SEVERANCE AGREEMENT AND RELEASE
Exhibit
99.1
SEVERANCE
AGREEMENT AND RELEASE
This
Severance Agreement and Release (“Agreement”) is entered into by and between
Xxxxxxx Outdoors Inc. (hereinafter referred to as the “Company”) and Xxxxxx X.
Xxxxxxx (“Employee”). Employee enters into this Agreement on behalf of
himself,
his
spouse, heirs, successors, assigns, executors and representatives of any kind,
if any.
WHEREAS,
Employee’s employment with the Company will terminate May 5, 2006 (“Termination
Date”).
WHEREAS,
the Company will provide Employee with certain additional severance benefits
beyond those to which he would
otherwise be entitled in exchange for the release of any claims that Employee
may have against the Company, specifically including, without limitation, any
claims concerning his employment with the Company or the termination of that
employment, and in exchange for Employee’s other promises contained in this
Agreement.
WHEREAS,
Employee accepts these additional severance benefits in return for a full
release of any claims he might have against the Company and the other promises
contained herein.
THEREFORE,
in consideration of the mutual promises and agreements made herein and the
good
and valuable consideration described herein, the sufficiency of which is hereby
expressly acknowledged, the Company and Employee agree as follows:
1. Non-liability.
Neither
the Company’s signing of this Agreement nor any actions taken by the Company
toward compliance with the terms of this Agreement constitute an admission
by
the Company that it has acted improperly or unlawfully with regard to Employee
or that it has violated any state or federal law.
2. Severance
Benefits.
Subject
to Employee’s strict compliance with the terms of this Agreement, the Company
shall provide severance benefits to Employee in subparagraphs (a), (b) and
(c) as follows:
a. A
severance payment of One Million Dollars ($1,000,000.00) paid semi-monthly
for
12 months from the Termination Date (the “Severance Period”), in twenty-four
(24) equal installments of $41,666.66 each. If Employee commences other
employment during the Severance Period, Employee shall so notify the Company
immediately and in writing, and the Company shall pay any remaining severance
payments to Employee in a lump sum within ten (10) days of receiving
notification from Employee of his commencement of new employment, and the
Severance Period shall be considered to end as of the date Employee commences
other employment. The severance payments shall not be considered to be earnings
for any other compensation/benefit computation which includes but is not limited
to: bonus calculation, 401(k) contributions and company match, or deferred
contributions into the Company’s non-qualified plans.
b. Employee
outplacement services provided by the Xxxxxxxx, Xxxxx &
Xxxxx firm
pursuant to the Company’s standard agreement with same and of a nature and level
chosen
at
the discretion of the Company, to continue until the Employee secures other
employment.
c. Provided
that Employee takes all necessary steps to elect continued group health, dental
and vision care insurance coverage on a timely basis following his May 5, 2006,
separation from employment, the Company will pay Employee's health, dental
and
vision care insurance premium during the Severance Period. Beginning on May
5,
2007, Employee will pay the entire premium, and shall be responsible for making
such payments as instructed by the Company's COBRA administrator. In no event
will the Company continue paying any portion of the premium payments beyond
May
4, 2007, or beyond the time that Employee becomes eligible for group health,
dental or vision care insurance coverage through another employer, whichever
occurs earlier. Employee agrees to notify the Company immediately and in writing
upon becoming eligible for such coverage.
d. Balances
in the Company’s non-qualified plan will paid under customary timing and in
accordance with those plans.
3. Release
of All Claims.
In
consideration for the promises contained in this Agreement, Employee hereby
releases and forever discharges the Company, its subsidiaries, related and
affiliated companies, if any, and its and their past and present directors,
officers, employees, agents, shareholders, insurers, attorneys, assigns and
other representatives of any kind (collectively referred to in this Agreement
as
“Released Parties”) from any and all claims, liabilities or causes of action of
any kind, known or unknown, arising through the date Employee executes this
Agreement, including, but not limited to, any claims, liabilities or causes
of
action arising in connection with Employee’s employment or termination of
employment with the Company, or in any way related to Employee’s relationship
with the Company or any of the Released Parties. Employee hereby releases and
waives any claim or right to further compensation, salary, bonuses, commissions,
benefits, damages, penalties, attorneys’ fees, costs or expenses of any kind
from either the Company or any of the other Released Parties. Further, Employee
agrees to and understands that the unvested phantom restricted shares and
unvested restricted shares shall be cancelled and that there will not be a
deferred profit sharing contribution made in calendar year 2006. Employee
further agrees not to file, pursue or participate in any claims, charges,
actions or proceedings of any kind against any of the Released Parties with
respect to any matter arising out of or in connection with Employee’s employment
with the Company or termination of employment, or in any way related to
Employee’s relationship with the Company or any of the Released Parties (other
than pursuing a claim for unemployment compensation benefits to which Employee
may be entitled, and except in connection with a federal claim of age
discrimination).
