SEVERANCE AGREEMENT
THIS AGREEMENT made and entered into as of the 12th day of December, 1997
by and between SWISS ARMY BRANDS, INC., a Delaware corporation, (hereinafter
referred to as "SABI" or "the Company"), and XXXXXX X. XXXXX (hereinafter
referred to as "Xx. Xxxxx").
WHEREAS, Xx. Xxxxx has been Vice President of SABI since December, 1995;
WHEREAS, Xx. Xxxxx has resigned from the office of Vice President of the
Company and as an employee of the Company effective December 12, 1997;
WHEREAS, the Company desires to provide Xx. Xxxxx with certain severance
benefits; and
WHEREAS, Xx. Xxxxx desires to accept such benefits under the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. SEVERANCE BENEFITS. The Company agrees to provide Xx. Xxxxx with the
following severance benefits, which benefits Xx. Xxxxx acknowledges are over and
above those to which she would normally be entitled:
(a) Xx. Xxxxx or, in the event of her death, her estate shall be paid, as a
severance payment, at the rate of $185,500 per annum, payable on a bi-weekly
basis through December 31, 1997 and shall receive a lump sum payment in the
amount of $278,250 on the later to occur of January 9, 1998 or the expiration of
the waiting periods set forth in section 14 hereof. All payments under this
Agreement shall be subject to applicable withholding.
(b) The Company shall pay to the Company's insurance carrier, the amount of
the premium required to be paid to keep the medical and dental insurance for the
benefit of Xx. Xxxxx and her dependents (to the extent her dependents were so
covered immediately prior to the date hereof) under COBRA effective for the
period terminating on June 30, 1999.
(c) The Company shall pay to Xx. Xxxxx on a monthly basis an automobile
allowance of $600 per month through December 31, 1997 and a lump sum payment in
the amount of $10,800 of the later to occur on January 9, 1998 or the expiration
of the waiting period set forth in section 14 hereof. While payments under this
Agreement shall be subject to applicable withholding.
(d) The Company shall pay for outplacement services, including phone,
office and secretarial services, provided by Xxx Xxxxx Xxxxxxxx for Xx. Xxxxx
for a period of up to one year. The Company shall have no obligation to pay, and
Xx. Xxxxx shall have no right to receive, cash or other payment in lieu of such
service nor shall Xx. Xxxxx be entitled to an office or phone services at the
Company's offices.
(e) The Company shall reimburse Xx. Xxxxx in the amount of up to $3,000 for
the purchase of a computer and related equipment upon receipt of appropriate
documentation evidencing such expenditures.
(f) Pursuant to Stock Option Agreements (the "Option Agreements") dated May
18, 1992, July 15, 1994, January 26, 1995 and November 14, 1996, the Company
granted to Xx. Xxxxx options to purchase an aggregate of up to 40,000 shares of
the Company's common stock. The Option Agreements provide that Xx. Xxxxx shall
have a period of six months from the termination of her employment hereunder to
exercise such options that have vested by the termination of her employment.
2. COVENANT NOT TO COMPETE. (a) Xx. Xxxxx acknowledges that in the course
of her employment by the Company, she has been privy to various economic and
trade secrets and relationships of the Company and its affiliates. Therefore, in
consideration of this Agreement, Xx. Xxxxx hereby agrees that she will not,
directly or indirectly, except for the benefit of the Company or its affiliates:
(i) on behalf of herself or any other person:
(A) solicit, entice, persuade or induce any employee of the Company or any
affiliate, or any other person, who is under contract with or rendering services
or supplying products to the Company or any affiliate, (w) to terminate her or
its employment by, or contractual relationship with, the Company or any
affiliate or (x) to refrain from extending or renewing the same (upon the same
or new terms) or (y) to refrain from rendering services to the Company or any
affiliate, or (z) to become employed by or to enter into contractual relations
with persons other than the Company provided, however, that the prohibition set
forth in this subsection 2(a)(i)(A)(z) shall not apply to solicitations of
persons other than employees of the Company or an affiliate; or
(B) authorize or knowingly approve or assist in the taking of any such
actions by any person other than the Company; provided, however, that nothing
herein shall prohibit Xx. Xxxxx providing employment references.
