Agreement
Effective as of the first day of January, 1996
by and between
The Coleman Company, Inc.
a Delaware corporation
with its principal place of business at
250 North St. Francis Street
Wichita, Kansas 67201
(the "Corporation")
and
Michael N. Hammes
(the "Executive")
WITNESSETH
Whereas, the Corporation and the Executive
mutually desire to enter into this Agreement
with respect to the Executive's employment
with the Corporation.
Now, therefore, in consideration of the mutual
covenants herein contained, the Corporation
and the Executive agree as follows:
1. EMPLOYMENT AND TERM. The Corporation agrees to employ the Executive
and the Executive agrees to serve the Corporation as Chairman and Chief
Executive Officer for a term beginning on January 1, 1996 and ending on December
31, 1997, unless sooner terminated in accordance with Section 5 hereof;
PROVIDED, that commencing on January 1, 1997 and each January 1 thereafter, the
term of this Agreement will automatically be extended for one additional year
unless, not later than June 30 of the preceding year, the Corporation or the
Executive will have given written notice to the other party not to extend this
Agreement (such
notice of nonrenewal given by the Corporation to the Executive being hereinafter
referred to as a "Nonrenewal"); and FURTHER, PROVIDED, that if a Change in
Control (as defined in Section 8 hereof) occurs during the term of this
Agreement (including any extensions thereto), this Agreement will continue in
effect for a period of not less than two (2) years beyond the month in which
such Change in Control occurs.
2. DUTIES. The Executive agrees to serve the Corporation faithfully and
to the best of his ability; to devote his entire time, energy and skill during
regular business hours to such employment; and to use his best efforts, skill
and ability to promote its interest.
3. RESPONSIBILITIES; PLACE OF PERFORMANCE.
(a) During the term of this Agreement, the Executive shall have such
title and perform such duties as from time to time may be assigned to him by the
Board of Directors of the Corporation (the "Board"); PROVIDED, that the title
and the duties assigned to the Executive shall not be inconsistent with his
status as Chairman and Chief Executive Officer. The Executive shall at all
times have executive powers and authority as shall reasonably be required to
enable him to discharge his duties in an efficient manner, together with such
facilities and services as are suitable or customary to his position.
(b) Except for occasional travel on the Corporation's business, the
Executive will be required to perform his duties under this Agreement in the
Denver, Colorado metropolitan area or in such other geographic location (within
the contiguous United States of America) as the Corporation may determine, so
long as the Corporation provides the Executive with relocation benefits no less
favorable than the relocation benefits available under the Corporation's
executive relocation policy as in effect for the 1995 relocation of the
Corporation's executive offices to the Denver, Colorado metropolitan area.
4. COMPENSATION AND RELATED MATTERS.
(a) SALARY. During the term of the Executive's employment hereunder,
the Corporation will pay to the Executive a salary at the rate of $600,000 per
annum, in substantially equal install-
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ments in accordance with normal payroll practices of the Corporation, but not
less frequently than monthly. The base salary may be increased by the Board
from time to time, in its discretion, but in no event shall such base salary be
reduced from the rate previously in effect. The base salary in effect from time
to time hereunder is referred to as the "Base Salary."
(b) EXPENSES. The Executive will be entitled to receive prompt
reimbursement from the Corporation of all reasonable expenses incurred by the
Executive in performing services hereunder during the term of the Executive's
employment hereunder, including all expenses of travel and living expenses while
away from home on business or at the request of the Corporation, consistent with
expense policies applicable to other senior executive officers. The Executive
will furnish the Corporation with evidence that such expenses were incurred as
the Corporation may from time to time reasonably request.
(c) INCENTIVE BONUS. With respect to each calendar year during the
Term, the Executive will be granted an annual target incentive bonus opportunity
(the "Target Bonus") equal to no less than 100% of Base Salary. Payments of the
Executive's annual incentive bonus shall be made in accordance with the terms
and conditions set forth in the then current incentive bonus plan or arrangement
maintained by the Corporation (the "Incentive Plan"). The Target Bonus may be
increased from time to time, but may not be decreased below the percentage of
Base Salary previously in effect unless an adjustment is made in the Executive's
Base Salary such that the aggregate dollar amount of the Executive's Base Salary
and Target Bonus (after giving effect to the foregoing adjustments) is no less
than the aggregate dollar amount of such Base Salary and Target Bonus
(immediately prior to such adjustments).
