AGREEMENT AND GENERAL RELEASE
Exhibit 10.1
AGREEMENT AND
GENERAL RELEASE
GENERAL RELEASE
This Agreement and General Release (the “Agreement”), made as of the 28th day of February
2006, by and between Xxxxx, Ruger & Co., Inc., a Delaware corporation with an address at Xxx Xxxxx
Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 (the “Company”), and Xxxxxxx X. Xxxxx, Xx., an individual with
a residence at 0 Xxxxxxx Xxxxx Xxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000 (“Employee”);
W I T N E S S E T H:
WHEREAS, Employee is employed by the Company as its Chief Executive Officer; and
WHEREAS, the Company and Employee have agreed that Employee will voluntarily resign from all
offices and other positions he currently holds with the Company;
NOW THEREFORE, in consideration of the covenants and conditions set forth herein, the parties,
intending to be legally bound, agree as follows:
1. Employment Status. Employee hereby voluntarily resigns, and the Company hereby
accepts his resignation, as Chief Executive Officer and an employee of the Company, in each case
effective as of February 28, 2006 (the “Separation Date”).
2. Separation Arrangements.
(a) In consideration of the performance by Employee of the obligations of Employee herein, the
Company agrees to pay to Employee $729,020.80, less applicable withholdings for federal, state and
local taxes. Such amount, which represents severance and the value of all of Employee’s accrued
but unused vacation time (plus interest at the rate of 4.75% per annum on the
portion to be paid on September 1, 2006), shall be paid by wire transfers to an account designated
in writing by Employee for such purpose in periodic installments as follows: (i) on September 1,
2006 the Company will pay $262,354.13, less
applicable withholdings for federal, state and local taxes, and (ii) on the first business day
of each month thereafter through November 1, 2007 the Company will pay $33,333.33, less applicable
withholdings for federal, state and local taxes. In January 2007 the Company will issue to
Employee a form W-2 reflecting the payment of the amounts described in this Paragraph 3(a) in
calendar year 2006 and in January 2008 the Company will issue to Employee a form W-2 reflecting the
payment of the amounts described in this Paragraph 2(a) in calendar year 2007.
(b) Employee’s participation in the Company’s group health insurance coverage shall continue
after the Separation Date under the same terms and conditions applicable to such coverage
immediately prior to the Separation Date and shall terminate as of November 30, 2007. At that
time, Employee shall be entitled to elect to continue to receive such group health insurance
coverage, at his own expense, by so electing in accordance with the Consolidated Omnibus Budget
Reconciliation Act of 1986.
(c) (i) From and after the Separation Date, Employee shall be entitled to receive his vested
benefits as of the Separation Date under the Salaried Employees’ Profit Sharing Plan of the Company
and the Salaried Employees’ Retirement Income Plan of the Company (the “Qualified Plans”), in
accordance with and subject to the terms and conditions of the Qualified Plans.
(ii) From and after the Separation Date, Employee shall be entitled to receive his vested
benefits as of the Separation Date under the Supplemental Executive Profit Sharing Plan of the
Company, in accordance with and subject to the terms and conditions of such plan and such benefits
shall be paid before March 15, 2006. In addition, from and after September 1, 2006, Employee shall
be entitled to receive his vested benefits as of the Separation Date under the Supplemental
Executive Retirement Plan of the Company (the “SERP,” and together with the Supplemental Executive
Profit Sharing Plan of the Company, the
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“Nonqualified Plans”), in accordance with and subject to the terms and conditions of the SERP.
Notwithstanding the foregoing, to the extent that Employee was otherwise entitled to receive any
payments under the SERP during the period from the Separation Date through August 31, 2006 (the
“Waiting Period”) in accordance with the terms of the SERP, Employee shall receive a lump sum
payment promptly after September 1, 2006 in an amount equal to the total amount of payments that
Employee otherwise would have received under the SERP during the Waiting Period in accordance with
the terms thereof.
