Exhibit 10.17
SEPARATION AND
SUPPLEMENTAL RETIREMENT AGREEMENT
THIS AGREEMENT made this 3rd day of January, 1995, by and between
Graco Inc., a Minnesota corporation ("Graco"), and Barry A. Calhoon
("Employee").
WHEREAS, Employee is now employed by Graco; and
WHEREAS, The parties have agreed that Employee will retire as an
employee of Graco effective December 31, 1994, and terminate the employment
relationship between Employee and Graco in accordance with the terms of
this Agreement.
NOW, THEREFORE, It is hereby agreed by and between the parties as
follows:
1. Separation Payments.
Upon execution of this Agreement, Graco will pay to Employee in a
lump sum the amount of one hundred seventy-eight thousand
($178,000) dollars, subject to tax deductions required by law.
2. Supplemental Retirement Payments
a. Pension payments. Beginning January 1, 1995, Graco shall pay
to Employee on the first day of each month the sum of nine
hundred seven ($907.00) dollars. Graco shall make a good
faith effort to deliver this sum to Employee's residence, as
the address may appear in Graco's records, on or before the
last day of the month preceding the due date. Such payments
shall continue until the first day of the month in which
Employee dies.
b. Source of Payments. Benefits due under this Article 2 shall
be paid out of the general funds of Graco, and the Employee
and the Survivor Annuitant shall not have any preferred
interest by way of trust, escrow, lien or otherwise in any
specific assets. The rights accruing to the Employee and
the Survivor Annuitant hereunder shall be solely those of
unsecured creditors of Graco.
c. Nontransferability. The Employee and the Survivor Annuitant
shall not have the right to assign, encumber or otherwise
anticipate the payments to be made under this Article 2, and
the benefits provided hereunder shall not be subject to
seizure for payment of any debts or judgments against the
Employee or the Survivor Annuitant.
d. Making a Claim Payments will be paid to the Employee and
Survivor Annuitant automatically. If the Employee or the
Survivor Annuitant is in disagreement with any determination
that has been made, a claim may be presented in accordance
with the procedure set forth in subparagraph e of this
Article 2.
e. Claims Procedure.
(i). Any claim presented to Graco pursuant to
subparagraph d of this Article must be in writing
and delivered to the Vice President - Human
Resources of Graco. The claimant may, at the
claimant's own expense, have an attorney or other
representative act on behalf of the claimant.
Within 90 days after the claim is delivered, the
claimant will receive either:
(a) a decision ; or
(b) a notice describing special circumstances
requiring a specified amount of additional time
(but no more than 180 days from the day the
claim was delivered) to reach a decision.
(ii). If the claim is wholly or partially denied, the
claimant will receive a written notice specifying:
(a) the reasons for denial;
(b) the provisions of the Agreement on which the
denial is based; and
(c) any additional information needed in connection
with the claim and the reason such information
is needed. Information concerning the
claimant's right to request a review will also
be given to the claimant.
(iii). A claimant may request that a denied claim be
reviewed. The request for review must be in writing
and delivered to the Vice President - Human
Resources of Graco within 60 days after the
claimant's receipt of written notice that the claim
was denied. A request for review may, but is not
required to, include issues and comments the
claimant wants considered in the review. The
claimant may examine pertinent documents by asking
the Vice President - Human Resources of Graco for
permission to do so. Within 60 days after delivery
of a request for review, claimant will receive
either
(a) a decision; or
(b) a notice describing special circumstances
requiring a specified amount of additional time
(but no more than 120 days from the day the
request for review was delivered) to reach a
decision.
(iv). If a claimant does not receive a decision within the
specified time, the claimant should assume the claim
was denied or re-denied on the date the specified
time expired.
(v). The Vice President - Human Resources of Graco will
make all decisions on claims and reviews of denied
claims . The Vice President - Human Resources of
Graco may delegate his authority to make such
decisions and may, in his or her sole discretion,
hold one or more hearings.