(d) EMPLOYEE BENEFITS. The Executive will be entitled to participate
in all of the other employee benefit plans, programs and arrangements which are
presently or may hereafter be provided by the Corporation to its senior
executive officers including, without limitation, all retirement, health
insurance and life insurance plans, programs and arrangements (the "Benefit
Plans"), on a basis no less favorable than that of other senior executive
officers of the Corporation. In addition, the Executive will be entitled to
participate in all nonqualified employee
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pension plans or arrangements of the Corporation in which he is currently or
subsequently designated as a participant (the "Pension Plans"). The Corporation
agrees that it will not terminate Executive's participation in any of the
Pension Plans or amend any of the Pension Plans in any manner adverse to the
Executive without the Executive's prior written consent.
(e) VACATIONS. The Executive will be entitled to four (4) weeks of
vacation each calendar year, in accordance with the Corporation's vacation
policy as in effect from time to time. Vacation time which has not been used by
the end of each calendar year will be forfeited.
(f) CORPORATION AUTOMOBILE. The Corporation will provide the
Executive with an automobile during the term of this Agreement. The Corporation
will pay all reasonable expenses associated with the operation of such
automobile in the same manner as is in effect from time to time with respect to
other senior executive officers of the Corporation, including, without
limitation, all reasonable maintenance and insurance expenses. The automobile
furnished by the Corporation will be a late model luxury automobile of his
choice. At the expiration of the term of this Agreement, the Executive will
promptly return the automobile to the Corporation.
(g) OTHER. The Corporation will pay or promptly reimburse the
Executive for reasonable costs incurred by him in connection with his engagement
of professional estate planning and income tax assistance; PROVIDED, that such
amounts will not exceed $10,000 with respect to any calendar year.
5. TERMINATION.
(a) DEATH. The Executive's employment hereunder will terminate upon
his death.
(b) DISABILITY. The Executive's employment hereunder will terminate
upon his Disability. For purposes of this Agreement, the Executive will be
considered "Disabled" when eligible for benefits under the Corporation's long-
term disability plan as in effect from time to time (the "Disability Plan").
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(c) CAUSE. The Executive's employment hereunder may be terminated
for Cause, as provided below. "Cause" means (i) the willful and continued
failure by the Executive to substantially perform the Executive's duties with
the Corporation (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) or (ii) the willful engaging by
the Executive in conduct which is demonstrably and materially injurious to the
Corporation, monetarily or otherwise. For purposes of the preceding sentence,
no act, or failure to act, on the Executive's part will be deemed "willful"
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the Executive's act, or failure to act, was in
the best interest of the Corporation. Notwithstanding the foregoing, Cause will
not exist unless and until the Corporation has delivered to the Executive a
resolution duly adopted by the affirmative vote of three-quarters or more of the
Board then in office at a meeting of the Board called and held for such purpose
(after reasonable notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before the Board), finding that in the
good faith opinion of the Board, the Executive was guilty of the conduct set
forth in this Section 5(c) and specifying the particulars thereof in detail.
(d) GOOD REASON. The Executive may voluntarily terminate his
employment with the Corporation for Good Reason. Good Reason will exist upon
(i) the occurrence of any material breach of this Agreement on the part of the
Corporation (including, but not limited to, any breach of Section 3 or 4
hereof), (ii) the delivery to the Executive of a notice of Nonrenewal by the
Corporation; PROVIDED, that the Executive delivers a Notice of Termination
within sixty (60) days of the delivery of such notice of Nonrenewal, or (iii)
after the occurrence of a Change in Control, (1) a substantial adverse
alteration in the Executive's title or in the nature or status of the
Executive's responsibilities from those in effect immediately prior to such
Change in Control or (2) any change to the manner in which the Incentive Plan is
administered (including, but not limited to, the process utilized in setting
performance goals and the relative difficulty of achieving such goals), compared
to the manner in which the Incentive Plan was administered immediately prior to
the Change in Control, which change results in a significantly greater
likelihood that the Executive will be unable to earn the Target Bonus.
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The Executive's right to terminate the Executive's employment for
Good Reason will not be affected by the Executive's incapacity due to physical
or mental illness. Except as provided above, the Executive's continued
employment will not constitute consent to, or a waiver of rights with respect
to, any act or failure to act constituting Good Reason hereunder.
