Exhibit 10.3
▇'▇▇▇▇▇▇▇▇ Industries, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ phone
▇▇▇.▇▇▇.▇▇▇▇ fax
▇▇▇▇▇▇▇ ▇. ▇▇▇
Executive Vice President-
Operations
Direct Line: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
e-mail: ▇▇▇▇.▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
August 18, 2004
(as amended October 6, 2004)
Mr. E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇:
This letter agreement will document our discussion concerning the terms of your separation
from ▇'▇▇▇▇▇▇▇▇ Industries, Inc. ("▇'▇▇▇▇▇▇▇▇"). This letter replaces and supersedes the letter
dated August 5, 2004 delivered to you. Both you and ▇'▇▇▇▇▇▇▇▇ agree that your last day of
employment with ▇'▇▇▇▇▇▇▇▇ will be August 13, 2004. Your separation from ▇'▇▇▇▇▇▇▇▇ is an
early retirement because your job has been eliminated.
In recognition of your service, and in consideration of the agreements made by you in this
letter agreement, ▇'▇▇▇▇▇▇▇▇ will make the following arrangements for your benefit.
(1) ▇'▇▇▇▇▇▇▇▇ will pay you your regular salary for the period from (but not
including) August 13, 2004 through and including December 31, 2004. This amount has
been and will continue to be paid through ▇'▇▇▇▇▇▇▇▇'▇ regular biweekly payroll.
(2) ▇'▇▇▇▇▇▇▇▇ will continue your automobile allowance through December 31,
2004, with payments to be made with each of the payments described in paragraph (1)
above.
(3) ▇'▇▇▇▇▇▇▇▇ will pay you for your accrued but unused vacation time through
August 13, 2004 after your employment terminates. You will not accrue additional
vacation time after August 13, 2004.
(4) Through August 31, 2007, you agree to provide ▇'▇▇▇▇▇▇▇▇ consulting
services as an independent contractor with respect to such matters as may be reasonably
requested by persons designated by ▇'▇▇▇▇▇▇▇▇ from time to time. ▇'▇▇▇▇▇▇▇▇ agrees that
your consulting duties hereunder will not unreasonably interfere with any new employment
duties that you may hereafter undertake. ▇'▇▇▇▇▇▇▇▇ will reimburse you for any expenses
you may incur in connection with consulting services to ▇'▇▇▇▇▇▇▇▇.
(5) During the period when you are a consultant to ▇'▇▇▇▇▇▇▇▇, you will be
eligible, at your option, to continue medical and dental insurance coverage for you and
your spouse at the regular employee contribution rates in effect from time to time. Please
contact Human Resources to arrange for the payment of the premiums if you wish to
continue medical and dental insurance. After August 31, 2007 you will be entitled to
continue your medical and dental coverage under COBRA for 18 months at the applicable
COBRA premium rate established by ▇'▇▇▇▇▇▇▇▇'▇ Human Resources Department. You
should contact ▇'▇▇▇▇▇▇▇▇'▇ Human Resources Department as August 31, 2007 approaches
to arrange for payment of the premiums for COBRA coverage if you desire it. In the
event that you become eligible for medical insurance coverage from another employer
plan, ▇'▇▇▇▇▇▇▇▇'▇ obligation to provide you insurance will terminate. You agree, as a
part of your obligations under this agreement, to tell us promptly if you become eligible
for coverage under another plan.
(6) Distributions under the ▇'▇▇▇▇▇▇▇▇ Industries Holdings, Inc. Savings and
Profit Sharing Plan and the ▇'▇▇▇▇▇▇▇▇ Industries Holdings, Inc. Deferred Compensation
Plan will be made in accordance with the terms of the respective plans. You will receive
separate documentation and forms about these plans. You will continue to hold your stock
in ▇'▇▇▇▇▇▇▇▇ Industries Holdings, Inc. subject to the existing agreements among the
various parties thereto. Those agreements are not affected by this Agreement. Your stock
options will be governed by the option agreements between ▇'▇▇▇▇▇▇▇▇ and you, as the
agreements may be amended. We agree to recommend to the Compensation Committee
that your stock options continue as though you were still an ▇'▇▇▇▇▇▇▇▇ employee.
