AMENDED AND RESTATED SEVERANCE AND CHANGE IN CONTROL AGREEMENT
Exhibit 10.90(a)
AMENDED AND RESTATED
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
AMENDED AND RESTATED SEVERANCE AND CHANGE IN CONTROL AGREEMENT executed December 8, 2011 as of
March 9, 2011, by and between XXXXX & WESSON HOLDING CORPORATION, a Nevada corporation
(“Employer”), and XXXXX XXXXXXXXXX (“Employee”).
WHEREAS, Employee is an executive officer and valued employee of Employer.
WHEREAS, Employer and Employee desire to agree to the results of any termination of Employee’s
employment under certain circumstances.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:
1. Definitions.
(a) “Cause” shall mean any termination of Employee’s employment by Employer as a result of
Employee engaging in an act or acts involving a crime, moral turpitude, fraud, or dishonesty;
Employee taking any action that may be injurious to the business or reputation of Employer; or
Employee willfully violating in a material respect Employer’s Corporate Governance Guidelines, Code
of Conduct, or any applicable Code of Ethics, including, without limitation, the provisions thereof
relating to conflicts of interest or related party transactions.
(b) “Change in Control” of Employer shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934 as in effect on the date of this Agreement or, if Item
6(e) is no longer in effect, any regulations issued by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 that serve similar purposes; provided that, without
limitation, such a Change in Control shall be deemed to have occurred if and when (i) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
directly or indirectly of equity securities of Employer representing 20 percent or more of the
combined voting power of Employer’s then-outstanding equity securities, except that this provision
shall not apply to any person currently owning at least five percent or more of the combined voting
power of Employer’s currently outstanding equity securities or to an acquisition of up to 20
percent of the then-outstanding voting securities that has been approved by at least 75 percent of
the members of the Board of Directors who are not affiliates or associates of such person; (ii)
during the period of this Agreement, individuals who, at the beginning of such period, constituted
the Board of Directors of Employer (the “Original Directors”), cease for any reason to constitute
at least a majority thereof unless the election or nomination for election of each new director was
approved (an “Approved Director”) by the vote of a Board of Directors constituted entirely of
Original Directors and/or Approved Directors; (iii) a tender offer or
exchange offer is made
whereby the effect of such offer is to take over and control Employer, and such offer is consummated for
the equity securities of Employer representing 20 percent or more of the combined voting power of
Employer’s then-outstanding voting securities; (iv) Employer is merged, consolidated, or enters
into a reorganization transaction with another person and, as the result of such merger,
consolidation, or reorganization, less than 75 percent of the outstanding equity securities of the
surviving or resulting person shall then be owned in the aggregate by the former stockholders of
Employer; or (v) Employer transfers substantially all of its assets to another person or entity
that is not a wholly owned subsidiary of Employer. Sales of Employer’s Common Stock beneficially
owned or controlled by Employee shall not be considered in determining whether a Change in Control
has occurred.
2. Result of Termination Other than for Cause. In the event that Employer terminates Employee’s employment with Employer other than for Cause, (a)
Employer shall pay Employee’s base salary for a period of 12 months following the effective date of
such termination, and (b) Employer shall pay to Employee, at the same time as cash incentive
bonuses are paid to Employer’s other executives, a portion of the cash incentive bonus deemed by
Employer’s Compensation Committee in the exercise of its sole discretion to be earned by Employee
pro rata for the period commencing on the first day of the fiscal year for which the cash incentive
bonus is calculated and ending on the effective date of termination. The amounts payable under (a)
above shall be paid on Employer’s regular payroll schedule commencing on the first such payment
date coincident with or following your “separation from service” from Employer within the meaning
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be treated
as a series of separate payments under Treasury Regulations Section 1.409A-2(b)(2)(iii). The
amounts payable under (b) above shall be made by March 15 of the year following the year to which
the bonus applies and would otherwise be earned.
3. Result of Termination Following Change in Control. In the event of a “Change in Control” of Employer, Employee, at Employee’s option and upon
written notice to Employer, may terminate Employee’s employment effective on the date of the notice
with the same force and effect as if such termination were other than for Cause as provided in
Section 2 above, unless (A) the provisions of this Agreement remain in full force and effect as to
Employee and (B) Employee suffers no reduction in Employee’s status, duties, authority, or
compensation following such Change in Control, provided that Employee will be considered to suffer
a reduction in Employee’s status, duties, authority or compensation, only if, after the Change in
Control, (i) Employee is not the president of the perimeter security business conducted by Employer
and its subsidiaries immediately prior to the Change in Control, (ii) such company terminates
Employee or in any material respect reduces Employee’s status, duties, authority, or base
compensation within one year of the Change in Control, or (iii) as a result of such Change in
Control Employee is required to relocate out of Nashville, Tennessee (or surrounding areas).
