SEPARATION AND RELEASE AGREEMENT
THIS AGREEMENT is effective the 10th day of August, 1999, by and between Graco
Inc., a Minnesota corporation ("Graco"), with its principal offices at 4050
Olson Memorial Highway, Golden Valley, Minnesota, 55422, and Roger L King, an
individual, with a residence at 2011 Sugarwoods Drive, Orono, Mn. 55356 ("Mr.
King").
WHEREAS, Mr. King is now employed by Graco; and
WHEREAS, the parties have agreed that Mr. King will cease to be an officer
and employee of Graco effective March 2, 2000 (the "Separation Date"), and will
complete and 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. Duties Prior to Separation
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As of September 1, 1999, Mr. King will end his assignment as Vice
President and General Manager, European Operations, and assume the
title of Vice President. From September 1, 1999, to October 31, 1999,
Mr. King will continue to work at Graco's Maasmechelen, Belgium,
facility assisting in the transition of leadership for the Graco
European Operations. On or before October 31, 1999, the Company shall
repatriate Mr. King in accordance with its standard practice.
After Mr. King is repatriated and until the Separation Date, he shall
not have any specific duties or responsibilities, but shall be
available to the Chief Executive Officer for consultation and advice.
In the event that Mr. King obtains, and performs, full time employment
with another entity prior to the Separation Date, Mr. King will
immediately resign from Graco and his employment shall terminate as of
the date of said resignation, rather than the Separation Date, in
accordance with normal Graco policy and practice.
2. Salary and Annual Bonus Plan
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Mr. King's current base salary, and all benefits, shall continue until
the Separation Date. He shall be entitled to payment under the 1999
Corporate and Business Unit Annual Bonus Plan for the full year annual
bonus to which he would have been entitled under said plan had he
stayed in the position of Vice President and General Manager, European
Operations. Said payment shall be made in 2000 when the payments under
said plan are made to all participants therein. He shall not be
entitled to any bonus under the Annual Bonus Plan for 2000.
3. Stock Options
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All stock options granted to Mr. King 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. King
pursuant to said plan, based on a Separation Date of March 2, 2000, or
earlier termination date if Mr. King's employment is otherwise
terminated as provided herein.
4. Cooperation
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For a period of three (3) years after March 2, 2000, Mr. King 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.
King for any reasonable out-of-pocket expenses (including attorneys'
fees, if necessary) incurred by him in connection with rendering such
cooperation.
5. Confidentiality
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a. Mr. King hereby agrees that, for a period of three (3) years
after March 2, 2000, 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. King, 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. King 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. King, or information which Mr. King is required to
disclose in a court or other judicial proceeding or is otherwise
legally required to disclose.
c. The provisions of this Section 5 are in addition to, and not in
lieu of, the fiduciary and other duties and obligations of Mr.
King as an employee, officer and director of Graco, and this
Section 6 does not limit said obligations in any way, by time or
otherwise.
6. Release
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a. Except with respect to the provisions of this Agreement, Mr. King
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 Separation Date,
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, or any right or claim Mr. King 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 6 shall not
affect Mr. King'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 the Separation Date.
b. Mr. King certifies, represents and agrees that:
(i) this Agreement is written in a manner that he understands;
(ii) he understands that this Section 6 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 or arise prior to the Separation Date;
(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 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. King understands that
Graco will have no obligation under this Agreement if he
revokes his acceptance within the time limit specified.
(ix).Mr. King expressly agrees that the waiver of his rights
pursuant to the Agreement is knowing and voluntary on his
part.
7. Termination for Cause; Death or Disability
---------------------------------------------
It is understood that notwithstanding this Agreement, the Company may
terminate Mr. King for cause, as defined herein. In the event that Mr.
King shall die, or his employment is terminated due to disability as
defined in the Graco Long-Term Disability Plan, or his employment is
terminated for cause (defined herein as his gross or willful
misconduct, including but not limited to the wrongful appropriation of
Company funds or the commission of a felony), in each case prior to
the Separation Date, then in all such cases the standard Graco
policies, and with respect to stock options the provisions of the
Graco Long Term Incentive Plan and the stock option agreements
executed between Graco and Mr. King, shall govern any such termination
notwithstanding the provisions of this Agreement.
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
ROGER L. KING
By: /s/Roger L. King
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