(7) ▇'▇▇▇▇▇▇▇▇ will maintain the following benefits in place for you through
December 31, 2004:
(a) term life insurance;
(b) long-term disability insurance; and
(c) accidental death and dismemberment insurance.
(8) ▇'▇▇▇▇▇▇▇▇ will withhold any taxes required by federal or state governments
from the payments described above.
(9) Your participation in all other benefits, including the Amended and Restated
Termination Protection Agreement dated as of February 1, 1996 between ▇'▇▇▇▇▇▇▇▇
Industries Holdings, Inc. and you, will end effective as of August 13, 2004.
In return for the payments outlined above, you agree to the following.
(A) You agree that you are not eligible for any severance benefits, or any other amounts
from ▇'▇▇▇▇▇▇▇▇ or its affiliates, other than those described herein.
(B) Release. In return for the money ▇'▇▇▇▇▇▇▇▇ is paying you, you agree to release
▇'▇▇▇▇▇▇▇▇, its subsidiaries, parent companies (including without limitation Bruckmann, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & Co. II, L.P.) and each of their respective affiliates, employees, directors, officers and
employees (collectively, the "released parties") from any claims you may have against them.
That means you can't ▇▇▇ the released parties for any reason, whether you know about the claim
when you sign this agreement or not. The types of common law and statutory claims you release
and waive include but are not limited to the following:
-> tort claims (for example, personal injury or property damage);
-> breach of contract claims, whether express or implied, oral or written;
-> claims of wrongful discharge;
-> defamation, including libel or slander, published by ▇'▇▇▇▇▇▇▇▇ prior to your
retirement date;
-> intentional or negligent infliction of emotional distress;
-> rights under federal, state or local laws, specifically including laws prohibiting
discrimination on the basis of
-> race or color,
-> sex (whether sex discrimination or sex harassment),
-> age,
-> religion,
-> national origin,
-> handicap or disability
-> or other forms of discrimination or any retaliation.
The rights waived specifically include rights under the following federal acts and any state or local
counterparts, including but not limited to the following:
-> the Americans with Disabilities Act,
-> the Civil Rights Act of 1964, as amended,
-> the Civil Rights act of 1991,
-> the Age Discrimination in Employment Act ("ADEA"), as amended,
-> the Employee Retirement Income Security Act (except as to those rights reserved
below),
-> the Consolidated Omnibus Budget Reconciliation Act ("COBRA"),
-> the National Labor Relations Act,
-> the Family Medical Leave Act,
-> the Older Workers Benefit Protection Act,
-> the Fair Labor Standards Act,
-> the Missouri Service Letter Statute, 290.140 RSMo.,
-> 42 U.S.C. §§ 1981, 1983 and 1985,
-> the Missouri Human Rights Act,
-> the Workers Adjustment and Retraining Notification Act,
-> the Equal Pay Act,
-> the Occupational Safety and Health Act,
-> the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, and
-> other federal, state or local statutes, laws and ordinances that protect employees.
(C) The only claims arising out of your employment, or the termination of your
employment, which you are reserving and not releasing are these:
-> You are not releasing your right to vested benefits under ▇'▇▇▇▇▇▇▇▇'▇ Savings and
Profit Sharing Plan or ▇'▇▇▇▇▇▇▇▇'▇ Deferred Compensation Plan.
-> You are not releasing your right to continue your medical and dental coverage as
outlined herein and under COBRA at the applicable premium rate.
-> You are not releasing any Workers Compensation claims that may arise before
your employment with ▇'▇▇▇▇▇▇▇▇ ends. By signing this agreement you are
representing to ▇'▇▇▇▇▇▇▇▇ that unless you have already filed a Workers
Compensation claim before the date you sign this agreement, you know of no facts
leading you to believe you have a work related injury or illness, which would
allow or entitle you to file a Workers Compensation claim against ▇'▇▇▇▇▇▇▇▇ after
the date on which you sign this agreement.
-> This letter agreement does not waive any claims that may arise in the future under
the Age Discrimination in Employment Act. This letter agreement does release
any ADEA claims up to the date this letter agreement becomes effective.
-> Of course, you are not releasing your rights under this letter agreement if
▇'▇▇▇▇▇▇▇▇ should not fulfill its obligations hereunder.