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4. Competition and Confidential Information.
(a) Interests to be Protected. The parties acknowledge that Employee will perform essential services for Employer, its
subsidiaries, its employees, and its stockholders during the term of Employee’s employment with
Employer. Employee will be exposed to, have access to, and work with, a considerable amount of
Confidential Information (as defined below). The parties also expressly recognize and acknowledge
that the personnel of Employer and its subsidiaries have been trained by, and are valuable to,
Employer and its subsidiaries and that Employer and its subsidiaries will incur substantial
recruiting and training expenses if Employer or its subsidiaries must hire new personnel or retrain
existing personnel to fill vacancies. The parties expressly recognize that it could seriously
impair the goodwill and diminish the value of the business of Employer and its subsidiaries should
Employee compete with Employer or any of its subsidiaries in any manner whatsoever. The parties
acknowledge that this covenant has an extended duration; however, they agree that this covenant is
reasonable and it is necessary for the protection of Employer, its subsidiaries, its stockholders,
and employees. For these and other reasons, and the fact that there are many other employment
opportunities available to Employee if his employment is terminated, the parties are in full and
complete agreement that the following restrictive covenants are fair and reasonable and are entered
into freely, voluntarily, and knowingly. Furthermore, each party was given the opportunity to
consult with independent legal counsel before entering into this Agreement.
(b) Non-Competition.
For the period equal to 12 months after the termination of Employee’s employment with Employer
for any reason, Employee shall not (whether directly or indirectly, as owner, principal, agent,
stockholder, director, officer, manager, employee, partner, participant, or in any other capacity)
engage or become financially interested in any competitive business conducted within the Restricted
Territory (as defined below). As used herein, the term “competitive business” shall mean any
business that sells or provides or attempts to sell or provide products or services the same as or
substantially similar to the products or services sold or provided by Employer or its subsidiaries
during Employee’s employment, and the term “Restricted Territory” shall mean any state or other
geographical area in which Employer or its subsidiaries sells products or provides services during
Employee’s employment.
(c) Non-Solicitation of Employees.
For a period of 24 months after the termination of Employee’s employment with Employer for any
reason, Employee shall not directly or indirectly, for Employee, or on behalf of, or in conjunction
with, any other person, company, partnership, corporation, or governmental entity, solicit for
employment, seek to hire, or hire any person or persons who is employed by or was employed by
Employer or its subsidiaries within 12 months of the termination of Employee’s employment for the
purpose of having any such employee engage in services that are the same as or similar or related
to the services that such employee provided for Employer or any of its subsidiaries.
(d) Confidential Information. Employee shall maintain in strict secrecy all confidential or trade secret information
relating to the business of Employer or its subsidiaries (the “Confidential Information”) obtained
by Employee in the course of Employee’s employment, and Employee shall not, unless first
authorized in writing by Employer, disclose to, or use for Employee’s benefit or for the benefit
of, any person, firm, or entity at any time either during or subsequent to the term of Employee’s
employment, any Confidential Information, except as required in the performance of Employee’s
duties on behalf of Employer. For purposes hereof, Confidential Information shall include without
limitation any materials, trade secrets, knowledge, or information with respect to management,
operational, or investment policies and practices of Employer or its subsidiaries; any business
methods or forms; any names or addresses of customers or data on customers or suppliers; and any
business policies or other information relating to or dealing with the management, operational, or
investment policies or practices of Employer or its subsidiaries.
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(e) Return of Books, Records, Papers, and Equipment.
Upon the termination of Employee’s employment with Employer for any reason, Employee shall
deliver promptly to Employer all files, lists, books, records, manuals, memoranda, drawings, and
specifications; all cost, pricing, and other financial data; all other written or printed materials
and computers, cell phones, PDAs, and other equipment that are the property of Employer or any of
its subsidiaries (and any copies of them); and all other materials that may contain Confidential
Information relating to the business of Employer or any of its subsidiaries, which Employee may
then have in Employee’s possession or control whether prepared by Employee or not.
(f) Disclosure of Information.
Employee shall disclose promptly to Employer, or its nominee, any and all ideas, designs,
processes, and improvements of any kind relating to the business of Employer or any of its
subsidiaries, whether patentable or not, conceived or made by Employee, either alone or jointly
with others, during working hours or otherwise, during the entire period of Employee’s employment
with Employer or within six months thereafter.
(g) Assignment.
Employee hereby assigns to Employer or its nominee, the entire right, title, and interest in
and to all inventions, discoveries, and improvements, whether patentable or not, that Employee may
conceive or make during Employee’s employment with Employer, or within six months thereafter, and
which relate to the business of Employer or any of its subsidiaries.