(d) In the same manner and to the same extent as immediately prior to the Separation Date, and
to the maximum extent permitted by applicable law, the Company will indemnify and hold Employee
harmless from and against all third party claims, damages, fines, penalties, deficiencies, losses
and expenses (including, without limitation, interest, court costs, reasonable attorneys’ fees and
reasonable experts’ fees) with respect to any threatened, pending or completed action, suit,
arbitration or other proceeding, whether civil, criminal, administrative, investigative or
otherwise, which arises out of or relates to Employee’s performance of his duties and
responsibilities as an officer and/or director of the Company (“Third Party Claims”). If a Third
Party Claim is made against Employee, the Company will be entitled to participate in the defense
thereof and, if it chooses, to assume the defense thereof at its own cost and expense with counsel
selected by the Company. If the Company elects to assume the defense of a Third Party Claim: (i)
the Company will not be liable to the Employee for any legal expenses subsequently incurred by him
in connection with the defense thereof; (ii) Employee shall cooperate in the defense thereof; (iii)
the Company shall not agree to any settlement, compromise or discharge of such Third Party Claim
without the prior written consent of Employee unless such settlement, compromise or discharge
provides solely for monetary relief to be paid by the Company and the full and complete release of
Employee is the result thereof; and (iv) Employee shall not admit
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liability with respect to, or settle, compromise or discharge such Third Party Claim without
the Company’s prior written consent. Employee’s right to be indemnified and held harmless
hereunder will not be deemed exclusive of any other rights or remedies to which he may be entitled
as a matter of law, or of any other rights of indemnity arising under any policy of insurance
carried by Employee, the Company or any other person or entity.
(e) The Company will process and promptly pay all reasonable and customary business expenses
incurred by Employee through February 28, 2006 and submitted by him for payment not later than
March 14, 2006 in accordance with the Company’s ordinary expense payment procedures.
(f) Employee acknowledges and agrees that Employee is not entitled to and will not be entitled
to any compensation or benefits of any kind or description from the Company or as a result of his
employment by the Company other than as set forth herein or as described herein in the case of the
benefits to be provided under each of the plans described in Section 2(c) above.
3. Releases.
(a) In consideration of the Company’s obligations herein, Employee, on behalf of Employee and
Employee’s heirs, successors, administrators and assigns (in their capacities as such) (the
“Employee Parties”), releases and forever discharges the Company and any and all of its current and
former directors, officers, employees, agents, stockholders, administrators, representatives,
attorneys, insurers, fiduciaries, successors and assigns (in their capacities as such) (the
“Company Parties”) from any and all manner of actions and causes of action, suits, debts, dues,
accounts, bonds, covenants, contracts, agreements, judgments, charges, claims, and demands
whatsoever which the Employee Parties, or any of them, have, or may hereafter have, against the
Company Parties, or any of them, arising out of or by reason of any
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cause, matter or thing whatsoever occurring up to the Separation Date, including, without
limitation, any and all matters relating to Employee’s employment by the Company and the
termination thereof, including, but not limited to, any claims for employment discrimination on the
basis of age, sex, race, national origin, disability or any other protected class and any claims
for wages, salary, bonuses, severance pay or benefits of any kind or nature and any and all matters
arising under any federal, state or local statute, rule or regulation or principle of contract law
or common law, including, but not limited to, claims arising under the Age Discrimination in
Employment Act of 1967, as amended, the Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1001 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et seq., the Americans with Xxxxxxxxxxxx Xxx, 00 X.X.X. § 00000 et
seq., the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.,
and N.H.R.S.A. §354-A, all as amended. If any applicable law, regulation or rule prohibits a
waiver of any such claim(s), Employee hereby represents and warrants that he has no such valid
claim(s). Notwithstanding the foregoing, nothing contained herein shall constitute a release of
(i) Employee’s benefits that are vested as of the Separation Date pursuant to the Qualified Plans
and the Nonqualified Plans, (ii) claims arising under this Agreement or (iii) claims for
indemnification or contribution.