-> This letter agreement does not change the terms of, or release the rights of any
party with respect to, your ▇'▇▇▇▇▇▇▇▇ stock options or your stockholdings in
▇'▇▇▇▇▇▇▇▇ or the agreements executed in connection therewith.
(D) By signing this letter agreement, you are waiving and giving up your right, if any,
to bring suit and collect damages or otherwise recover from ▇'▇▇▇▇▇▇▇▇ or the other Released
Parties for any alleged violation by any of them of any federal, state or local statutes, ordinances
or common laws, including but not limited to claims under the ADEA and claims under other
statutes and ordinances which bar discrimination based on age, sex, race, color, national origin,
religion, handicap or veteran status. This letter agreement covers all claims in connection with
your employment and the termination and resignation of your employment.
(E) You agree to return any files, records, documents, plans, drawings, equipment,
software, pictures, spreadsheets and any other property belonging to ▇'▇▇▇▇▇▇▇▇ which may be in
your possession.
(F) You agree not to disclose or communicate to any person or to use for your benefit
or the benefit of another person any confidential or proprietary information concerning ▇'▇▇▇▇▇▇▇▇
or any of its affiliates, suppliers or customers, including but not limited to specific processes,
procedures, customer lists, financial information, etc. which may be regarded as confidential.
(G) While you are a consultant for ▇'▇▇▇▇▇▇▇▇, you will not directly or indirectly at any
time, whether as employee, owner, partner, agent, director, officer, consultant or shareholder,
solicit, divert or accept business competitive with ▇'▇▇▇▇▇▇▇▇'▇ business as it now exists or as it
may exist or be contemplated during the term of your service as a consultant for ▇'▇▇▇▇▇▇▇▇.
Similarly, you will not, and will not endeavor to, take away or interfere with any customer of
▇'▇▇▇▇▇▇▇▇. In particular, you will not act as an officer, director, owner, partner, agent,
employee, consultant or agent of any corporation manufacturing or distributing (or planning to
manufacture or distribute) ready-to-assemble furniture in competition with ▇'▇▇▇▇▇▇▇▇, including
without limitation ▇▇▇▇▇▇ Woodworking, Studio RTA, ▇▇▇▇ Industries, Inc., Dorel Industries,
Inc., ▇▇▇▇▇ Pride or Masco Corp. or Creative Interiors or Furniture Brands International, Inc.,
or any successor to or affiliate of any of such companies. Notwithstanding the preceding
sentence, you may invest in the securities of any corporation whose securities are traded on a
national securities exchange or on NASDAQ if your ownership of such corporation would be less
than one percent of the outstanding voting stock of such corporation.
(H) While you are a consultant for ▇'▇▇▇▇▇▇▇▇, you will not, directly or indirectly,
whether as an individual or on behalf of any other person, firm, corporation, partnership, joint
venture or other entity, solicit, induce or endeavor to entice away from ▇'▇▇▇▇▇▇▇▇ any employee
employed by ▇'▇▇▇▇▇▇▇▇, either on your own behalf or on behalf of any firm, person or entity with
whom you are employed or associated, whether as employee, owner, partner, agent, director,
officer, consultant or shareholder. This paragraph shall not be construed as prohibiting you from
hiring an employee of ▇'▇▇▇▇▇▇▇▇ who first contacts you with respect to employment.
(I) The provisions of paragraphs (F), (G) and (H) are in addition to, and do not
supersede, similar covenants you have already agreed to in other agreements between ▇'▇▇▇▇▇▇▇▇
any yourself.
(J) You acknowledge that you have freely entered into this Agreement and that no
representations or promises other than those stated herein have been made to you. You are
advised to consult with an attorney before signing this letter agreement. By signing this letter
agreement, you acknowledge that you have had the opportunity to consult with your attorney,
accountant or financial advisor at your expense and that you have had 45 days in which to
consider whether you want to sign this letter agreement. It is agreed that any changes to this letter
agreement, whether material or not, do not restart the running of this 45-day period. You may
sign and return this agreement in less than 45 days if you do not wish to use the entire 45 days
to decide whether you want to sign this agreement. If you sign, date, and return this agreement
in less than 45 days, you are agreeing that you did not need the full 45 days to decide whether you
want to sign this agreement, and you are waiving your right to use the unused portion of the 45
days. If you sign, date, and return this agreement in less than 45 days, the required seven-day
revocation period will start to run on the date you sign the agreement. The agreement will
become final and irrevocable only when the seven-day revocation period has expired, and
▇'▇▇▇▇▇▇▇▇ will not issue its check for your lump sum payment until after the seven-day revocation
period has expired and the agreement has become final and fully enforceable.