(ii) directly or indirectly, whether as employee, consultant, officer,
director, partner, shareholder or otherwise engage in the business of marketing,
distributing, offering for sale or selling products manufactured, distributed or
licensed by Xxxxxx X.X. or Precise Imports Corporation or any entity directly or
indirectly controlled, controlling or under common control with either of them
or any successor to the business of either of them.
(b)(i) Xx. Xxxxx acknowledges that she has substantial capabilities and
experience in fields other than those which would be prohibited hereunder and
that the restrictions set forth above would not hinder her ability to earn a
livelihood.
(ii) If any of the restrictions set forth in this Section 2 should, for any
reason whatsoever, be declared invalid by a court of competent jurisdiction, the
validity or enforceability of the remainder of such restrictions shall not
thereby be adversely affected. Xx. Xxxxx agrees that the time limitations and
other restrictions in this Section 2 are reasonable and properly required for
the adequate protection of the business of the Company, and that if any such
time limitations or other restrictions is held unreasonable by a court of
competent jurisdiction, then she agrees and submits to the reduction of said
time limitation or other restrictions to such area or period as such court shall
find reasonable.
(c) The provisions of this Section 2 shall survive termination of this
Agreement and be effective for a period of eighteen months from the date hereof.
3. CONFIDENTIALITY. Xx. Xxxxx will keep secret and will not, without the
express written consent of the Company:
(a) knowingly divulge or communicate to any third person, or use for the
benefit of Xx. Xxxxx or any third person, any trade secrets or privileged,
proprietary or confidential information used or owned by the Company or any
affiliate or disclosed to or learned by her in the course of her employment by
the Company including, without limitation, information concerning products,
profitability, the identity of, and information relating to dealings with
customers and suppliers; or
(b) retain for the benefit of herself or any third person any document or
paper used or owned by the Company or any affiliate or coming into her
possession in the course of her employment by the Company or make or cause to be
made any copy, abstract, or summary thereof.
4. REMEDIES. Because the services of Xx. Xxxxx hereunder are unique and
extraordinary and the Company does not have an adequate remedy at law to protect
its business from Xx. Xxxxx'x competition or to protect its interest in its
trade secrets, confidential information and similar commercial assets, Xx. Xxxxx
agrees that any breach or threatened breach of any provision of provisions of
this Agreement relating to non-competition and confidentiality shall entitle the
Company, in addition to any other legal or equitable remedies available to it,
to apply to any court of competent jurisdiction to enjoin such breach or
threatened breach without the posting of any bond or any security.
5. RELEASE. Xx. Xxxxx, for her and for her successors and assigns, does
hereby fully and completely RELEASE, ACQUIT and FOREVER DISCHARGE SABI, and its
affiliates, subsidiaries or other related entities as well as its shareholders,
officers, directors, employees or agents, from any and all claims, debts,
demands, actions, causes of action, suits, sums of money, contracts, agreements,
judgements and liabilities whatsoever, both in law and in equity ("claims") of
any kind and any character that she might now have, or could have had, whether
in contract, tort or otherwise, including specifically any claims of
discrimination that she may claim in connection with her employment or the
termination thereof but excluding claims for the enforcement of Xx. Xxxxx'x
rights under this Agreement. This includes but is not limited to, claims arising
under the federal, state or local laws prohibiting discrimination on the basis
of one's sex, race, age, disability, national origin, color or religion, or
claims growing out of any legal restrictions on SABI's right to terminate its
employees. This also specifically includes the waiver of any rights or claims
arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et
seq.). It is also understood that the execution of this Agreement shall be
construed as a release and covenant not to xxx, that Xx. Xxxxx will not xxx SABI
or any subsidiary, affiliate, officer, director, employee or committee thereof,
or file any claims of any sort with any administrative agency for anything
arising out of her employment, and the terms of this Agreement supersede any and
all other agreements relating to her employment whether written or oral.
6. CONFIRMATION OF RESIGNATION. Xx. Xxxxx acknowledges and confirms that
effective the date hereof, she resigns from any and all positions held as an
officer and employee of SABI and all of SABI's subsidiaries.