(b) In consideration of Employee’s obligations herein, the Company on behalf of the Company
Parties releases and forever discharges the Employee Parties from any and all manner of actions and
causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments,
charges, claims, and demands whatsoever which the Company Parties, or any of them, have, or may
hereafter have against the Employee Parties, or any of them, arising out of or by reason of any
cause, matter or thing whatsoever occurring up to the Separation Date.
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(c) Each of the parties understands that it or he is releasing claims that it or he may not
know about, which is its or his knowing and voluntary intent, even though it or he recognizes that
someday it or he might learn that some or all of the facts it or he currently believes to be true
are untrue and even though it or he might then regret having signed this Agreement. Nevertheless,
the parties each expressly assume that risk and agree that this Agreement will remain effective in
all respects in any such case. Each party expressly waives all rights it or he might have under
any law that is intended to protect it or him from waiving unknown claims, and it or he understands
the significance of doing so. It is the express intent of the parties that this Agreement resolves
all outstanding issues and/or claims between them, except as otherwise expressly provided herein.
(d) The Company hereby advises Employee: (a) that he should consult an attorney regarding the
Agreement, (b) that he has twenty-one (21) days from the date of his receipt of the Agreement to
consider whether he wants to sign it and that he may not sign the Agreement before the Separation
Date and (c) if he does sign the Agreement, he will have seven (7) days from the date he signs it
to revoke his acceptance of its terms. At the conclusion of that seven (7) day period, the
Agreement will become effective.
4. No Claims. Employee represents and warrants that Employee has not filed any
charges, claims or complaints with any governmental agency or court against the Company Parties.
The Company represents and warrants that it has not filed any charges, claims or complaints with
any governmental agency or court against Employee.
5. Confidential Information. Employee acknowledges that during Employee’s employment
by the Company Employee has had access to and possession of non-public and/or proprietary
information and materials concerning the Company, including, but not limited to, information
concerning the Company’s operations, systems, services, personnel,
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marketing, financial affairs, strategies and techniques, structure, products, product
development and technology (“Confidential Information and Materials”). Confidential Information
and Materials shall not include (i) information that is publicly known as of the Separation Date or
(ii) information that becomes publicly known after the Separation Date without the fault of
Employee. Employee agrees that Confidential Information and Materials are the exclusive property
of the Company and that Employee will keep all Confidential Information and Materials confidential
and will not, without the prior written consent of the President of the Company, disclose or
otherwise make available any Confidential Information and Materials to any third person other than
as required by applicable law or legal process or as may be necessary or appropriate in connection
with Employee’s carrying out his duties or enforcing his rights under this Agreement. Except as
provided in the preceding sentence, Employee further agrees that Employee will not use any
Confidential Information and Materials for Employee’s personal benefit or for the benefit of any
third person or entity without the prior written consent of the President of the Company.
6. Company Property. Not later than April 3, 2006 Employee shall have (i) returned
all Confidential Information and Materials and all property of the Company in Employee’s possession
or custody, including, but not limited to, credit cards, security key cards, telephone cards, car
service cards, Company identification cards, cellular phones, computer equipment, firearms and all
original and copies of the Company’s records, correspondence, books, manuals and handbooks, (ii)
completed his review of the inventory of the firearms in the possession or control of the estate of
Xxxxxxx X. Xxxxx, Xx., which is attached as Exhibit A, to determine, in conjunction with
the Company’s personnel, which of such firearms are owned by the Company, and returned such Company
firearms to the Company and (iii) vacated all office space currently provided to him by the Company
and removed all of his personal property from
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the Company’s premises. Prior to April 3, 2006, the President of the Company will also
review, in conjunction with Employee, whether any firearms in the possession or control of the
Company are owned by the estate of Xxxxxxx X. Xxxxx, Xx. or Employee and shall return to Employee
any of such firearms that the President of the Company reasonably determines are owned by the
estate of Xxxxxxx X. Xxxxx, Xx. or by Employee. The Company shall provide Employee with reasonable
access to Company locations to permit Employee to identify and remove his personal property
(including, but not limited to, any firearms described in the immediately preceding sentence).
