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EXHIBIT 10.68
XXXXX X. XXXXX
00 Xxxxxxxxxxx Xxxx
Xxxx Xxxxxxxxx, Xxx Xxxx 00000
September 28, 1998
Mr. X. Xxxx Xxxxxxx Mr. X. Xxxx Findlay
President and Chief Executive Officer President and Chief Executive Officer
Conso Products Company Simplicity Holdings, Inc.
000 Xxxxx Xxxxxx Xxxxxx 0 Xxxx Xxxxxx
Xxxxx, XX 00000 Xxx Xxxx, XX 00000
Dear Xxxx,
This letter describes the terms and conditions that you and I have
agreed upon with respect to my continued employment with Simplicity Holdings,
Inc. ("Holdings"). Simplicity Capital Corporation ("Capital") owns all of the
outstanding common stock of Holdings and Simplicity Pattern Co. Inc.
("Simplicity") is a wholly-owned operating subsidiary of Holdings. Holdings,
Capital and Simplicity are collectively referred to herein as the "Simplicity
Group."
Conso Products Company, to be renamed Conso International Company,
("Conso") acquired all of the outstanding common stock of Capital on June 19,
1998 and Capital became a wholly-owned subsidiary of Conso on that date
("Acquisition"). Conso and the Simplicity Group believe it is in their best
interest to continue my employment during the transition period following the
Acquisition until at least December 31, 1998.
Accordingly, Holdings, Conso, and I (referred to as "Xxxxx" herein) have agreed
upon the following terms and conditions:
1. Xxxxx, presently the Senior Vice President, Chief Financial Officer of
the Simplicity Group, will become the Chief Operating Officer of the
Simplicity Group and a Senior Vice President of Conso effective
September 1, 1998.
2. Xxxxx'x base salary and all benefits will remain the same except for
the management bonus program of the Simplicity Group and the
Supplemental Executive Retirement Plan subsequent to August 31, 1998.
Xxxxx will become a participant, at a level appropriate for Xxxxx'x
position, in a new management bonus plan to be implemented
corporate-wide for management employees of Conso and the Simplicity
Group effective as of July 1, 1998 ("Bonus Plan").
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3. Xxxxx will provide 60 days written notice to the Simplicity Group and
Conso if he resigns and the effective date of resignation (including
the Notice Period defined below) is later than December 31, 1998. Conso
and/or the Simplicity Group will provide 60 days written notice to
Xxxxx if they terminate Xxxxx'x employment at any time. The 60 days
written notice that each party must give the other described in this
paragraph is referred to herein as the "Notice Period."
4. Xxxxx will be entitled to receive the following payments if he resigns
and the effective date of his resignation (including the required
Notice Period) is later than December 31, 1998:
a) Retention payment equal to one month of base salary for every
month Xxxxx remains in the employ of the Simplicity Group
(including the Notice Period) subsequent to June 30, 1998 up
to a maximum of 12 months ("Retention Payment"). The Retention
Payment will be made in a lump sum on Xxxxx'x last day of
employment regardless of whether Xxxxx has secured other
employment by that date or any date thereafter.
b) Payment of any unused vacation time remaining on the last day
of employment ("Vacation Payment") up to a maximum of 20 days.
c) Payment of an amount equal to the present value of Xxxxx'x
accrued benefits as of December 31, 1998 under the
Supplemental Executive Retirement Plan ("SERP") of Holdings
("SERP Payment"). Xxxxx will release Holdings from any further
obligations under the SERP upon receipt of the SERP Payment.
d) Payment for a pro-rata portion (based upon the number of full
months Xxxxx is employed by the Simplicity Group during the
fiscal year ended June 30, 1999) of any bonus earned under the
Bonus Plan ("Bonus Payment").
The Vacation Payment and SERP Payment will both be made to Xxxxx on the
last day of his employment. The Bonus Payment will be made at the same
time other participants receive payment for bonus amounts earned under
the Bonus Plan.