(h) Equitable Relief.
In the event a violation of any of the restrictions contained in this Section occurs, Employer
shall be entitled to preliminary and permanent injunctive relief as well as damages and an
equitable accounting of all earnings, profits, and other benefits arising from such violation,
which right shall be cumulative and in addition to any other rights or remedies to which Employer
may be entitled. In the event of a violation of any provision of subsection (b), (c), (f), or (g)
of this Section, the period for which those provisions would remain in effect shall be extended for
a period of time equal to that period beginning when such violation commenced and ending when the
activities constituting such violation shall have been finally terminated in good faith.
(i) Restrictions Separable.
If the scope of any provision of this Agreement (whether in this Section 4 or otherwise) is
found by a Court to be too broad to permit enforcement to its full extent, then such provision
shall be enforced to the maximum extent permitted by law. The parties agree that the scope of any
provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement,
so that such provision can be enforced to the maximum extent permitted by law. Each and every
restriction set forth in this Section 4 is independent and severable from the others, and no such
restriction shall be rendered unenforceable by virtue of the fact that, for any reason, any other
or others of them may be unenforceable in whole or in part.
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5. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the
parties hereto; provided that because the obligations of Employee hereunder involve the
performance of personal services, such obligations shall not be delegated by Employee. For
purposes of this Agreement successors and assigns shall include, but not be limited to, any
individual, corporation, trust, partnership, or other entity that acquires a majority of the stock
or assets of Employer by sale, merger, consolidation, liquidation, or other form of transfer.
Employer will require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or assets of Employer
to expressly assume and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken place. Without
limiting the foregoing, unless the context otherwise requires, the term “Employer” includes all
subsidiaries of Employer.
6. Release of Claims and Non-Disparagement.
Employer’s obligations under this Agreement are contingent upon Employee executing (and not
revoking during any applicable revocation period) a valid and enforceable full and unconditional
release of any claims Employee may have against Employer (whether known or unknown) as of the
termination of Employee’s employment. Employer shall present the release to Employee within ten
days of termination, and Employee shall have up to 45 days to consider whether to execute the
release; in the event Employee executes the release, Employee shall have an additional eight
calendar days in which to expressly revoke his execution of the release in writing. In the event
that Employee fails to execute the release within the 45 day-period, or in the event Employee
formally revokes his execution of the release within eight calendar days of his execution of the
release, then this Agreement shall be null and void. Employee shall not be entitled to any
payments or benefits under this Agreement after termination of his employment if he does not
execute the release or if he revokes the release during any statutory revocation period, and to the
extent that Employer has made any payments to Employee prior to Employee’s failure to execute the
release within the 45 day-period or prior to his revocation, then Employee shall immediately
reimburse Employer for any and all such payments. Employer’s obligations and all payments under
this Agreement shall cease if Employee makes any written or oral statement or takes any action that
Employee knows or reasonably should know constitutes an untrue, disparaging, or negative comment
concerning Employer.
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7. Miscellaneous.
(a) Notices.
All notices, requests, demands, and other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given, made, and received (i)
if personally delivered, on the date of delivery, (ii) if by facsimile or e-mail transmission, upon
receipt, (iii) if mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, and addressed as provided below, or (iv) if
by a courier delivery service providing overnight or “next-day” delivery, on the next business day
after deposit with such service addressed as follows:
| (1) | If to Employer: |
||
0000 Xxxxxxxxx Xxxxxx Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 Attention: Chief Executive Officer Phone: (000) 000-0000 Facsimile: (000) 000-0000 E-Mail: XXxxxxx@xxxxx-xxxxxx.xxx |
|||
| (2) | If to Employee: Xxxxx Xxxxxxxxxx 000 Xxxxxxx Xxxxxxx Xxxx Xxxxx 000 Xxxxxxxx, Xxxxxxxxx 00000 Phone: (000) 000-0000 E-Mail: XXxxxxxxxxx@xxxxx-xxxxxx.xxx |
Either party may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this Section 7 for the giving
of notice.
(b) Indulgences; Waivers.
Neither any failure nor any delay on the part of either party to exercise any right, remedy,
power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any other or further exercise
of the same or of any other right, remedy, power, or privilege, nor shall any waiver of any right,
remedy, power, or privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power, or privilege with respect to any other occurrence. No waiver shall be binding
unless executed in writing by the party making the waiver.
(c) Controlling Law.
This Agreement and all questions relating to its validity, interpretation, performance and
enforcement, shall be governed by and construed in accordance with the laws of the state of
Massachusetts, notwithstanding any Massachusetts or other conflict-of-interest provisions to the
contrary. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the state of Massachusetts located in Hampden County and the United States District Court
for the District of Massachusetts for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action, or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court
in any such suit, action, or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE
PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
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(d) Binding Nature of Agreement.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors, and assigns, except that no party may
assign or transfer such party’s rights or obligations under this Agreement without the prior
written consent of the other party.
