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EXHIBIT 10.2
RELEASE AGREEMENT
This Release Agreement is made and entered into effective on the 27th
day of June, 2000 between Xxxxxxx X. Xxxxxxx, an individual resident of Illinois
("Xxxxxxx") and Enesco Group, Inc. a Massachusetts corporation with its
principal place of business located in Itasca, Illinois, ("Enesco").
WHEREAS, Xxxxxxx and Enesco entered into an Employment Agreement dated
June 29, 1999 pursuant to which Xxxxxxx was retained by Enesco as its President
and Chief Executive Officer (the "Employment Agreement"), a copy of which is
attached to and incorporated by this reference in this Agreement as Exhibit "1";
and
WHEREAS, Xxxxxxx and Enesco have mutually agreed to the resignation of
Xxxxxxx as a Director and President and Chief Executive Officer of Enesco and
all of subsidiaries of Enesco, which resignation was effective June 27, 2000;
and
WHEREAS, the parties desire to enter into this Release Agreement
pursuant to the Employment Agreement on the terms and conditions hereafter set
forth;
Now, therefore, for good and valuable consideration, the receipt and
sufficiency of which are expressly acknowledged by both Xxxxxxx and Enesco, it
is hereby agreed as follows:
1. Employment Status. Xxxxxxx'x employment with Enesco terminated on
June 27, 2000 (the "Termination Date"). As of the Termination Date, Xxxxxxx'x
salary as an employee of Enesco ceased and any entitlement Xxxxxxx has or might
have under any Enesco-provided benefit programs terminated, except as required
by applicable law and regulation and except as expressly provided in this
Agreement and the Employment Agreement.
2. Salary and Benefits. The parties acknowledge and agree that Xxxxxxx
is entitled to receive the salary, bonus and benefits provided for in Paragraph
4(e) of the Employment Agreement as summarized in the letter dated September 14,
2000 attached as Exhibit "A", and in consideration for the Release by Xxxxxxx
provided in Paragraph 3 of this Agreement, but provided that Xxxxxxx does not
revoke this Agreement as provided in paragraph 10(a) and except as specified in
paragraph 9, Enesco covenants and agrees to provide such salary, bonus and
benefits as defined in Paragraphs 3(a), 3(b) and 3(c) of the Employment
Agreement, as modified by Paragraph 4(e) of the Employment Agreement for a
period of three years from the date of this Agreement until June 26, 2003, as
summarized in the letter dated September 14, 2000 attached as Exhibit "A".
3. Release. In exchange for the payments and other benefits described
in Paragraph 2 and other good and valuable consideration, Xxxxxxx hereby agrees
that Xxxxxxx and Xxxxxxx'x representatives, heirs, executors, administrators,
agents, estate, successors and assigns release and forever discharge Enesco, its
affiliates and/or their respective successors, predecessors, assigns, directors,
stockholders, officers, employees and/or agents, both individually and in their
official capacities with Enesco and/or its affiliates, from any and all actions,
causes of action, suits, claims, demands, obligations, costs, judgments,
complaints, contracts, agreements, promises, debts, claims, damages and
liabilities of whatever kind or nature, at law, in equity or otherwise, whether
existing or
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contingent, known or unknown, arising out of Xxxxxxx'x employment with or
Xxxxxxx'x termination of employment from Enesco; provided, however, that nothing
contained herein shall limit Xxxxxxx'x right to enforce the Employment
Agreement, Xxxxxxx'x rights under any benefit plans of Enesco, or Xxxxxxx'x
right to indemnification as a director, officer or employee of Enesco and its
affiliates. This release is intended by Xxxxxxx to be all-encompassing and to
act as the full and total release of any claims (other than to enforce the
Employment Agreement or to seek indemnification as aforesaid) that Xxxxxxx may
have or has had against Enesco and/or its affiliates and/or their successors,
predecessors, assigns, directors, stockholders, officers, employees and/or
agents, both individually and in their official capacities with Enesco and/or
its affiliates, including but not limited to claims arising under common law,
contracts, implied contract, public policy, tort, personal injury, or any
federal, state or local statute, law, constitution, ordinance, regulation or
order, including but not limited to the Age Discrimination in Employment Act, as
amended, 29 U.S.C. 621, et seq., the Employment Retirement Income Security Act,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act,
the Family and Medical Leave Act, the Illinois Human Rights Act, Ill. Rev. Stat.
