yourself, your spouse, heirs, executors, administrators, agents,
successors, assigns and representatives of any kind (hereinafter
collectively referred to as the "Releasors") confirm that Releasors have
released the Company, and each of its subsidiaries, affiliates, their
employees, successors, assigns, executors, trustees, directors, advisors,
agents and representatives, and all their respective predecessors and
successors (hereinafter collectively referred to as the "Releasees"), from
any and all actions, causes of action, charges, debts, liabilities,
accounts, demands, damages and claims of any kind whatsoever related to
your termination of your status as an employee, officer or director of the
Company or any of its affiliates or termination thereof including, but not
limited to, those arising under any labor, employment discrimination,
(including without limitation, the Age Discrimination in Employment Act of
1967, as amended, Title VII of the Civil rights Act of 1964, as amended,
the Americans with Disabilities Act, the Wisconsin Fair Employment Act, as
amended), contract or tort laws, equity or public policy, or negligence
standard, whether known or unknown, certain or speculative, which against
any of the Releasees, any of the Releasors ever had, now has, or hereafter
shall have or can have. You further covenant that you will not initiate
any action, claim or proceeding against any of the Releasees for any of
the foregoing, nor will you participate, assist, or cooperate in any such
action, claim, or proceeding unless required to do so by law and you
further warrant and covenant that you have no knowledge of facts that
would lead you to believe you have any other claim against Releasees.
(b) Notwithstanding the foregoing, this letter agreement does
not waive rights, if any, you or your successors and assigns may have
under or pursuant to, or release any member of Releasees from obligations,
if any, it may have to you or to your successors and assigns on claims
arising out of, related to or asserted under or pursuant to, this letter
agreement or any indemnity agreements or obligation contained in or
adopted or acquired pursuant to any provision of the charter or bylaws of
the Company or its subsidiaries or affiliates or in any applicable
insurance policy carried by the Company or its affiliates for any matter
which arises or may arise in the future in connection with your employment
with the Company.
(c) You hereby acknowledge that you have at least 21 days to
review this letter agreement from the date you first receive it and you
have been advised to review it with an attorney of your choice. You
further understand that the 21 day review period ends when you sign this
agreement. You also have 7 days after your signing of this agreement to
revoke by so notifying the Company in writing. Any revocation by you
under this subparagraph (c), however, is not effective with regard to
Section 1 hereof and your termination of employment with the company shall
remain in effect as set forth therein. You further acknowledge that you
have carefully read this letter agreement, know and understand the
contents of it and its binding legal effect. You sign the same of your
own free will and act, and it is your intention that you be legally bound
thereby.
(d) You agree to keep this letter agreement confidential and
not to reveal its contents to anyone other than your attorney, financial
consultant, and immediate family members. The provisions of this
subparagraph (d) shall not apply to any truthful statement required to be
made by you in any legal proceeding or government or regulatory
investigation, provided, however, that prior to making such statement you
will give the Company reasonable notice and, to the extent you are legally
entitled to do so, afford the Company the ability to seek a
confidentiality order.
8. Noncompliance. The additional services or compensation
provided to you pursuant to Section 3(f) are conditioned upon your
compliance with all of the terms and conditions of this letter agreement,
particularly Section 7, above. In the event of any violation of such
provision by you or anyone acting at your direction or in the event you or
anyone acting at your direction at any time shall substantially denigrate
any of the Releasees, including without limitation by way of news media or
the expression to news media of personal views, opinions or judgments, the
Company shall be entitled to withhold and terminate such services provided
or to be provided pursuant to Section 3(f), above, and you agree to repay
to the Company the amounts it has expended pursuant to this subparagraph
on your behalf or the Company shall be entitled to recover from you such
amounts, without waiving the right to pursue any other available legal or
equitable remedies.
9. Tax Payments and Reporting. You recognize that the
payments and benefits provided under this letter agreement, including
without limitation those provided pursuant to Section 3, may result in
taxable income to you which the Company and its affiliates will report to
their appropriate taxing authorities. The Company and its affiliates
shall have the right to deduct from any payment made under this letter
agreement to you any national, state, local or other income, employment or
other taxes it determines are required by law to be withheld with respect
to such payments provided hereunder. You also agree to report the
compensation hereunder to the appropriate tax authorities and pay all
required tax amounts.