This
release specifically includes, but is not limited to, a release of any and
all
claims under state or federal wage payment laws; federal, state and local fair
employment law(s); the Wisconsin Fair Employment Act; Title VII of the Civil
Rights Act of 1964; Section 1981 of the Civil Rights Act of 1866; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967; the Older
Workers Benefit Protection Act of 1990; the Americans with Disabilities Act;
state or federal family and/or medical leave acts; the Consolidated Omnibus
Budget Reconciliation Act of 1985; the Employee Retirement Income Security
Act
of 1974; and any other federal, state or local laws or regulations of any kind,
whether statutory or decisional. This release also includes, but is not limited
to, a release of any and all claims for wrongful termination, tort, breach
of
contract, defamation, misrepresentation, and violation of public policy or
invasion of privacy.
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The
Company similarly releases Employee except for claims related to any negligence
or misconduct. Additionally, and consistent with Company policy regarding
D&O insurance generally and existing insurance policies in effect, the
Company acknowledges and agrees that the Employee shall continue to be subject
to all applicable rights of indemnification relating to his service as an
officer of the Company under the Company’s by-laws and applicable law, and shall
continue to be covered by, and subject to indemnification under the Company’s
director’s and officer’s insurance for all matters relating to or arising out of
his service to the Company, and such rights to indemnification shall be
expressly excluded from the release of claims hereunder.
4. Covenant
Not To Xxx.
Employee represents that he has not brought, and covenants and agrees that
he
will not bring or cause to be brought, any charges, claims, demands, suits
or
actions in any forum, against the Company or any of the Released Parties arising
out of, connected with or related in any way to his dealings with the Company
or
any of the Released Parties that occurred prior to the effective date of this
Agreement, including, without limitation, his employment or the termination
of
that employment (except in connection with a federal claim of age
discrimination); provided, however, that Employee shall not be prevented from
enforcing the terms of this Agreement. In the event that Employee brings an
action to invalidate this Agreement (except in connection with a federal claim
of age discrimination), Employee covenants and agrees that prior to the
commencement of such action, he shall tender back to the Company all
consideration paid to him pursuant to the terms of this Agreement up to the
date
such action is instituted. Employee acknowledges and understands that all
non-vested Company benefits provided under this Agreement will also cease as
of
the date such action is instituted and that no further consideration or benefits
will be provided by the Company during the pendency of such action.
5. Confidentiality.
Employee acknowledges that during the course of his employment with the Company,
he has been entrusted with certain personnel, legal, business, financial,
technical, sales, marketing, customer and other proprietary information and
materials which are the property of the Company and which involve confidential
information concerning the Company’s business, products, dealings, strategies,
plans and employees (hereinafter “Confidential Information”). Employee agrees
that he will not communicate or disclose to any third party, or use for his
own
account or benefit or for the benefit of any other person or entity, without
the
prior written consent of the Company, any such Confidential Information, in
any
geographic territory in which such use or disclosure could harm the Company's
existing or potential business interests, except as required by law, unless
and
until (i) such information or material becomes generally available to the
public through no fault of Employee; (ii) such time as the Confidential
Information no longer provides a benefit to the Company, or (iii) two (2)
years after the Terminate Date. In the event the disclosure of such information
is required by law, Employee agrees that he will give immediate written notice
to the Company so as to enable it to seek an appropriate protective order.
This
confidentiality obligation is undertaken in addition to, and does not supplant,
Employee’s other confidentiality obligations to the Company, for example,
pursuant to the Management Employee Agreement, pursuant to the Company’s
policies, and/or pursuant to statutory and common law, all of which survive
and
remain in full force and effect.
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6. Non-competition. For a period of one (1) year from
the Termination Date, Employee promises that he shall not provide any services
as employee, independent contractor, consultant or in any other capacity,
substantially similar to those services which Employee performed for the
Company during the two (2) years before the Termination Date, in any geographic
territory in which such performance could harm the Company's existing or
potential business interests, to any Company Competitor. A “Company Competitor”
is any person or entity which is (or is about to be) engaged in any business
in
North America, Europe, Asia or Australia which is substantially similar to
or
will in any material respect compete with any portion of the business of
the
Company (including its operating subsidiaries and affiliates), in which
Employee’s knowledge and information, including Confidential Information, about
Company business would reasonably be considered to be useful. This covenant
only
prohibits the provision of services by Employee that are intended or reasonably
likely to assist the Company Competitor in the sale of a product in competition
with the Company. This non-compete obligation is undertaken in addition to,
and
does not supplant, Employee’s other non-compete obligations to the Company, for
example, all such obligations arising from the Management Employee Agreement,
all of which shall survive and remain in full force and effect. If the Employee
violates this non-competition provision, he shall repay to the Company the
benefits received pursuant to this Agreement described in paragraph 2(a),
(b)
and (c) above, and shall be required to reimburse the Company for all of
its
costs, including attorneys’ fees, incurred in attempting to enforce this
Agreement.