Anything to the contrary notwithstanding, nothing in this Section 6 shall prevent Employee from
retaining a home computer and security system, papers and other materials of a personal nature,
including personal diaries, calendars and rolodexes, information relating to Employee’s
compensation or relating to reimbursement of expenses, information that Employee reasonably
believes may be needed for tax purposes or to enforce this Agreement and copies of plans, programs
and agreements relating to Employee’s employment. Employee also represents and warrants that
Employee has no debts to the Company.
7. Non-Disparagement. Employee agrees that Employee will not intentionally publish or
communicate to any person or entity any Disparaging remarks, comments or statements concerning the
Company Parties. “Disparaging” remarks, comments or statements are those that impugn the
character, honesty, integrity or morality or business acumen or abilities of the individual or
entity being disparaged. The Company agrees that neither it nor its directors and executive
officers will intentionally publish or communicate to any person or entity any Disparaging remarks,
comments or statements concerning Employee. Notwithstanding the foregoing, nothing contained in
this Paragraph 7 shall be deemed to prevent Employee, on the one hand, or the directors and
executive officers of the Company, on the other hand, from providing truthful testimony in response
to any subpoena, court order or other
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process of a valid governmental authority or seeking to enforce the Company’s or Employee’s
rights under this Agreement.
8. Tax Matters. The Company and Employee intend that this Agreement complies with the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations
and other guidance of general applicability that are issued thereunder (“Section 409A”). The
Company and Employee agree to negotiate in good faith regarding any amendments to this Agreement
that may be necessary or desirable to comply with Section 409A.
9. Cooperation in Legal Proceedings.
(a) Employee agrees to make himself reasonably available at the Company’s main offices or at
such other locations as the Company and Employee may reasonably agree, following reasonable prior
notice from the Company, to provide reasonable assistance to the General Counsel and external
counsel of the Company in the defense of the Company in connection with any actual or threatened
legal proceeding that relates to or arises from activities or events that occurred during the
period of Employee’s employment by the Company, including, but not limited to, the litigation
commenced by Xxxxxxx Xxxxxx against the Company; provided that such assistance will be limited to
matters involving Employee’s personal knowledge of the underlying facts. The Company agrees to
reimburse Employee for any reasonable out-of-pocket expenses incurred by him in providing such
assistance.
(b) Employee hereby waives the right voluntarily to assist, and will not provide voluntary
assistance to, individuals or entities with claims or defenses adverse to the Company Parties. If
Employee is compelled, pursuant to a subpoena, court order or other process of a valid governmental
authority, to provide information or discovery to other individuals or entities who are adverse to
the Company Parties, he may do so only after giving
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the Company the best notice possible under all of the circumstances, and preferably at least
ten (10) days advance written notice, of (i) any proceeding at which a court order regarding
Employee’s testimony or assistance is sought, (ii) any subpoena or process requiring or requesting
Employee’s testimony or assistance and (iii) the date on which the testimony or assistance is
proposed or ordered to be made. The purpose of this notice is to allow the Company Parties to
respond thereto and/or seek appropriate relief under this Paragraph. This Paragraph will not
prohibit Employee from assisting in an investigation or proceeding conducted by an agency of the
United States or any state government. Employee nevertheless waives his right to seek or accept
any damages or relief in any proceeding relating to any act or omission covered by the release in
Paragraph 3 of this Agreement. The terms and conditions of this Paragraph are procedural in
nature, not substantive, and are not intended to and shall not operate to limit Employee’s
obligation to provide truthful testimony.
