EXHIBIT 99.2
GENERAL RELEASE AND SEPARATION AGREEMENT
BY AND BETWEEN XXXXX X. XXXXXX AND SALTON, INC.
This General Release and Separation Agreement (hereinafter the "Agreement")
is dated as of December 5, 2005, by and between XXXXX X. XXXXXX (hereinafter
"Xxxxxx") and SALTON, INC. (hereinafter the "Company").
WHEREAS, Xxxxxx is currently in the employ of the Company; and
WHEREAS, Xxxxxx has resigned from all offices, titles and positions he held
with the Company and its affiliates, effective December 5, 2005;
IT IS THEREFORE EXPRESSLY AGREED AS FOLLOWS:
1. RECITALS. The recitals set forth above are incorporated into and made a
part hereof.
2. RESIGNATION. Effective the date hereof, Xxxxxx hereby resigns from all
offices, titles and positions he holds with the Company and its affiliates. For
purposes of this Agreement, "affiliates" shall have the meaning set forth in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended.
From the date hereof until December 31, 2005, Xxxxxx agrees to continue as an
employee of the Company performing special projects as may be assigned to him
from time to time by the Chief Executive Officer and/or Chief Operating Officer
of the Company. Xxxxxx shall use his reasonable best efforts to perform
faithfully and efficiently the special projects; provided, however, that Xxxxxx
shall be entitled to pursue alternative employment opportunities from within or
outside his office at the Company during such period; provided, further, that if
Xxxxxx is required to be away from his office at the Company during normal
business hours to pursue such opportunities, then he shall notify the Chief
Operating Officer of the Company at least 24 hours in advance of such required
absence.
Xxxxxx shall be entitled to use his current office in connection with the
performance of the special projects from the date hereof through December 31,
2005.
3. PAYMENT. Except as otherwise provided in this Agreement, the Company
will make payments to Xxxxxx in the amount of $11,538.46, minus appropriate and
customary payroll deductions, each every two weeks, commencing with the first
regular payroll payment date following Xxxxxx'x execution and delivery of this
Agreement, until the earlier of: (x) the date Xxxxxx secures alternative
employment with an employer and (y) an aggregate of $300,000, minus customary
payroll deductions, has been paid to Xxxxxx pursuant to this sentence of Section
3 (the earlier of clause (x) and (y) of the preceding sentence is sometimes
referred to herein as the "Payment Period"). Xxxxxx agrees to immediately advise
the Company's General Counsel, in writing, if he secures alternative employment
with an employer. Each of the payments pursuant to the immediately preceding
sentence shall be made on the Company's regular payroll payment date for the
period with respect to which the payment is being made.
In the event that Xxxxxx secures alternative employment with an employer
prior to end of the Payment Period, then the Company shall pay to Xxxxxx an
amount, less appropriate and customary payroll deductions, equal to 50% of the
difference between $300,000 and the aggregate amount paid to Xxxxxx pursuant to
this Section 3 prior to the date Xxxxxx secures such alternative employment.
Xxxxxx shall be paid the benefits he is entitled to receive upon
termination of the Salton, Inc. Flexible Deferral Plan, such benefits to be paid
at the same time as the other executive officers of the Company receive their
benefits in connection with the termination of such Plan.
Xxxxxx acknowledges and agrees that he will not receive any bonus (formula,
discretionary or of any other type) under any bonus plan of the Company or its
affiliates for any
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prior fiscal years, the current fiscal year or future fiscal years, and Xxxxxx
waives and releases any claims to any such bonuses.
4. MEDICAL AND DENTAL INSURANCE; OTHER BENEFITS. During the Payment Period,
Xxxxxx, his spouse and any other member of his family who is currently covered
with respect to the Company's normal employee medical and dental indemnity plans
shall be entitled to continue their participation in such plans. Notwithstanding
the foregoing, if during the Payment Period, Xxxxxx becomes eligible for
coverage under the same or substantially similar medical and dental coverage, he
will immediately advise the Company's General Counsel, in writing, of this fact,
and the Company will cease providing such coverage. During the Payment Period,
Xxxxxx also will continue to be provided the use of the leased vehicle currently
used by Xxxxxx, subject to the same terms and conditions as he received as an
executive officer of the Company. Other than as specifically set forth above,
all other benefits to which Xxxxxx was entitled as an officer and/or employee of
the Company immediately prior to the date hereof, shall no longer be applicable
from and after the date hereof.