(e) RESIGNATION. The Executive may voluntarily terminate his
employment hereunder at any time. If such voluntary termination is made with
the consent of the Board of Directors, then the Executive shall be entitled to
receive the minimum retirement benefit as specified in the Consolidated
Supplemental Retirement Plan of not less than 40% of annual cash compensation.
(f) TERMINATION BY THE CORPORATION WITHOUT CAUSE. The Corporation
may terminate the Executive's employment hereunder without Cause at any time.
(g) NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Corporation or by the Executive (other than termination
pursuant to Section 5(a) hereof) must be communicated by written Notice of
Termination to other party hereto. For purposes of this Agreement, a "Notice of
Termination" will mean a notice that indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(h) DATE OF TERMINATION. "Date of Termination" will mean (i) if the
Executive's employment is terminated by his death, the date of his death, (ii)
if the Executive delivers a Notice of Termination within sixty (60) days of
delivery to the Executive of a notice of Nonrenewal from the Corporation, the
date of delivery of such Notice of Termination, and (iii) if the Executive's
employment is terminated for any other reason, the date specified in the Notice
of Termination.
6. COMPENSATION UPON TERMINATION
(a) FOR CAUSE; OTHER THAN FOR GOOD REASON. In the event that the
Executive's employment is terminated by the Corporation for Cause or by the
Executive other than for Good Reason,
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the Corporation will pay the Executive his Base Salary through the Date of
Termination. In addition, the Executive will be entitled to receive all accrued
benefits to which the Executive is entitled under the Benefit Plans, in
accordance with the terms of such Benefit Plans. The Executive will not be
entitled to any portion of the incentive bonus in respect of the calendar year
in which occurs the Date of Termination; PROVIDED, that if the Date of
Termination occurs after the end of a calendar year and prior to the
determination of whether the Executive is entitled to an incentive bonus for
such year, such incentive bonus will be paid, if and to the extent so
determined. In addition, if the Executive's employment is terminated for Cause
prior to the occurrence of a Change in Control, then notwithstanding anything to
the contrary contained in The Coleman Company, Inc. Consolidated Supplemental
Retirement Plan, as in effect from time to time (the "CSRP"), the Executive's
benefit under the first sentence of Section 4(a) of the CSRP will be determined
without regard to clause (ii) thereof.
(b) DEATH; DISABILITY. In the event that the Executive's employment
is terminated by reason of the Executive's death or Disability, the Corporation
will pay the Executive (or his estate or beneficiary if applicable) his Base
Salary through the Date of Termination. The Executive (or his estate or
beneficiary, if applicable) will be entitled to receive all accrued benefits to
which the Executive is entitled under the Benefit Plans, in accordance with the
terms of such Benefit Plans. The Executive (or his estate or beneficiary, if
applicable) will be entitled to receive (i) in a lump sum as soon as practicable
after the Date of Termination, any incentive bonus accrued but not yet paid to
the Executive, including for this purpose any accumulated but unpaid excess
amounts under the Incentive Plan in respect of all calendar years ending prior
to the Date of Termination, plus (ii) a pro rata portion of the incentive bonus
for the year in which occurs the Date of Termination, such incentive bonus (A)
to be calculated in accordance with the terms of the Incentive Plan based on the
actual results of the Corporation for such year and then multiplied by a
fraction the numerator of which is the number of full and partial months worked
by the Executive in such calendar year and the denominator of which is twelve
(12) and (B) to be payable at the same time as incentive bonuses are paid to
other participants in the Incentive Plan for such year. If the Date of
Termination occurs after the end of a calendar year and prior to the
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determination of whether the Executive is entitled to an incentive bonus for
such year, such incentive bonus will be paid, if and to the extent so
determined, at the same time as incentive bonuses are paid to other participants
in the Incentive Plan for such year. If such termination of employment is for
reason of Disability, the Executive will also be entitled to receive disability
benefits, whether or not then covered by the Disability Plan, comprised of
monthly salary continuation payments, in an amount calculated at two-thirds of
Base Salary, for a period of time ending no sooner than the earlier of the
Executive's attaining age 65 or his death; PROVIDED, that any such payments will
be offset by (i) any payments made to the Executive under the Disability Plan
and (ii) any disability benefits payable under Social Security.