(e) Execution in Counterpart.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to
be an original as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the signatures of the parties
reflected hereon as the signatories.
(f) Provisions Separable.
The provisions of this Agreement are independent of and separable from each other, and no
provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or in part.
(g) Entire Agreement.
This Agreement contains the entire understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements, and conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of performance and/or usage
of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
(h) No Participation in Severance Plans.
Except as contemplated by this Agreement, Employee acknowledges and agrees that the
compensation and other benefits set forth in this Agreement are and shall be in lieu of any
compensation or other benefits that may otherwise be payable to or on behalf of Employee pursuant
to the terms of any severance pay arrangement of Employer or any affiliate thereof, or any other
similar arrangement of Employer or any affiliates thereof providing for benefits upon involuntary
termination of employment.
(i) Paragraph Headings.
The paragraph headings in this Agreement are for convenience only; they form no part of this
Agreement and shall not affect its interpretation.
(j) Gender.
Words used herein, regardless of the number and gender specifically used, shall be deemed and
construed to include any other number, singular or plural, and any other gender, masculine,
feminine, or neuter, as the context requires.
(k) Number of Days.
In computing the number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays, and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday, or holiday, then the final day shall be deemed to be the next
day that is not a Saturday, Sunday, or holiday.
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(l) Specified Employee. Notwithstanding any provision of this Agreement to the contrary, if
Employee is a “specified employee” as defined in Section 409A of the Code, Employee shall not be
entitled to any payments or benefits the right to which provides for a “deferral of compensation”
within the meaning of Section 409A, and whose payment or provision is triggered by Employee’s
termination of employment (whether such payments or benefits are provided to Employee under this
Agreement or under any other plan, program or arrangement of Employer), until (and any payments or
benefits suspended hereby shall be paid in a lump sum on) the earlier of (i) the date which is the
first business day following the six-month anniversary of Employee’s “separation from service”
(within the meaning of Section 409A of the Code) for any reason other than death or (ii) Employee’s
date of death, and such payments or benefits that, if not for the six-month delay described herein,
would be due and payable prior to such date shall be made or provided to Employee on such date.
Employer shall make the determination as to whether Employee is a “specified employee” in good
faith in accordance with its general procedures adopted in accordance with Section 409A of the Code
and, at the time of Employee’s “separation of service” will notify Employee whether or not he is a
“specified employee.”
(m) Savings Clause. This Agreement is intended to satisfy the requirements of Section 409A of
the Code with respect to amounts subject thereto, and shall be interpreted and construed consistent
with such intent; provided that, notwithstanding the other provisions of this subsection and the
paragraph above entitled, “Specified Employee”, with respect to any right to a payment or benefit
hereunder (or portion thereof) that does not otherwise provide for a “deferral of compensation”
within the meaning of Section 409A of the Code, it is
the intent of the parties that such payment or benefit will not so provide. Furthermore, if
either party notifies the other in writing that, based on the advice of legal counsel, one or more
of the provisions of this Agreement contravenes any regulations or Treasury guidance promulgated
under Section 409A of the Code or causes any amounts to be subject to interest or penalties under
Section 409A of the Code, the parties shall promptly and reasonably consult with each other (and
with their legal counsel), and shall use their reasonable best efforts, to reform the provisions
hereof to (a) maintain to the maximum extent practicable the original intent of the applicable
provisions without violating the provisions of Section 409A of the Code or increasing the costs to
Employer of providing the applicable benefit or payment and (b) to the extent practicable, to avoid
the imposition of any tax, interest or other penalties under Section 409A of the Code upon Employee
or Employer.
(n) Reimbursements. Except as expressly provided otherwise herein, no reimbursement payable
to Employee pursuant to any provisions of this Agreement or pursuant to any plan or arrangement of
Employer shall be paid later than the last day of the calendar year following the calendar year in
which the related expense was incurred, and no such reimbursement during any calendar year shall
affect the amounts eligible for reimbursement in any other calendar year, except, in each case, to
the extent that the right to reimbursement does not provide for a “deferral of compensation” within
the meaning of Section 409A.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first
above written.
| XXXXX & WESSON HOLDING CORPORATION |
||||
| By: | /s/ P. Xxxxx Xxxxxx | |||
| P. Xxxxx Xxxxxx | ||||
| President and Chief Executive Officer | ||||
| /s/ Xxxxx Xxxxxxxxxx | ||||
| Xxxxx Xxxxxxxxxx | ||||
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