3. Long-term Stock Incentive Plan.
a. Graco Executive Long-term Incentive Agreement.
With respect to the grants of restricted stock made to the
Employee pursuant to the Executive Long-term Incentive
Agreement executed by the Employee and Graco on March 1,
1991, the Employee will receive on March 1, 1995, one
thousand eight hundred and eighty-one (1881) shares of Graco
common stock, freely tradeable without further restrictions,
representing the fourth installment of the total shares
granted to the Employee under said Agreement. The fifth and
sixth installments of shares shall not vest in the Employee
and his right to these unvested installments shall be
immediately and irrevocably forfeited on the date of
execution of this Separation and Supplemental Retirement
Agreement. All other terms and conditions of the subject
Incentive Agreement to the extent applicable shall remain in
full force and effect.
b. Non-Incentive Stock Option Agreement.
On December 31, 1994, all Five thousand two hundred ninety-
eight options granted to the Employee pursuant to the Non-
Incentive Stock Option Agreement executed by the Employee
and Graco on May 2, 1994 shall become immediately and fully
exercisable by the Employee and shall remain exercisable by
him until the close of business on December 30, 1997, at
which time all options not previously exercised will expire.
All other terms and conditions of the subject Stock Option
Agreement to the extent applicable shall remain in full
force and effect.
4. Annual Bonus Plan.
The Employee is a participant in the Graco Inc. 1994 Corporate
and Business Unit Annual Bonus Plan and shall be entitled to a
Bonus Payment pursuant to the terms of that Plan, calculated up
to the time of his retirement.
5. Cooperation.
Employee shall render all reasonable cooperation to Graco in
connection with the prosecution or defense of any lawsuit or
other judicial or administrative action, including participating
as a source of information or witness in any such action. Graco
shall reimburse Employee for any reasonable out-of-pocket
expenses (including attorney's fees, if necessary) incurred by
him in connection with rendering such cooperation.
6. Confidentiality
a. Employee hereby agrees that, for a period of five (5) years
after December 31, 1994, he will not, directly or
indirectly, disclose any Confidential Information, as
defined in subsection (b) below, to any other party, and
will not in any way use such Confidential Information in the
course of his employment.
b. As used herein, the term "Confidential Information" shall
mean all information which is treated as confidential or
proprietary by Graco in the normal course of its business,
including, without limitation, documents so marked, or is a
trade secret of Graco, which has been disclosed by Graco to
Employee including, without limitation, information relating
to Graco products, processes, product development or
research, equipment, machinery, apparatus, business
operations, financial results or condition, strategic plans
or projections, customers, employees, suppliers, marketing,
sales, management practices, technical information,
drawings, specifications, material, and the like, and any
knowledge or information developed by Employee relating to
the same, provided, however, that Confidential Information
shall not include information which is, at the time of
disclosure or thereafter becomes, a part of the public
domain through no act or omission by the Employee or
information which the Employee is required to disclose in a
court or other judicial proceeding or is otherwise legally
required to disclose.
c. Employee agrees that all written or otherwise documented,
including, without limitation, by any electronic medium,
Confidential Information and all copies thereof, are and
shall be Graco property exclusively, and the Employee
hereby represents that he has either turned over to Graco
all such documents or destroyed them, and has no documents
or other records, including, without limitation, electronic
records, containing Graco Confidential Information in his
possession or control.