Ch. 68, Sec. 1-101, et seq. and/or any applicable employment related federal,
state or local statute, law, ordinance, regulation or order in the United
States.
4. Waiver of Rights and Claims Under The Age Discrimination In
Employment Act, As Amended. Xxxxxxx has been informed that, because Xxxxxxx is
40 years of age or older, Xxxxxxx has or might have specific rights and/or
claims under the Age Discrimination in Employment Act, as amended. In connection
with the consideration described in Paragraph 2 above, Associate specifically
waives such rights and/or claims to the extent that such rights and/or claims
arose prior to the date this Agreement was executed, as more fully set forth in
Paragraph 10(a).
5. Company Files, Documents And Other Property. Xxxxxxx warrants that,
on or prior to the date of execution of this Agreement, Xxxxxxx has returned to
Enesco and/or one or more affiliates of Enesco all keys, laptop computers,
cellular telephones, hand held personal data organizers, other equipment, credit
cards or other items, including all business files, reports, books, data and
documents, that have been in Xxxxxxx'x possession and that are the property of
Enesco and/or one or more affiliates.
6. Change in Control. The obligation of Enesco to continue and to
provide the salary and benefits to Xxxxxxx as set forth in Paragraph 2 of this
Agreement shall survive any change in control of Enesco by merger, acquisition
or other means and shall continue as an obligation of Enesco and any successor
in interest of Enesco.
7. Stock Options. All outstanding vested Stock Options previously
awarded to Xxxxxxx by Enesco shall continue on the terms and conditions set
forth in the respective Stock Option Plan Agreements pursuant to which they were
awarded.
8. Expenses. Enesco shall reimburse Xxxxxxx for all outstanding
expenses incurred in connection with the business of Enesco and Xxxxxxx agreed
to submit expense reports to Enesco for all such expenses within thirty (30)
days of the date of this Agreement.
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9. Survival of Other Obligations. The obligations and undertakings of
Xxxxxxx set forth in Paragraphs 5 and 6 of the Employment Agreement shall
continue in full force and effect according to their terms, and Enesco's
continuing obligations pursuant to Paragraph 2 of this Agreement and Paragraph
4(e) of the Employment Agreement are expressly conditioned upon Xxxxxxx'x
continued compliance with Paragraphs 5 and 6 of the Employment Agreement and the
execution and return of this Release Agreement, and Xxxxxxx'x not revoking this
Agreement after its execution, pursuant to Paragraph 10(a).
10. Representations And Governing Law.
(a) Xxxxxxx has been advised by Enesco to consult with an
attorney prior to executing this Agreement and Xxxxxxx acknowledges and
represents that he has retained the services of Xxxx Xxxxxxxxxx, Esquire of
Xxxxx & Xxxxxx to represent him in connection with this Agreement. Xxxxxxx
acknowledges that Xxxxxxx understands the terms and effect of this Agreement and
that Xxxxxxx has had twenty-one days to consider whether to execute this
Agreement. Xxxxxxx further acknowledges that within seven days from the date of
the execution of this Agreement, Xxxxxxx may, at Xxxxxxx'x sole option, revoke
this Agreement upon written notice to General Counsel, Enesco Group, Inc., 000
Xxxxxxx Xxxxx, Xxxxxx, XX 00000 and that this Agreement will not become
effective until the seven day revocation period has expired.
(b) This Agreement represents the complete understanding between
the parties, supersedes any and all other agreements, letters, memoranda,
correspondence and understandings, whether oral or written, except as expressly
stated hereto to the contrary, and may not be modified, altered or changed
except upon written consent of the parties. If any of the provisions of the
Agreement are determined to be invalid or inoperative, such determination shall
not affect the efficacy of the remainder of the Agreement and any such invalid
or inoperative provision shall be deemed severable.
(c) The Agreement shall be governed by and construed in
accordance with the Laws of the State of Illinois, without giving effect to the
principles of conflicts of law thereof.
(d) Xxxxxxx represents that Xxxxxxx has read the foregoing
Agreement, fully understands the terms and conditions of this Agreement and is
knowlingly and voluntarily executing the same without any duress or undue
influence. In entering into the Agreement, Xxxxxxx does not rely on any
representation, promise or inducement made by Enesco and/or its affiliates, with
the exception of the consideration described in this document. Xxxxxxx
understands that, once Xxxxxxx executes the Agreement and after expiration of
the revocation period provided in Paragraph 10(a), Xxxxxxx will be bound by its
terms.
(e) The Employee agrees to cooperate fully with the Company and
any of the parties released under Paragraph 3 in investigating, defending
prosecuting, litigating, filing, initiating or asserting any claims or potential
claims (whether legal equitable, administrative, or other) that may be made by
or against the
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Company or any of the other parties released under paragraph 3 and that may
relate to or arise out of the Employee's employment with the Company. Company
agrees to reimburse to Employee any reasonable expenses incurred by Employee for
travel, hotel, and similar costs in connection with Employee's compliance with
this paragraph, and further agrees to provide reasonable prior notice of any
necessary compliance in order to minimize interference with Employee's
employment responsibilities with any other employer.
(f) Nothing in this Agreement is intended to or shall be
construed as an admission by the Company or any of the other parties released
under Paragraph 3 that any of them violated any law, interfered with any right,
breached any obligation or otherwise engaged in any improper or illegal conduct
with respect to the Employee or otherwise. The Company and the other parties
released under Paragraph 3 expressly deny any such illegal or wrongful conduct.
Executed this 25th day of September, 2000.
Enesco Group, Inc.
By: /s/ Xxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------- -----------------------------
Xxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx
Chairman of the Board
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[LETTERHEAD OF ENESCO]
September 14, 2000
Xxxx Xxxxxxxxxx, Esq.
Xxxxx & Ratner
8th Floor
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: Xxxx Xxxxxxx Release Agreement
Dear Xxxx:
I have reviewed our correspondence and telephone conversations regarding Xxxx
Xxxxxxx'x Employment Agreement and Release with the Board and have explained the
requests you made in our last phone conversation of two weeks ago. The Board has
made its final decision of these open matters which are summarized below:
In order to minimize any future questions, I am again summarizing below the
various aspects of the severance to which Xxxx is entitled under his Employment
Agreement and Company Policy by incorporating the items from my August 4 and
August 22 letters to you, modified to the extent possible to accommodate your
most recent comments and suggestions. A revised Release Agreement is attached,
incorporating the agreed changes. These items are contingent on execution and
non-revocation of the Release Agreement:
1) Salary. The annual base salary of $495,000 will be continued for three
years from June 27, 2000 to June 26, 2003 and will be payable bi-weekly in
accordance with Enesco's normal payroll practices.
2) Car Allowances. The car allowance of $30,000 annually will be continued for
three years from June 27, 2000 to June 26, 2003, subject to increase based
on periodic review by Enesco's Treasury Department as provided in Section
3(c) of the Employment Agreement and will be payable bi-weekly. I have
requested the Payroll Department to be sure that the car allowance is
included with the bi-weekly checks and to make up any shortfalls once the
Release Agreement is finally effective.
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September 14, 2000
3) Management Incentive Bonus. Jeff's participation in the Management
Incentive Bonus Plan of Enesco will continue for the calendar years 2000,
2001 and 2002, in accordance with the terms of that Plan, except that any
bonus will be based on corporate performance rather than individual
performance goals, as provided in Section 4(e) of the Employment Agreement.
No MIP bonus will apply for 2003 as the Plan expressly requires employment
on December 31, 2003 to qualify. For your information, Xx. Xxxxxxxxx was
entitled to a pro-rated MIP for the final, partial calendar year of his
three year severance period, because the MIP Plan then in effect
specifically provided for such pro-ration. The MIP Plan was subsequently
changed in 1999 at Jeff's insistence to provide that an associate must be
employed on December 31 to be eligible for the MIP.
4) Medical Annual Executive Benefit. This benefit in the amount of $5,000
annually, will continue in full for 2001, 2002 and 2003. In addition, Xxxx
will be reimbursed for an annual physical exam in 2001, 2002 and 2003
(prior to June 27, 2000) up to $500 annually on presentment of a statement
of the charges.
5) Financial Planning Annual Benefit. This benefit in the amount of $5,000
annually, will continue in full for 2001, 2002 and 2003.
6) Life Insurance. Reimbursement for term life insurance premiums on Jeff's
life for coverage up to 3 times the annual final base salary will continue
for coverage through June 26, 2003, on presentment of premium statements.
Xxxx will be reimbursed for the full premium amount, unless the premium
rate for the same coverage level from the Company's then group life
insurance carrier is less, in which case Xxxx will be reimbursed only for
the lower group cost for the same level of coverage. Xxxx will be notified
if there is a change in the group life insurance carrier and a resulting
reduction in group life insurance rates.
7) Short Term and Long Term Disability Insurance. This coverage will be
continued at no less than the current levels through June 26, 2003, subject
to increase based on periodic review by Enesco's Treasury Department as
provided in Section 3(c) of the Employment Agreement. A summary of the
current coverage has been requested and will be provided shortly.
8) Health Insurance. Coverage under Enesco's group health, vision, drug and
dental insurance plans will be continued for both Xxxx and his wife to the
earlier of age 65 for each, death or eligibility for Medicare, at not less
than the current levels of coverage, subject to increase based on periodic
review by Enesco's Treasury Department as provided in Section 3(c) of the
Employment Agreement and on not less than the same proportionate premium
contribution levels applicable to Enesco employees, as modified from time
to time. Coverage also will include Jeff's other eligible dependents (as
defined in the applicable plans) through June 26, 2003.
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September 14, 2000
9) Retirement 401(K) Plan. Contributions and coverage will be provided as
stated in the applicable Plan, a copy of which was attached to the August 4
letter. There is no provision in the 401K Plan for participation by a
non-employee, and federal tax law prohibits participation by a
non-employee. Xx. Xxxxxxxxx also was not eligible to participate after the
date of his termination as an employee and did not participate. The Board
has determined not to make an exception in Jeff's case.
10) Stock Options. Outstanding stock options granted to Xxxx will be treated as
provided in each applicable Plan, based on his termination date of June 27,
2000.
11) Other Benefits. The Employment Agreement also provides for continuation of
all other "standard" insurance and other benefits maintained by Enesco for
its employees and directors, for the period ending June 26, 2003; however,
I am not aware of any other such standard benefits which would be included
in Jeff's post termination compensation. The provision of a laptop
computer, Palm Pilot, monthly phone bills and AOL and AT&T Internet
connections were treated by Enesco as business expenses of Enesco, not as
employment benefits granted to Xxxx. For that reason, they were not
reported as income to Xxxx on his W-2 forms. These employee expenses can no
longer be continued after Jeff's termination, although it has been agreed
that Xxxx can purchase the laptop and Palm Pilot, if he wishes to do so, at
current residual value. The IT Department will prepare a separate statement
of this residual value once this Release is signed, and Xxxx can then
decide either to send a check or return the equipment. The charitable
contribution match will continue for the three year term, with a pro-ration
for 2003. Any vacation accrued on a proportionate basis up to June 27,
2000, reduced by any vacation charged through June 27, will be paid in full
when the Release becomes effective and is not revoked as provided in
Paragraph 10(a) of the Release.
Xxxx was already covered under the D&O policy and By-law
indemnification provision for any claim, whenever made, based on Jeff's conduct
or actions while an Enesco employee; therefore, there is no special language
amendment required to cover these matters. In that regard, we discussed the
pending lawsuit filed by Royce & Company, naming Xxxx as a party, based on
alleged insider stock purchases. A copy of the Complaint and the retainer letter
for Xxxx from Skadden, Arps, Slate, Xxxxxxx & Xxxx is attached.
There is no provision allowing future elective deferrals under the
Cafeteria Plans since tax deferrals are only available to employees under
applicable tax law and Enesco therefore can no longer continue such deferrals. I
have raised your request for continuation of the pre-tax or tax deferral
benefits, and the Board has decided that there is no basis for an exception for
Xxxx.
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September 14, 2000
I trust you will find the enclosed Release Agreement in order and that
we can proceed with the execution. As provided in the Employment Agreement, the
Release is to be in form satisfactory to Enesco. Please return two fully
executed originals to me for signing by Enesco, after which I will return a
fully-executed original to you. Also, please have Xxxx sign the formal
Resignation which I sent to you already (copy attached) and both copies of the
enclosed retainer letter from Skadden, Arps.
Sincerely,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Senior Vice President and General Counsel
Attachments