10. Severability. In the event any one or more of the
provisions of this letter agreement (or any part thereof) shall for any
reason be held to be invalid, illegal or unenforceable, the remaining
provisions of this letter agreement (or part thereof) shall be unimpaired,
and the invalid, illegal or unenforceable provision (or part thereof)
shall be replaced by a provision (or part thereof), which, being valid,
legal and enforceable, comes closest to the intention of the parties
underlying the invalid, illegal or unenforceable provisions. However, in
the event that any such provision of this letter agreement (or part
thereof) is adjudged by a court of competent jurisdiction to be invalid,
illegal or unenforceable, but that the other provisions (or part thereof)
are adjudged to be valid, legal and enforceable if such invalid, illegal
or unenforceable provision (or part thereof) were deleted or modified,
then this letter agreement shall apply with only such deletions or
modifications, or both, as the case may be, as are necessary to permit the
remaining separate provisions (or part thereof) to be valid, legal and
enforceable.
11. Rights in the Event of Dispute. If a claim or dispute
arises concerning the rights of the Employee or his beneficiary (either or
both of whom are hereinafter referred to as the :claimant") under this
Agreement, regardless of the party by whom such claim or dispute is
initiated, the Company shall, upon presentation of appropriate vouchers,
pay all legal expenses, including reasonable attorneys' fees, court costs
and ordinary and necessary out-of-pocket costs of attorneys' billed to and
payable by the claimant in connection with the bringing, prosecuting,
defending, litigating, negotiating, or settling such claim or dispute;
provided, however, that the Company shall not be obligated to pay such
expenses unless and until final resolution of such claim or dispute with
the claimant being entitled to a substantial part of the rights claimed by
him.
12. General Provisions. (a) All notices or other
communications required or permitted hereunder shall be in writing and
shall be deemed given (i) when delivered in person or (ii) when telecopied
(at the date and time indicated on the receipt of transmission if such day
is a business day, and if not, at 9 a.m. on the following business day)
with a hard copy delivered by hand or deposited in the United States mail
postage prepaid, registered or certified mail, on or before two (2)
business days after its delivery by telecopy, or (iii) three (3) business
days after being deposited in the United States mail, postage prepaid,
registered or certified mail, or (iv) two (2) business days after delivery
to a nationally recognized express courier, expenses prepaid, addressed to
the appropriate party as follows: to the Employee at his address on file
with the Company; or to the Company, c/o Swing-N-Slide Corp., 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, telecopier number (608) 755-
4763, Attention: Chairman; and with a copy to Xxxxx & Xxxxxxx, 000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxxxx X.
Xxxxxx III.
(b) Nothing herein shall be construed as an agreement to
continue the employment by the Company of the Employee.
(c) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter contained herein and supersedes
any and all prior understandings, representatives, negotiations, and
agreements with respect thereto (including, without limitation, that
certain Severance Change of Control and Noncompetition Agreement dated May
21, 1997, by and between the Employee and the Company.)
(d) No modification or amendment of any provision of this
Agreement shall be effective unless in a written instrument executed by
both parties. Either party's failure to insist upon strict compliance
with any provision hereof shall not be deemed to be a waiver of such
provision or any other provision hereof.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the affiliates, predecessors, successors and assigns of the
Company. Without limiting the foregoing, the Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the Company, to expressly assume and agree to perform the Company's
obligations under this Agreement in the same manner and to the same extent
that Company is required to perform them if no such succession had taken
place. As used in this Agreement, This Agreement shall inure to the
benefit of, and shall be enforceable by, the Employee's heirs, legal
representative or other successors in interest, but shall not otherwise be
assignable or transferable.
(f) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(g) The validity, interpretation, construction and
enforceability of this Agreement shall be governed by the laws of the
State of Wisconsin, without regard to conflicts of laws principles.
If you find that the foregoing satisfactorily states our mutual
understanding, please sign and date the enclosed copy of this letter
agreement in the spaces indicated below and return it to me.
Very truly yours,
SWING-N-SLIDE CORP.
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Agreed and Accepted this 13th day of November, 1997.
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
ATTACHMENT 1
Xxxxxxx X. Xxxxxxx left the employment of Swing-N-Slide Corp.
October 1, 1997 due to Xx. Xxxxxxx'x desire to expand its business through
acquisitions more rapidly than desired by its Board.
As agreed to by the Company and Xxxxxxx X. Xxxxxxx.
For the Company:
/s/ Xxxxxxx X. Xxxxxxx
Name and Title Xxxxxxx X. Xxxxxx