7. ADVICE OF COUNSEL. SABI encourages Xx. Xxxxx to carefully review the
terms of this Agreement and, if she wishes, to seek advise and counsel from an
attorney before signing this Agreement.
8. SPLIT DOLLAR LIFE INSURANCE. Xx. Xxxxx agrees to deliver to the Company
simultaneously with the execution and delivery of this Agreement, a duly and
validly executed Insurance Agreement and Collateral Assignment Agreement of the
Split Dollar Life Insurance Policy paid for by SABI for the benefit of Xx. Xxxxx
in the form attached as Exhibit A hereto.
9. DIVISIBILITY OF AGREEMENT. In the event that any term, condition or
provision of this Agreement is for any reason rendered void, all remaining
terms, conditions and provisions shall remain and continue as valid and
enforceable obligations of the parties hereto.
10. NOTICES. Any notices or other communications required or permitted to
be sent hereunder shall be in writing and shall be duly given if personally
delivered or sent postage pre-paid by certified or registered mail, return
receipt requested, or sent by electronic transmission and confirmed by mail
within two business days of such transmission, as follows:
(a) If to Xx. Xxxxx:
0 Xxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
(b) If to SABI:
Swiss Army Brands, Inc
Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Either party may change her or its address for the sending of notice to
such party by written notice to the other party sent in accordance with the
provisions hereof.
11. MERGER. This Agreement merges and supersedes any and all other
agreements between the parties hereof related in any way to the employment of
Xx. Xxxxx. This Agreement may not be altered or amended except by a writing,
duly executed by the party against whom such alteration or amendment is sought
to be enforced.
12. GOVERNING LAW AND ARBITRATION. (a) This Agreement shall be governed by
and construed in accordance with the laws of the state of Connecticut with
respect to agreements made and to be performed wholly therein.
(b) Any dispute between SABI and Xx. Xxxxx arising out of this Agreement
shall be submitted to arbitration in the City of New York in accordance with the
rules of the American Arbitration Association then obtaining. The decision of
the arbitrator or arbitrators shall be final, conclusive, non-appealable and
binding upon the parties and judgment thereunder may be entered in any court of
competent jurisdiction.
13. ASSIGNMENT. This Agreement is personal and non-assignable by Xx. Xxxxx.
It shall inure to the benefit of any corporation or other entity with which the
Company shall merge or consolidate or to which the Company shall lease or sell
all or substantially all of its assets and may be assigned by the Company to any
affiliate of the Company or to any corporation or entity with which such
affiliate shall merge or consolidate or which shall lease or acquire all or
substantially all of the assets of such affiliate.
14. PERIOD TO REVIEW AND REVOKE. After Xx. Xxxxx has had the chance to
review this Agreement and to consult with her attorney, if she wishes, she
should sign the Agreement and return it to SABI within 22 days.
After Xx. Xxxxx has executed and delivered this Agreement, she shall have
seven (7) days following the date of execution during which time she may revoke
this agreement, provided, however, that, if she elects to return an executed
copy of the document to us before the expiration of 22 days from the date
hereof, she may revoke this Agreement at any time before the later to occur of
seven (7) days following the date of execution or 22 days after the date hereof.
If SABI does not receive a written revocation from Xx. Xxxxx, or her attorney,
prior to the expiration of the period in which she may revoke this Agreement,
this Agreement will become effective on the date after the expiration of the
applicable revocation period.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the day and year first above written.
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
SWISS ARMY BRANDS, INC.
By: /s/ J. Xxxxxxx Xxxxxxx
Title: President
I acknowledge that I have been given the opportunity to consider this
agreement for at least twenty-one (21) days, that I have been advised to discuss
this agreement with an attorney of my choice, that I have carefully read and
fully understand and agree to all of the provisions of this agreement and that I
am voluntarily entering into this agreement.
Finally, I also understand that I have seven (7) days after I sign this
agreement (or twenty-two days after the date hereof, if later) to change my mind
and that I may revoke this agreement by providing written notice of revocation
to you prior to the expiration of the applicable period.
December 12, 1997 /s/ Xxxxxx X. Xxxxx
Date of Execution Xxxxxx X. Xxxxx