(K) In the event of a breach or threatened breach by you, ▇'▇▇▇▇▇▇▇▇ may cancel any
remaining payments to you and cease any further benefits. This will not be construed, however,
to limit the remedies available to ▇'▇▇▇▇▇▇▇▇ in the event of such breach and your release and
waiver of claims against ▇'▇▇▇▇▇▇▇▇ shall continue to be valid and in effect.
(L) If any provision of the covenants and agreements set forth in paragraphs (F), (G)
or (H) of this agreement shall be held invalid or unenforceable because of the scope of the
territory or the actions thereby restricted, or the period of time within which such covenant or
agreement is operative, or for any other reason, it is the intent of the parties hereto that such
provision shall be construed by limiting and reducing it, or, if necessary, eliminating it so that the
provisions hereof be valid and enforceable to the extent compatible with applicable law as
determined by a court of competent jurisdiction.
(M) You and ▇'▇▇▇▇▇▇▇▇ agree not to make any disparaging or critical remarks
concerning each other or any of ▇'▇▇▇▇▇▇▇▇'▇ affiliates and their respective officers, directors and
employees and will assist each other in preserving and promoting their respective goodwill and
other business interests. You expressly acknowledge you will obey all laws in connection with
rendering services to ▇'▇▇▇▇▇▇▇▇ and will be governed by the highest moral and ethical standards,
reflecting these values: integrity, honesty, loyalty, trust, fairness and responsibility. You will
analyze your duties hereunder in order to avoid any action that could be interpreted as a conflict
of interest. ▇'▇▇▇▇▇▇▇▇ has informed you that it will suffer serious damages in the event of a
violation of this paragraph.
(N) You acknowledge that neither ▇'▇▇▇▇▇▇▇▇ nor its legal counsel has made any
representations regarding the tax implications of any payments made by ▇'▇▇▇▇▇▇▇▇ under this
letter agreement. You understand that any liability for federal, state and local income and other
withholding taxes remains with you.
(O) You agree to cooperate in any investigations conducted by ▇'▇▇▇▇▇▇▇▇ for which
▇'▇▇▇▇▇▇▇▇ believes You to be a holder of information or to have knowledge of relevant facts.
You agree to participate in interviews and cooperate in ▇'▇▇▇▇▇▇▇▇'▇ efforts to gather information
concerning any allegations of improper or unlawful conduct or occurrences or other matters
investigated by ▇'▇▇▇▇▇▇▇▇. You also agree to cooperate with ▇'▇▇▇▇▇▇▇▇ and its counsel in any
litigation or anticipated litigation involving ▇'▇▇▇▇▇▇▇▇, by making yourself available for
interviews, fact gathering, and questioning, and for appearing at depositions and/or trial without
the necessity of being served with a subpoena. To the maximum extent permitted by applicable
law, you shall not assist or facilitate in the prosecution of any civil claims or litigation against
▇'▇▇▇▇▇▇▇▇, and if requested to do so, you shall promptly notify ▇'▇▇▇▇▇▇▇▇. This Agreement shall
not affect ▇'▇▇▇▇▇▇▇▇'▇ obligations to indemnify current and former officers and directors pursuant
to Article VIII of ▇'▇▇▇▇▇▇▇▇'▇ Second Amended and Restated Certificate of Incorporation or
Article VI of ▇'▇▇▇▇▇▇▇▇'▇ By-Laws.
(P) This Agreement constitutes the entire agreement between the parties with respect
to the matters contemplated by this Agreement. Except as otherwise provided in this Agreement,
no change, modification or waiver of any provision of this Agreement will be valid unless in
writing and signed by both ▇'▇▇▇▇▇▇▇▇ and you.