7. Notice of Employment/Agreement. For a period of one
(1) year from the Termination Date, Employee shall notify the Company, prior
to
accepting employment or other engagement, of the identity of the new employer
or
contracting party and the nature of the proposed employment duties or services.
Such notice must be in writing and must be faxed and mailed to the Company’s
Vice President - Human Resources. If the Company reasonably and in good faith
believes that any such prospective employer or contracting party is engaged
in a
business which competes with the Company, the Company may notify such
prospective employer or contracting party of Employee’s non-compete,
confidentiality and non-solicitation obligations. Additionally, during the
severance period, the Employee agrees to not interview with or otherwise solicit
any Company Competitor as defined in paragraph 6 above, without first seeking
the Company’s permission to do so.
8. Non-Solicitation.
For a
period of two (2) years from the Termination Date, Employee agrees that in
addition to his obligations pursuant to the non-solicitation provisions of
the
Xxxxxxx Outdoors Inc. Management Employee Agreement, Employee will not seek
to
employ or enlist the services of any person employed by the Company at anytime
within two (2) years before or after the Termination Date with whom Employee
had
substantial contact during that two (2) year period, and who was ever paid
by
the Company an annual base pay/salary that meets or exceeds forty thousand
U.S.
dollars ($40,000.00) or its equivalent in foreign currency. Nothing in this
Agreement shall otherwise prohibit Employee's future employer from hiring the
Company's employees without Employee's involvement.
9. Return
of Company Property and Information.
a.
Employee
represents that he has returned or will return to the Company
no later than the Termination Date, the originals and all copies of any business
records or documents of any kind belonging to, or related to, the Company,
regardless of the sources from which such records were obtained, together with
all notes, copies and summaries relating thereto. Additionally, Employee shall
return to the Company no later than the Termination Date all keys, security
passes and other means of access to the Company’s offices and other
facilities.
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b. Employee
represents that he shall also promptly return to the Company any and all
computer hardware, equipment and software belonging to the Company, including
any and all program and/or data disks, manuals and all hard copies of Company
information and data, and shall disclose to the Company any and all passwords
utilized by Employee with regard to Company’s computer, hardware and software so
that the Company has immediate, full and complete access to all of the Company’s
data and information stored, used and maintained by Employee, or to which
Employee had access.
10.
Disclosure
of Any Noncompliance.
Employee acknowledges and agrees that it is the Company’s policy, communicated
to him and
other
Employees, that Employees are required to bring to the Company’s attention any
incidents of misconduct or wrongdoing in the area of legal and regulatory
compliance, both governmental and industry, and any other matters as stated
in
the Company’s Code of Conduct. Employee hereby affirms that he has acted in
accordance with such policies and that he has no knowledge of any such incidents
which he has not brought to the attention of the Company in
writing.
11. Assistance.
Employee shall, for a period of 3 years after the date of this Agreement,
provide all reasonable assistance to the Company that may be requested by the
Company for the investigation and/or defense of claims made against the Company
that in any way refer or relate to any of Employee’s areas of responsibility for
the Company. Any reasonable and pre-approved related travel expenses will be
covered by the Company. Additionally, during the Severance Period Employee
shall
provide reasonable assistance as requested by the Company to facilitate a smooth
transition of Employee’s former job duties.
12. Intellectual
Property.
Employee agrees that all ideas, inventions, trade secrets, know-how, documents
and data of any kind developed in connection with or pursuant to his employment
with the Company (hereinafter referred to as “Intellectual Property”), are and
shall remain the exclusive property of the Company. Employee agrees that he
shall cooperate in good faith with the Company, and shall promptly provide
all
assistance reasonably requested by the Company, in relation to the
identification, investigation, assignment, confirmation, preservation or
protection of any of the Intellectual Property. The Company shall reimburse
Employee for any reasonable out-of-pocket expenses incurred by Employee in
response to any such request by the Company, pursuant to the Company’s usual
business expense policies then in effect.