10. Miscellaneous.
(a) Employee acknowledges that the benefits from the Company set forth in Paragraph 2(a) of
this Agreement are benefits he would not be entitled to receive in the absence of this Agreement.
(b) Employee represents and warrants that Employee fully understands the terms of this
Agreement and that Employee knowingly and voluntarily, of Employee’s own free will without any
duress, being fully informed and after due deliberation, accepts its terms and is executing and
delivering this Agreement as Employee’s own free act. Employee further represents and warrants
that, except as set forth herein, no promises or inducements for this Agreement have been made, and
Employee is entering into this Agreement without reliance upon any statement or representation by
any of the Company Parties or any other person concerning any fact material hereto.
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(c) Employee confirms Employee’s understanding that as a result of entering into this
Agreement Employee will not have the right to assert that the Company unlawfully terminated
Employee’s employment or violated any rights in connection with Employee’s employment, including
Employee’s right to assert any claim of unlawful discrimination.
(d) If the Company or Employee brings a lawsuit or files any claim in violation of this
Agreement, Employee or the Company, as the case may be, may xxx for breach of contract and any
other appropriate cause of action and, if successful, will be entitled to recover costs and
attorneys’ fees incurred in connection with the defense of any such proceeding.
11. Remedies. Employee acknowledges that a breach by Employee of Paragraphs 6, 7 or 9
of this Agreement would be material, and would cause irreparable injury and agrees that the rights
and remedies of the Company hereunder may be enforced both at law and in equity, by injunction or
otherwise, without the requirement that the Company post any bond or security. The Company
acknowledges that a breach by the Company of Paragraphs 6 or 7 of this Agreement would be material,
and would cause irreparable injury and agrees that the rights and remedies of Employee hereunder
may be enforced both at law and in equity, by injunction or otherwise, without the requirement that
Employee post any bond or security.
12. Notices. All notices or other communications pursuant to this Agreement shall be
in writing and shall be deemed valid and sufficient if delivered by personal service or overnight
courier or dispatched by registered mail, postage prepaid, in any post office to the parties at the
addresses set forth above. A party hereto may change its address by notice to the other in the
manner set forth above. Notice and other communications rendered as herein provided shall be
deemed to have been given on the day on which personally served or, if sent by
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overnight courier or registered mail, on the second day after being posted, or in either case
the date of actual receipt, whichever date is the earlier.
13. Entire Agreement. This Agreement constitutes the entire agreement between
Employee and the Company with respect to the subject matter hereof and supersedes any and all prior
agreements or understandings between Employee and the Company arising out of or relating to
Employee’s employment and the cessation thereof. This Agreement may only be changed by written
agreement executed by Employee and the Company. To be effective, any waiver of any provision of
this Agreement must be in writing and signed by the party against whom enforcement is sought.
14. Governing Law. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without giving effect to the principles of
conflicts of law thereof.
15. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the same instrument.
16. Headings. The headings in this Agreement are included for convenience of
reference only and shall not affect the interpretation of this Agreement.
17. Reformation and Severability. It is the intent of Employee and the Company that
the provisions of this Agreement be enforced to the fullest extent permitted by law. In case any
provision of this Agreement shall be declared by a court of competent jurisdiction to be invalid,
illegal or unenforceable as written, Employee and the Company agree that the court shall modify and
reform such provision to permit enforcement to the greatest extent permitted by law. In addition,
if any provision of this Agreement shall be declared
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invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement shall in no way be affected or impaired thereby.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
day and year first above written.
| XXXXX, RUGER & CO., INC. | ||||
/s/Xxxxxxx X. Xxxxx, Xx.
|
By: | /s/Xxxxxxx X. Xxxxxxx | ||
Xxxxxxx X. Xxxxx, Xx.
|
Name: Xxxxxxx X. Xxxxxxx | |||
| Title: President & COO | ||||
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