The parties acknowledge and agree that Xxxxxx, as a former officer of the
Company and certain Company affiliates: (i) is and will remain entitled to
indemnification under the Company's By-Laws to the same extent and upon the same
conditions as active officers or employees of such entities are entitled to
indemnification as of the date hereof with respect to actions, suits or
proceedings of whatever nature brought or that may be brought against Xxxxxx by
reason of the fact that he was an officer or employee of the Company and certain
Company affiliates; and (ii) shall be entitled to directors and officers
insurance coverage on the same terms and conditions as any former officer of the
Company.
5. RELEASE.
(a) Release by Xxxxxx. Xxxxxx acknowledges and agrees that the payments
pursuant to Section 3 above, and the provision of other benefits, as set forth
in Section 4 above, constitute
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sufficient consideration for the release of the Company by Xxxxxx provided
below. For the consideration detailed above, and except for (i) any criminal act
or act of willful misconduct by the Company with respect to Xxxxxx, (ii) the
obligations of the Company in this Agreement and the benefits preserved and/or
provided to Xxxxxx in this Agreement and (iii) any obligation which the Company
has under and in accordance with its By-Laws as currently in effect (whether or
not covered by insurance) to indemnify Xxxxxx in his capacity as an officer or
employee of the Company or of any of its subsidiaries or affiliates, Xxxxxx, on
behalf of himself and his heirs, executors, administrators, attorneys and
assigns, hereby waives, generally releases and forever discharges the Company,
its subsidiaries, divisions and affiliates, whether direct or indirect
(including its and their respective directors, officers, employees, partners and
agents, past, present, and future), and each of its and their respective
successors and assigns (hereinafter collectively referred to as "Company
Releasees"), from any and all known or unknown actions, causes of action,
claims, damages, suits, obligations, agreements, attorneys' fees or any other
liabilities of any kind whatsoever which have or could be asserted against the
Company Releasees arising out of or related to: his service as an officer or
employee of the Company and/or any of the other Company Releasees, employment
with and/or separation from employment with the Company and or any of the other
Company Releasees, and/or any other occurrence up to and including the date of
this Agreement, including but not limited to claims, actions, causes of action
or liabilities arising under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, as amended ("ADEA"), the
Employee Retirement Income Security Act of 1974, as amended, the Rehabilitation
Act of 1973, as amended, the Americans with Disabilities Act, as amended, the
Illinois Human Rights Act, as amended, and/or any other federal, state, or
municipal employment discrimination statutes (including, but not limited to,
claims based on age, sex attainment of benefit plan rights, race, religion,
national origin, marital status, sexual orientation, ancestry, harassment,
parental status, handicap, disability, retaliation, and veteran status).
Xxxxxx agrees that he will not commence any action or proceeding of any nature
whatsoever, and that he will not seek or be entitled to any award of equitable
or monetary relief in any action or proceeding brought on his behalf, that
arises out of the matters released by Xxxxxx under this Agreement.
(b) Release by the Company. Except for (i) any criminal act or act of
willful misconduct by Xxxxxx and (ii) the obligations of Xxxxxx in this
Agreement, the Company, on behalf of itself, its affiliates and each of its and
their respective attorneys and assigns, hereby waives, generally releases and
forever discharges Xxxxxx and his successors and assigns (hereinafter
collectively referred to as "Xxxxxx Releasees"), from any and all known or
unknown actions, causes of action, claims, damages, suits, obligations,
agreements, attorneys' fees or any other liabilities of any kind whatsoever
which have or could be asserted against the Xxxxxx Releasees arising out of or
related to: Xxxxxx'x service as an officer or employee of the Company and/or any
of the other Company Releasees, employment with and/or separation from
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employment with the Company and or any of the other Company Releasees, and/or
any other occurrence up to and including the date of this Agreement. The Company
agrees that it will not commence any action or proceeding of any nature
whatsoever, and that it will not seek or be entitled to any award of equitable
or monetary relief in any action or proceeding brought on its behalf, that
arises out of the matters released by the Company under this Agreement.