(c) WITHOUT CAUSE OR DISABILITY; GOOD REASON. In the event that the
Executive's employment is terminated by the Corporation for any reason other
than for Cause or for Disability, or is terminated by the Executive for Good
Reason, then:
(1) The Corporation will pay to the Executive, in a lump sum on
the fifth day following the Date of Termination (i) any Base
Salary due the Executive through the Date of Termination, plus
(ii) any incentive bonus accrued but not yet paid to the
Executive under the Incentive Plan for all calendar years ending
prior to the Date of Termination, including for this purpose any
accumulated but unpaid excess amounts under the Incentive Plan;
PROVIDED, that if the Date of Termination occurs prior to the
determination of whether the Executive is entitled to an
incentive bonus for any such year, such incentive bonus will be
paid, if and to the extent so determined, at the same time as
incentive bonuses are paid to other participants in the Incentive
Plan for such year.
(2) The Corporation will pay to the Executive an amount equal to
a pro rata portion of the incentive bonus for the year in which
occurs the Date of Termination, such incentive bonus (A) to be
calculated in accordance with the terms of the Incentive Plan
based on the actual results of the Corporation and
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then multiplied by a fraction the numerator of which is the
number of full and partial months worked by the Executive in such
calendar year and the denominator of which is twelve (12) and (B)
to be payable at the same time as incentive bonuses are paid to
other participants in the Incentive Plan for such year.
(3) The Corporation will pay to the Executive compensation
continuation payments, payable on a monthly basis for a period of
two years immediately following the Date of Termination, equal to
one-twelfth (1/12) of the sum of the Executive's Base Salary and
Target Bonus (each as in effect immediately prior to the Date of
Termination, without regard to any reductions thereto giving rise
to Good Reason); PROVIDED, that during the second year of such
compensation continuation, payments will be offset by any and all
salary and bonus amounts paid to or accrued in respect of the
Executive for services rendered to any other employer. The
Executive will promptly notify the Corporation of the receipt or
accrual of any such salary or bonus. The Corporation and the
Executive agree that the Executive is expected to seek employment
in order to attempt to offset payments provided under this
Section 6(c)(3) during the second year of compensation
continuation but that the Executive will not be required to
accept any particular position of employment.
(4) The Corporation will allow the Executive to continue to
participate, for two (2) years beginning as of the Date of
Termination, in any and all of the welfare benefit plans
maintained by the Corporation in which the Executive was entitled
to participate immediately prior to such Date of Termination, to
the same extent and upon the same terms as the Executive
participated in such plans prior to the Date of Termination;
PROVIDED, that the Executive's continued participation is
permissible or otherwise practicable under the general terms and
provisions of such plans. To the extent
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that continued participation is neither permissible nor
practicable, the Corporation shall take such action as may be
necessary to provide the Executive with substantially comparable
benefits (without additional cost to the Executive) outside the
scope of such plan. If the Executive engages in regular
employment after his termination of employment (whether as an
executive or as a self-employed person), any employee welfare
benefits received by the Executive in consideration of such
employment which are similar in nature to the employee welfare
benefits provided by the Corporation will relieve the Corporation
of its obligation under this Section 6(c)(4) to provide
comparable benefits to the extent of the benefits so received.
The Executive will promptly notify the Corporation of his receipt
of any such benefits.
(5) The Corporation will pay or promptly reimburse the Executive
for all reasonable expenses incurred by him for professional
outplacement services for a period of one year (the "Outplacement
Payment"); PROVIDED, that the Outplacement Payment does not
exceed in the aggregate $25,000, and will pay an additional
amount to reimburse the Executive for any federal, state and
local income taxes imposed on the Executive by virtue of the
Outplacement Payment and the additional payment hereunder, such
that the net amount retained by the Executive, after deduction of
any such taxes on the Outplacement Payment and any such taxes on
any additional payment provided by this Section 6(c)(5), shall be
equal to the Outplacement Payment.