If Xxxxx resigns and the effective date of his resignation is on or
before December 31, 1998, then this paragraph shall not apply and Xxxxx
shall not be entitled to any severance benefits under this letter
agreement or otherwise.
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5. Xxxxx will be entitled to receive the following payments if Conso or
the Simplicity Group terminates Xxxxx'x employment without cause at any
time.
a) Severance (5 months pay) in accordance with the Simplicity
Severance Pay Plan described on page 2 of Policy II-8 for
Exempt Employees in the Employee Manual based upon Xxxxx'x
base salary and 15 years of service ("Severance Payments").
b) A Retention Payment equal to 7 months of Xxxxx'x base salary.
The Retention Payment will be made in a lump sum on Xxxxx'x
last day of employment regardless of whether Xxxxx has secured
other employment by that date or any date thereafter.
c) If Xxxxx forfeits any of the Severance Payments because he
secures employment prior to the latest date the Severance
Payments apply to, an additional retention payment will be
made for an amount equal to the Severance Payments forfeited
("Additional Retention Payment"). The Additional Retention
Payment will be made on the date the last Severance Payment
would have been made if it had not been forfeited.
d) The Vacation Payment and SERP Payment both of which are to be
paid on Xxxxx'x last day of employment.
e) The Bonus Payment, which is to be paid at the same time other
participants receive payment for bonus amounts earned under
the Bonus Plan.
Notwithstanding the above, Xxxxx shall receive the benefit of the
required Notice Period prior to the effective date of termination.
"Cause" shall be defined as gross negligence or willful misconduct,
willfully ceasing to perform normal and customary duties for an
extended period for any reason other than death or disability,
willfully failing to follow the lawful and proper directives of an
officer senior to Xxxxx or the Board of Directors, fraud or
embezzlement in the course of employment, intentional disclosure of
confidential information, willfully engaging in competition or
purposely aiding a competitor, the commission or conviction of a felony
or any other crime that results in material injury or damage to the
Simplicity Group. No action by Xxxxx shall be deemed willful unless
done in bad faith without reasonable belief that such action is in the
best interests of the Simplicity Group.
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6. The policies and procedures described in the Simplicity Group's
Employee Manual will apply to Xxxxx with respect to continued benefits,
including medical, dental, life insurance, and disability, after the
last day of employment. The provisions in the Simplicity Retirement
Savings Plan ("Retirement Plan") regarding termination of employment
will apply to Xxxxx with respect to his account balance in the
Retirement Plan.
7. Prior to April 30, 1999, Xxxxx, Conso, and the Simplicity Group will
mutually agree whether Xxxxx'x employment will continue beyond June 30,
1999. If employment will continue, an appropriate multi-year Employment
Agreement will be negotiated and executed at that time.
8. This letter agreement and the documents referred to herein represent
the entire agreement between the parties with respect to Xxxxx'x
employment by Holdings and supersedes any prior agreements between
them, whether oral or written, including, without limitation, the
Executive Severance Policy of the Simplicity Group that was effective
July 24, 1997.
9. Any disputes with respect to this letter agreement shall be resolved
through arbitration in New York City by the American Arbitration
Association.
10. Conso represents that it is, through its ownership of all the
outstanding common stock of Capital, the ultimate parent company of
Holdings and agrees to take any and all such actions necessary to cause
Holdings, Capital, and Simplicity to abide by the terms of this letter
agreement.
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If the contents herein accurately reflects your understanding of our
agreement, please sign where indicated below and return one copy of this letter
to me.
Thank you.
Sincerely,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
AGREED AND APPROVED:
CONSO PRODUCTS COMPANY
AND
SIMPLICITY HOLDINGS, INC.
BY:
/s/ X. Xxxx Findlay
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X. Xxxx Xxxxxxx
President and Chief Executive Officer, Conso Products Company
President and Chief Executive Officer, Simplicity Holdings, Inc.