6. COVENANTS.
(a) Nondisclosure. At all times hereafter, Xxxxxx will maintain the
confidentiality of all information in whatever form concerning the Company or
any of its affiliates or subsidiaries relating to its or their businesses,
customers, finances, strategic or other plans, marketing, employees, trade
practices, trade secrets, know-how or other matters (other than information
which is generally known outside the Company or which becomes generally known
other than as a result of any improper act or omission by Xxxxxx), and Xxxxxx
will not, directly or indirectly, make any disclosure thereof to anyone, or make
any use thereof, on his own behalf or on behalf of any third party, unless
specifically requested by or agreed to in writing by an executive officer of the
Company. Xxxxxx has returned or will return on or prior to December 31, 2005 to
the Company all reports, files, memoranda, records and software, credit cards,
cardkey passes, door and file keys, computer access codes or disks and
instructional manuals, lap top computer and other physical or personal property
which he received or prepared or helped prepare in connection with his
employment with the Company, its subsidiaries and affiliates, and Xxxxxx has not
retained and will not retain any copies, duplicates, reproductions or excerpts
thereof. Xxxxxx agrees to take all necessary actions, if required by and at the
cost of the Company, to vest such property rights in the Company.
(b) Non-Interference; etc. From the date hereof until June 30, 2007, Xxxxxx
agrees that he will not directly or indirectly interfere with the Company's
relationship with, or endeavor to entice away from the Company, any person,
firm, corporation, or other business
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organization who or which at any time (whether before or during the period
between the date hereof and June 30, 2007) was a customer, officer, employee or
supplier of, or maintained a business or contractual relationship with, the
Company or any of its affiliates or their predecessors. Xxxxxx further agrees
that from the date hereof until June 30, 2007, he will not, directly or
indirectly, (i) solicit or induce any officer or employee of the Company or any
of its subsidiaries to leave the employment of the Company or any of its
subsidiaries, (ii) take any action which would interfere with contractual or
other relationships of the Company or any of its affiliates with customers,
suppliers, employees, governmental agencies, regulators, or others, any action
which disparages or diminishes the reputation of the Company or any of its
affiliates, or any action which diverts customers or potential customers of the
Company or any of its affiliates or otherwise adversely affects their business
or (iii) subsequent to December 31, 2005, initiate or participate in discussions
of Company business matters with directors, officers or employees of the Company
or its affiliates other than at the request of an executive officer of the
Company.
(c) Cooperation. From the date hereof until June 30, 2007, Xxxxxx agrees
that at the request of an executive officer of the Company and upon reasonable
notice he shall provide thorough and accurate information and testimony
voluntarily to or on behalf of the Company or any of its subsidiaries or
affiliates, regarding any claim, action, proceeding or investigation
("Proceeding") by or against the Company or any of its subsidiaries or
affiliates by any third party or by any governmental agency, but he agrees not
to disclose or to discuss with anyone who is not directing or assisting in any
Proceeding, other than his attorney, the fact of or the subject matter of any
Proceeding, except as required by law. The parties agree that any information
and testimony provided by Xxxxxx in accordance with this Section 6(c) in good
faith and based on his honest belief that such information or testimony is
materially accurate shall not be deemed to violate any provision of this
Agreement. The Company will reimburse Xxxxxx for
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reasonable out-of-pocket expenses (including, without limitation, travel,
telephone and facsimile, courier expenses and reasonable fees and expenses of
counsel) reasonably incurred in complying with this Section 6(c).
7. CONFIDENTIALITY. The Company shall issue a press release regarding
Xxxxxx'x separation in the form attached hereto as Exhibit A. Except as required
by applicable law, this Agreement and all of the terms, conditions and
provisions hereof shall be kept strictly confidential by the Company and Xxxxxx,
except that: (i) Xxxxxx may disclose the terms, conditions and provisions of
this Agreement to his spouse, his personal legal counsel and financial and tax
advisors and appropriate taxing authorities, provided that each of such persons
(other than taxing authorities) to whom disclosure is made consents in writing
to preserve the confidentiality of the disclosure as provided herein prior to
such disclosure, or as required by applicable law; and (ii) the Company may (a)
file this Agreement with the Securities and Exchange Commission (the "SEC"), and
(b) disclose or describe the existence and terms of this Agreement in any
document filed with the SEC or in the Company's annual or quarterly reports to
shareholders. The Company agrees that it shall not make any disparaging or
negative comment to any other person or entity regarding Xxxxxx or the
circumstances surrounding Xxxxxx'x resignation from the Company or any of its
affiliates. Xxxxxx agrees not to make any disparaging or negative comment to any
other person or entity regarding (a) the Company or any of its affiliates, (b)
any of the owners, directors, officers, stockholders, members, employees,
attorneys or agents of the Company or any of its affiliates, (c) the working
conditions at the Company or any of its affiliates, or (d) the circumstances
surrounding Xxxxxx'x resignation from the Company or any of its affiliates.
8. VOLUNTARY AGREEMENT, LEGAL CONSULTATION, REVOCATION, ETC. Xxxxxx agrees
and acknowledges: (a) that his waiver of rights under this Agreement is
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knowing and voluntary; (b) this Agreement complies in full with all of the
requirements of the Older Workers Benefits Protection Act; (c) that he
understands the terms of this Agreement, including that the release in Section 5
is a general release; (d) that the payments listed in Section 3 and the other
considerations set forth in Section 4 exceed the amount and benefits that would
normally be received by an employee or officer who resigns or is terminated by
the Company; and (e) that he has been advised by the Company to consult with an
attorney prior to executing this Agreement and has done so. Xxxxxx shall have
twenty-one (21) days to consider the waiver of his rights under the ADEA and if
he has signed this Agreement within such 21-day period, Xxxxxx shall have seven
(7) days from the date of execution to revoke his consent to the waiver of his
rights under the ADEA. If no such revocation occurs, Xxxxxx'x waiver of rights
under the ADEA shall become effective seven (7) days from the date of execution
by the parties. In the event that Xxxxxx revokes his waiver of rights under the
ADEA, the Company shall not be obligated to make the payments set forth in
Section 3 or to pay or provide the other benefits set forth in this Agreement,
and all provisions of this Agreement shall immediately become void and of no
effect and any benefits previously paid to Xxxxxx pursuant to this Agreement
prior to the date of such revocation shall be immediately repaid to the Company.
9. NO ADMISSION OF FAULT. All parties to this Agreement agree and
acknowledge that the considerations exchanged herein do not constitute and shall
not be interpreted as any admission of fault on the part of any party.
10. ENTIRE AGREEMENT; COUNTERPARTS. Other than as stated herein, Xxxxxx
warrants that no promises or inducements have been offered for this Agreement
other than as set forth herein and that this Agreement is executed without
reliance upon any other promises or representations. This Agreement contains the
entire understanding of the parties and shall not be modified except in writing
signed by the parties hereto. This Agreement supersedes
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all prior agreements and understandings concerning the subject matter hereof
including, but not limited to, the Employment Agreement dated January 1, 2003
between the Company and Xxxxxx, which shall have no further force or effect. The
parties may execute this Agreement in counterparts.
11. SEVERABILITY. If any phrase, clause or provision of this Agreement is
declared invalid or unenforceable by a court of competent jurisdiction, such
phrase, clause or provision shall be deemed severed from this Agreement, but
will not affect any other provisions of this Agreement, which shall otherwise
remain in full force and effect. If any restrictions or limitation in this
Agreement is deemed to be unreasonable, onerous and unduly restrictive by a
court of competent jurisdiction, it shall not be stricken in its entirety and
held totally void and unenforceable, but shall remain effective to the maximum
extent permissible within reasonable bounds.
Each party hereto acknowledges and agree that the other party will or would
suffer irreparable injury in the event of a breach or violation or threatened
breach or violation of the provisions set forth in Sections 6 and 7 herein and
each party agrees that, in the event of an actual or threatened breach or
violation of such provisions by such party, the other party shall be awarded
injunctive relief in a court of appropriate jurisdiction to prohibit or remedy
any such violation or breach or threatened violation or breach, without the
necessity of posting any bond or security, and such right to injunctive relief
shall be in addition to any other right or remedy available to such other party.
12. WAIVER. The waiver by the Company or Xxxxxx of any breach of any term
or condition of this Agreement shall not be deemed to constitute the waiver of
any other breach of the same or any other term or condition hereof.
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13. GOVERNING LAW. This Agreement and the enforcement thereof shall be
governed and controlled in all respects by the laws of the State of Illinois,
without giving effect to its conflicts of law provisions.
14. NOTICE. Any notice to be given hereunder shall be in writing and shall
be deemed given when mailed by certified mail, return receipt requested,
addressed as follows:
To Xxxxxx at:
000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx and Xxxxxx LLP
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
To the Company at:
Salton, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
with a copy to
Xxxx Xxxxxxxxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-00000
15. NEUTRAL CONSTRUCTION. The parties have negotiated this Agreement and
all of the terms and conditions contained in this Agreement in good faith and at
arm's length, and each party has been represented by counsel during such
negotiations. No term, condition, or provision contained in this Agreement will
be construed against any party or in favor of any party (i) because such party
or such party's counsel drafted, revised, commented upon, or did not comment
upon, such term, condition, or provision; or (ii) because of any presumption as
to any inequality of bargaining power between or among the parties. Furthermore,
all terms, conditions, and provisions contained in this Agreement will be
construed and interpreted in a
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manner which is consistent with all other terms, conditions, and provisions
contained in this Agreement.
16. ATTORNEYS' FEES. In the event that a legal action is brought to enforce
the terms of this Agreement, the prevailing party shall be entitled to recover
its costs of court, including all reasonable attorney fees at all trial and
appellate levels.
17. BINDING NATURE. This Agreement shall be binding upon the heirs,
representatives, transferees, successors and assigns of the parties, including
any entity with which the Company may merge or consolidate or to which it may
transfer all or substantially all of its assets.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
XXXXX X. XXXXXX SALTON, INC.
By:
------------------------------------- ------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman
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EXHIBIT A
SALTON ANNOUNCES RESIGNATION OF XXXXX X. XXXXXX
LAKE FOREST, Ill.--December 5, 2005--Salton, Inc. (NYSE:SFP) announced today
that Xxxxx X. Xxxxxx has resigned his position as Executive Vice President,
Chief Administrative Officer and Senior Financial Officer of the Company to
pursue other interests.
Xx. Xxxxxxxx Xxxxxxxx, Chief Executive Officer, commented: "On behalf of Salton,
we would like to express our thanks to Xxxx Xxxxxx for his efforts on behalf of
the Company. These efforts have included building our financial organization and
assisting the Company through its recent restructuring activities. We wish Xxxxx
the best of luck in his future endeavors."
The Company also announced that Xxxxxxx X. Xxxx, the Company's current Vice
President-Finance has been promoted to Chief Financial Officer.
"Xxxx Xxxx is a highly qualified accounting executive who has managed our
day-to-day accounting functions for several years. Xx. Xxxx will assume the
accounting and finance responsibilities of Xx. Xxxxxx'x position. Xx. Xxxxxxx X.
Xxx, the Company's President and Chief Operating Officer, will assume the
remaining responsibilities of Xx. Xxxxxx'x position," stated Xx. Xxxxxxxx.
ABOUT SALTON, INC.
Salton, Inc. is a leading designer, marketer and distributor of branded,
high-quality small appliances, electronics, home decor and personal care
products. Its product mix includes a broad range of small kitchen and home
appliances, electronics for the home, tabletop products, time products, lighting
products, picture frames and personal care and wellness products. The company
sells its products under a portfolio of well recognized brand names such as
Salton(R), Xxxxxx Xxxxxxx(R), Westinghouse (TM), Toastmaster(R), Melitta(R),
Xxxxxxx Xxxxx(R), Farberware(R), Xxxxxxxx(R) and Stiffel(R). It believes its
strong market position results from its well-Known brand names, high-quality and
innovative products, strong relationships with its customer base and its focused
outsourcing strategy.