(6) Any and all stock options granted to the Executive under the
stock option plans of the Corporation (the "Option Plans") will
be treated as follows: (i) each stock option originally granted
with a term of five and one-half years or less under any Option
Plan will become immediately and fully vested as of the Date of
Termination, and (ii) each stock option originally granted with a
term of more
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than five and one-half years under any Option Plan will become
vested as of the Date of Termination on the basis of the
following vesting schedule, if more favorable than the vesting
schedule otherwise applicable to such stock option: the number of
shares of Corporation common stock subject to each such stock
option multiplied by the percentage obtained by multiplying 1.67%
by the number of full and partial months of the Executive's
service during the term of such stock option through and
including the Date of Termination. The vested portion of stock
options under this Section 6(c)(6) shall remain exercisable for a
period of ninety (90) days after the Date of Termination (but not
beyond its normal expiration date). Any portion of any stock
option which does not vest under this Section 6(c)(6) (or under
the vesting schedule otherwise applicable to such stock option)
shall be forfeited as of the Date of Termination.
(7) All accrued benefits of the Executive under the Pension
Plans will immediately vest as of the Date of Termination;
PROVIDED, that, regardless of the Executive's age on the Date of
Termination, the Executive will be entitled to receive benefits
determined under Section 4 of the CSRP which benefits will be
calculated without regard to any actuarial reduction to such
benefit to reflect commencement of such benefit prior to the
Executive's Normal Retirement Date (as such term is defined in
the CSRP).
7. EXCISE TAX.
(a) In the event that any payment or benefit received or to be
received by the Executive in connection with a Change in Control or the
termination of the Executive's employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Corporation, any
person whose actions result in a Change in Control or any person affiliated with
the Corporation or such person) (all such payments and benefits being
hereinafter called "Total Payments") will be subject (in whole or part) to the
excise tax (the "Excise Tax") imposed under
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Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
then, subject to the provisions of Section (7)(b) hereof, the Corporation will
pay to the Executive an additional amount (the "Gross-Up Payment") such that the
net amount retained by the Executive, after deduction of any Excise Tax on the
Total Payments and any federal, state and local income tax and Excise Tax upon
the payment provided for by this Section 7, will be equal to the Total Payments.
For purposes of determining the amount of the Gross-Up Payment, the Executive
will be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the Gross-Up Payment is to
be made and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Executive's residence on such date,
net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes.
(b) In the event that, after giving effect to any redeterminations
described in Section 7(d) hereof, a reduction in the Total Payments to the
largest amount that would result in no portion of the Total Payments being
subject to the Excise Tax (after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in such other plan,
arrangement or agreement) would produce a net amount (after deduction of the net
amount of federal, state and local income tax on such reduced Total Payments)
that would be greater than the net amount of unreduced Total Payments (after
deduction of the net amount of federal, state and local income tax and the
amount of Excise Tax to which the Executive would be subject in respect of such
Total Payments), then Section 7(a) hereof will not apply and the Total Payments
will be so reduced.
(c) For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amount of such Excise Tax, (i) all of
the Total Payments will be treated as "parachute payments" within the meaning of
Section 280G(b)(2) of the Code, unless in the opinion of tax counsel selected by
the Corporation's independent auditors and reasonably acceptable to the
Executive ("Tax Counsel"), such other payments or benefits (in whole or in part)
do not constitute parachute payments, including by reason of Section
280G(b)(4)(A) of the Code, (ii) all "excess parachute payments" within the
meaning of Section 280G(b)(l) of the Code will be treated as subject to the
Excise Tax, unless in
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the opinion of Tax Counsel such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered, within the
meaning of Section 280G(b)(4)(B) of the Code, in excess of the base amount (as
defined in Section 280G(b)(3) of the Code) allocable to such reasonable
compensation, or are otherwise not subject to the Excise Tax, and (iii) the
value of any noncash benefits or any deferred payment or benefit will be
determined by the Corporation's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code. The Corporation will
provide the Executive with its calculation of the amounts referred to in this
Section 7 and such supporting materials as are reasonably necessary for the
Executive to evaluate the Corporation's calculations. If the Executive disputes
the Corporation's calculations (in whole or in part), the reasonable opinion of
Tax Counsel with respect to the matter in dispute will prevail.
(d) In the event that (i) the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time of payment
of the Total Payments and (ii) after giving effect to such redetermination, the
Total Payments are reduced pursuant to Section 7(b) hereof, the Executive will
repay to the Corporation, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the Gross-Up Payment
attributable to the Excise Tax and federal, state and local income tax imposed
on the Gross-Up Payment being repaid by the Executive to the extent that such
repayment results in a reduction in the Excise Tax and/or a federal, state or
local income tax deduction) plus interest on the amount of such repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. In the event that (x) the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time of the termination of the Executive's employment (including by reason
of any payment the existence or amount of which cannot be determined at the time
of the Gross-Up Payment) and (y) after giving effect to such redetermination,
the Total Payments are not reduced pursuant to Section 7(b) hereof, the
Corporation will make an additional Gross-Up Payment in respect of such excess
and in respect of any portion of the Excise Tax with respect to which the
Corporation had not previously made a Gross-Up Payment (plus any interest,
penalties or additions payable by the Executive with respect
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to such excess and such portion) at the time that the amount of such excess is
finally determined.
8. CHANGE IN CONTROL. (a) For purposes of this Agreement, a Change
in Control will be deemed to have taken place upon the occurrence of any of the
following events:
(i) any "person" (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as
modified in Sections 13(d) and 14(d) of the Exchange Act) other than (A)
the Corporation or any of its subsidiaries, (B) any employee benefit plan
of the Corporation or one of its subsidiaries, (C) MacAndrews & Forbes
Holdings Inc. or any affiliate thereof (collectively, "MAFCO"), (D) a
corporation owned, directly or indirectly, by stockholders of the
Corporation in substantially the same proportions as their ownership of the
Corporation, or (E) an underwriter temporarily holding securities pursuant
to an offering of such securities (a "Person"), becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Corporation representing 20% or more of
the shares of common stock of the Corporation then outstanding, and such
Person's beneficial ownership level then exceeds the percentage of the
Corporation's outstanding shares beneficially owned by MAFCO;
(ii) the consummation of any merger or consolidation of the
Corporation or one of its subsidiaries with or into any other corporation,
other than a merger or consolidation which would result in the holders of
the voting securities of the Corporation outstanding immediately prior
thereto holding securities which represent immediately after such merger or
consolidation more than 80% of the combined voting power of the voting
securities of the Corporation or the surviving corporation or the parent of
such surviving corporation;
(iii) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets; or
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(iv) a majority of the Board votes in favor of a decision that a
Change in Control has occurred.
(b) Notwithstanding anything in Section 8(a) hereof to the contrary,
any event or transaction which would otherwise constitute a Change in Control (a
"Transaction") shall not constitute a Change in Control for purposes of this
Agreement if, in connection with the Transaction, the Executive participates as
an equity investor in the acquiring entity or any of its affiliates (the
"Acquiror"). For purposes of the preceding sentence, the Executive shall not be
deemed to have participated as an equity investor in the Acquiror by virtue of
(i) obtaining beneficial ownership of any equity interest in Acquiror as a
result of the grant to the Executive of incentive compensation awards under one
or more incentive plans of Acquiror, on terms and conditions substantially
equivalent to those applicable to other executives of the Corporation
immediately prior to the Transaction, after taking into account normal
differences attributable to job responsibilities, title and the like, or (ii)
obtaining beneficial ownership of any equity interest in Acquiror on terms and
conditions substantially equivalent to those obtained in the Transaction by all
other stockholders of the Corporation.
(c) Upon the occurrence of a Change in Control during the term of
this Agreement, whether or not the Executive's employment within the Corporation
is terminated in connection with such event, (i) any and all stock options
granted to the Executive under the Option Plans will become immediately vested
and (ii) the Executive's benefit under the CSRP will become immediately vested.
9. INVENTIONS; CONFIDENTIAL INFORMATION; COMPETITORS.
(a) All inventions, whether or not patentable, conceived or developed
by Executive, alone or with others, during his employment by the Corporation
will be the property of the Corporation and will be promptly and fully disclosed
by Executive to the Corporation. Executive will perform all necessary acts to
vest title fully to any such invention in the Corporation and to enable the
Corporation, at its expense, to secure and maintain domestic and/or foreign
patents or any other rights for such inventions.
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(b) Without the express prior written consent of the Corporation,
Executive will not disclose or make available to anyone outside the Corporation,
its subsidiaries, or affiliated corporations or entities any confidential or
proprietary information of, or concerning, the Corporation, including, without
limitation, trade secrets, know how, customer lists, inventions or other
information not generally known to any competitor of the Corporation, its
subsidiaries or affiliated corporations or entities. Upon termination of his
employment, