Exhibit 10
RETIREMENT AND RELEASE AGREEMENT
THIS AGREEMENT is effective the 26th day of June, 1999, by and between
Graco Inc., a Minnesota corporation ("Graco"), with its principal offices at
4050 Olson Memorial Highway, Golden Valley, Minnesota, 55422 and Clayton R.
Carter, an individual, residing at 4667 Bayswater Road, Shorewood, MN. 55331
("Mr. Carter").
WHEREAS, Mr. Carter is now employed by Graco; and
WHEREAS, The parties have agreed that Mr. Carter will retire as an officer
and employee of Graco effective June 30, 1999, and will terminate his employment
relationship with Graco in accordance with the terms of this Agreement.
NOW, THEREFORE, It is hereby mutually agreed by and between the parties for
good and valuable consideration as follows:
1. Separation Payment
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On or before July 2, 1999, or two business days after Mr. Carter
executes this Agreement, whichever is later, Graco will pay to Mr.
Carter in a lump sum as a separation payment the amount of two hundred
thousand dollars ($200,000), subject to tax withholding and deductions
required by law.
2. Annual Bonus Plan
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Mr. Carter shall be entitled to payment under the 1999 Corporate and
Business Unit Annual Bonus Plan of one-half of the full year annual
bonus to which he would have been entitled under said plan had he
stayed in the position he held upon retirement until the end of 1999.
Said payment shall be made in 2000 when the payments under said plan
are made to all participants therein.
3. Stock Options
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All stock options granted to Mr. Carter under the Graco Long Term
Incentive Plan shall be governed by the provisions of said plan and
the stock option agreements executed between Graco and Mr. Carter
pursuant to said plan.
4. Benefits
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Mr. Carter's entitlement to, continuation or cessation of retirement
benefits following the date of his retirement are described in a
letter from the Graco Benefits Department to Mr. Carter's attention,
dated March 16, 1999
5. Cooperation
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Mr. Carter 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
Mr. Carter for any reasonable out-of-pocket expenses (including
attorneys' fees, if necessary) incurred by him in connection with
rendering such cooperation.
6. Confidentiality
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a. Mr. Carter hereby agrees that, for a period of three (3) years
after June 30, 1999, 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 any future 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 Mr. Carter, 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, suppliers, marketing,
sales, management practices, technical information, drawings,
specifications, material, and the like, and any knowledge or
information developed by Mr. Carter 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 Mr. Carter, or information which Mr. Carter is
required to disclose in a court or other judicial proceeding or
is otherwise legally required to disclose.
c. The provisions of this Section 6 are in addition to, and not in
lieu of, the fiduciary and other duties and obligations of Mr.
Carter as an employee, officer and director of Graco, and this
Section 6 does not limit said obligations in any way, by time or
otherwise.
7. Release
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a. Except with respect to the provisions of this Agreement and the
provisions of the letter dated March 16, 1999 referenced above,
Mr. Carter 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 Exhibit hereto, or any right or
claim Mr. Carter may have or assert under the common law or any
state, municipal, federal, or other statute 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 Section 7 shall not affect Mr. Carter'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. Mr. Carter certifies, represents and agrees that:
(i) this Agreement is written in a manner that he understands;
(ii) he understands that this Section 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 must provide written notice to the Vice
President, General Counsel and Secretary, delivered in
person or by mail. If his revocation is sent by mail, it
must be postmarked on or before July 15, 1999, properly
addressed to Robert M. Mattison, Vice President, General
Counsel and Secretary, Graco Inc., P.O. Box 1441,
Minneapolis, MN. 55440, and sent by certified mail, return
receipt requested. Mr. Carter understands that Graco will
have no obligation to pay him anything under this Agreement
if he revokes his acceptance within the time limit
specified, and that he will be obligated to immediately
refund to Graco all sums paid to him by Graco pursuant
hereto.
(ix) Mr. Carter expressly agrees that the waiver of his rights
pursuant to the Agreement is knowing and voluntary on his
part.
8. Applicable Law
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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.
9. Entire Agreement
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This Agreement constitutes the entire agreement and understanding
between the parties with respect to the subject matter hereof, and,
except as otherwise specifically provided herein, specifically
supersedes and replaces any and all prior written or oral agreements
or understandings. This Agreement may not be amended except in a
writing signed by authorized representatives of both parties.
10. Headings
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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: /s/James A. Earnshaw
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James A. Earnshaw
President and Chief Executive Officer
CLAYTON R. CARTER
By: /s/Clayton R. Carter
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