7. Release
a. Except with respect to the provisions of this Agreement and
the provisions of a letter from Susan Boettcher and Debbie
Hill, dated October 17, 1994, describing the benefits to
which Employee shall be entitled upon his retirement, the
Employee hereby releases and forever discharges Graco and
its officers, employees, agents, successors, and assigns
from any and all claims, causes of action, demands, damages,
liability and responsibility whatsoever, arising prior to
the date of this Agreement, including without limitation,
any rights or claims for further compensation, or any rights
to participate in any Company-sponsored program relating to
the purchase or acquisition of any Graco common stock,
preferred stock, or other equity in Graco or any subsidiary
thereof, except as specifically provided in this Agreement,
including the Exhibits hereto, or any right or claim the
Employee may have or assert under the common law or any
state, municipal, federal, or other law or regulation
regarding the rights of employees generally or based on
discrimination on the basis of race, creed, gender, age, or
other protected status. This Article 7 shall not affect the
Employee's rights to indemnification as an officer,
director, and employee of Graco under Graco's By-Laws and
applicable Minnesota law nor any rights which he has accrued
by participating in any Graco benefit plan, subject to the
provisions of this Agreement and the terms and conditions
set forth in such plan as of his retirement date.
b. The Employee certifies, represents and agrees that:
(i). this Agreement is written in a manner that he
understands;
(ii). he understands that this Article 7 specifically
waives any rights or claims he may have arising
under federal, state, and local laws prohibiting
employment discrimination, such as the Age
Discrimination in Employment Act, the Minnesota
Human Rights Act, Title VII of the Civil Rights Act
of 1964, the Rehabilitation Act of 1973, the
Americans with Disabilities Act and/or any claims
for damages or for injuries based on common law
theories of contract, quasi-contract or tort;
(iii). the waiver herein of rights or claims are to those
which may have arisen prior to the execution date
of this Agreement;
(iv). a portion of the consideration set out in this
Agreement is in addition to compensation that he
may already have been entitled to;
(v). he has been specifically advised in writing to
consult with an attorney prior to executing this
Agreement;
(vi). he has been informed that he has a period of at
least twenty-one (21) calendar days within which to
consider this Agreement;
(vii). he specifically understands that he may revoke this
Agreement for a period of at least fifteen (15)
calendar days following his execution of this
Agreement, and that this Agreement is not effective
or enforceable until the fifteen (15) day
revocation period has expired.
(viii). If he decides to revoke this Agreement within said
fifteen (15) day period, he should provide written
notice to the Vice President - Human Resources,
delivered in person or by mail. If his revocation
is sent by mail, it must be postmarked on or before
January 18, 1995, properly addressed to Clyde
Hansen, Vice President - Human Resources, Graco,
Inc., P.O. Box 1441, Minneapolis, MN. 55440, and
sent by certified mail, return receipt requested.
Employee understands that Graco will have no
obligation to pay him anything under this
Agreement, if he revokes his acceptance within the
time limit specified.
(ix). The Employee expressly agrees that the waiver of
his rights pursuant to the Agreement is knowing and
voluntary on his part.
8. Applicability to Successors.
This Agreement shall be binding upon and inure to the benefit of
Graco and the Employee and the Survivor Annuitant, and the
successors and assigns of Graco. If Graco becomes a party to any
merger, consolidation or reorganization, this Agreement shall
remain in full force and effect as an obligation of Graco or its
successors in interest.
9. Amendment.
This Agreement may be amended at any time by mutual agreement of
the parties. The Vice President - Human Resources of Graco may
issue rules implementing this Agreement and will inform the
Employee (or the Survivor Annuitant) of any such rules in the
event same are issued.
10. Applicable Law.
Except to the extent governed by federal law, this Agreement and
any controversies between the parties shall be governed by and
construed in accordance with the laws of the State of Minnesota.
11. Entire Agreement.
This Agreement, including Exhibit A hereto, constitutes the
entire agreement and understanding between the parties with
respect to the subject matter hereof, and, except as otherwise
specifically provided herein or in Exhibit A, specifically
supersedes and replaces any and all prior written or oral
agreements or understandings.
12. Headings.
The headings of the paragraphs herein are included solely for the
convenience of reference and shall not control the meaning or
interpretation of any provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals on the day and year first above written.
GRACO INC.
By
Clyde W. Hansen
Vice President of Human Resources
EMPLOYEE
______________________________
Barry A. Calhoon