13. Non-disparagement.
Employee shall not disparage, discredit or otherwise refer to the Company or
its
current or former officers, directors or employees in a detrimental or negative
manner. Similarly, Company officers management shall not disparage, discredit
or
otherwise refer to Employee in a detrimental or negative manner. If the Employee
violates this non-disparagement provision, he shall repay to the Company the
benefits received pursuant to this Agreement described in paragraph 2(a), (b)
and (c) above, and shall be required to reimburse the Company for all of its
costs, including attorneys’ fees, incurred attempting to enforce this Agreement.
If the Company violates this non-disparagement provision, it shall be required
to reimburse the Employee for all of his costs, including attorneys’ fees,
incurred attempting to enforce this Agreement.
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14. Confidentiality of this Agreement. Employee agrees
to keep the terms of this Agreement completely confidential, except that
he may
only share the information with his spouse, attorney or tax advisor, if any,
provided they agree in advance to also be bound by this confidentiality
provision. If Employee violates this confidentiality provision, he shall
repay
to the Company the benefits received pursuant to this Agreement described
in
paragraph 2(a), (b) and (c) above, and shall be required to reimburse the
Company for all of its costs, including attorneys’ fees, incurred attempting to
enforce this Agreement.
15. Sole Inducement. In order to induce the Company to
provide him the consideration recited in this Agreement, Employee
voluntarily executes this Agreement, acknowledges that the only consideration
for executing this Agreement is that recited herein, and that no other promise,
inducement, threat, agreement or understanding of any kind has been made by
anyone to cause him to execute this Agreement. The Company advises Employee
understands that he has a right to seek advice of counsel (at his own expense)
regarding this Agreement.
16. Rights
to Consider and Revoke.
Employee hereby acknowledges that the benefits provided for in this Agreement
are greater than those to which he otherwise would be entitled by any contract,
employment policy, or otherwise. Employee further acknowledges that he is
entering into this Agreement voluntarily, that he has had more than twenty-one
(21) days to consider the provisions set forth in this Agreement, or has
voluntarily waived the twenty-one (21) day consideration period upon advice
of
counsel, and that he has been advised to seek advice of counsel regarding this
Agreement prior to signing it. For a period of seven (7) days following his
signing of this Agreement, Employee may revoke this Agreement by doing so in
writing, and this Agreement will not become enforceable or effective until
the
revocation period has expired (e.g.,
none of
the consideration described in paragraph 2(a) will be due or payable before
that time).
17. Effect
of Breach.
In the
event that Employee breaches any of the promises contained in this Agreement,
the Company shall be entitled to immediately terminate, and be relieved of
making, all remaining severance payments and other benefits. Any such
termination, however, shall not relieve Employee of any of the obligations
contained in this Agreement, all of which shall remain in full force and
effect.
18. Attorney’s
Fees.
In the
event that a court of competent jurisdiction determines that Employee breached
this Agreement, in addition to any damages and/or injunctive relief awarded,
Employee shall pay to the Company its costs incurred to enforce the Agreement,
including its reasonable attorney’s fees and other litigation costs incurred in
each and every such action, suit or other proceeding, including any and all
appeals or petitions therefrom. Similarly, if a court of competent jurisdiction
determines that the Company breached this agreement, in addition to any damages
and/or injunctive relief awarded, the Company shall reimburse the Employee
his
costs incurred to enforce the Agreement, including reasonable attorney’s fees
and other litigation costs incurred in each and every such action, suit or
other
proceeding, including any and all appeals or petitions therefrom.
19. Entire
Agreement.
This
Agreement sets forth the entire agreement between the Company and Employee
and
supersedes all prior oral and written agreements between the parties, except
any
prior restrictive covenants which remain binding on the Employee. This Agreement
cannot be amended or modified, except in writing signed by Employee and agent
of
the Company specifically authorized to sign on behalf of the Company in this
matter.
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20. Severability.
If any
portion of this Agreement is found to be unenforceable, all other portions
that
can be separated from it, or appropriately limited in scope, shall remain fully
valid and enforceable.
21. Execution.
This
Agreement, or any amendment hereto, may be signed in any number of counterparts,
including counterparts signed and delivered by fax transmission, each of which
shall be and deemed an original, but all of which taken together shall
constitute one agreement (or amendment as the case may be).
EMPLOYEE
FULLY UNDERSTANDS THE MEANING AND INTENT OF THIS AGREEMENT AND ITS FINAL AND
BINDING EFFECT ON HIM.
IN
WITNESS WHEREOF, EMPLOYEE and the Company, by its duly authorized agent, have
each placed their signatures on the dates indicated below.
|
/s/
Xxxxxx X.
Xxxxxxx
Xxxxxx
X. Xxxxxxx
|
Date:
5/4/06
|
|
By
/s/
Xxxxx X.
Xxxxxx
Xxxxx X. Xxxxxx
Vice President - Human Resources
|
Date:
5/5/06
|
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