▇'▇▇▇▇▇▇▇▇ and you agree that if a dispute arises regarding this letter agreement, other than
one involving a breach of paragraphs (F), (G) or (H), such dispute shall be submitted to binding
arbitration in Kansas City, Missouri. The arbitration is to be conducted before an arbitrator
mutually agreed upon by ▇'▇▇▇▇▇▇▇▇ and you and pursuant to procedures to be mutually agreed
upon by us. However, if ▇'▇▇▇▇▇▇▇▇ and you cannot agree upon an arbitrator and/or the
procedures for the arbitration, the choice of an arbitrator and the procedures to be followed in the
arbitration shall be determined in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA"), except to the extent the
parties agree otherwise in writing. Except to the extent federal law applies or preempts state law,
Missouri law, without reference to its conflicts of law rules, shall govern the interpretation of this
agreement, whether in any such arbitration or otherwise. The arbitrator shall follow applicable
federal and state law and award such relief as is allowed under applicable federal and state law.
▇'▇▇▇▇▇▇▇▇ and you further agree that judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. The reasonable attorneys' fees and expenses
of appearing at the arbitration and preparing for the arbitration proceeding, and the fees and
expenses of the arbitrator and any fees of AAA shall be determined by the arbitrator, who will
be authorized to require the loser to pay the winner's reasonable fees and expenses to the extent
allowed by applicable federal and state law or to fairly apportion the attorneys' and arbitrator's
fees and expenses between the parties if both parties prevail on some aspects of the dispute in
accordance with applicable federal and state law. However, if an arbitrator or a court should
determine that the allocation of fees and expenses of the arbitration and the arbitrator as set forth
above is unenforceable or illegal, this Agreement shall be construed to require ▇'▇▇▇▇▇▇▇▇ to pay
the fees and expenses of the arbitration and the arbitrator in accordance with applicable federal
and state law, and a party should only recover attorneys fees from the adverse party if such
recovery is permitted under applicable federal and state law.
A breach of paragraphs (F), (G) or (H) above could result in irreparable and continuing
damage to ▇'▇▇▇▇▇▇▇▇ for which there will be no adequate remedy at law, and in the event of such
breach, ▇'▇▇▇▇▇▇▇▇ shall be entitled to injunctive and other and further relief, including damages,
attorneys' fees and litigation costs, as may be proper. ▇'▇▇▇▇▇▇▇▇ may apply to any court of
competent jurisdiction for such relief and damages.
Under the Older Workers Benefit Protection Act, ▇'▇▇▇▇▇▇▇▇ must give workers over 40
years old certain information and allow them to consider this offer for at least 45 days. Attached
is information regarding salaried personnel changes being made at ▇'▇▇▇▇▇▇▇▇, along with a list
of all salaried positions and the respective ages of the incumbents.
We encourage you to take this letter agreement home with you and to consider it carefully.
If you have questions regarding this letter agreement, please call ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. We encourage
you to reflect on the rights being released by you in this letter agreement and to discuss this letter
agreement and the release language contained in it with your attorney. In any event, you should
thoroughly review and understand the effect of this letter agreement and the release language
before signing it. You have until October 11, 2004 to consider this letter agreement and indicate
whether you will sign this letter agreement.
To accept ▇'▇▇▇▇▇▇▇▇'▇ offer, you must sign and return this letter agreement no later than
October 11, 2004.
Pursuant to the Older Workers Benefit Protection Act, this letter agreement cannot become
effective and enforceable until seven days following its execution. Hence, the monies payable
under this letter agreement may not be paid until seven days have elapsed after you sign this letter
agreement. This letter agreement will not become effective or enforceable until the eighth day
following its execution by you. For seven days following your execution of this letter agreement,
you may revoke it by giving written notice of revocation to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
If you revoke this letter agreement, ▇'▇▇▇▇▇▇▇▇ will not owe you any money under this letter
agreement. If you sign and do not revoke this letter agreement within seven days after signing
it, ▇'▇▇▇▇▇▇▇▇ will make the payments to you as described herein at the times specified herein.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION
PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
Very truly yours,
▇'▇▇▇▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇
Executive Vice President-Operations
Accepted and Agreed to this
8th day of October, 2004
/s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
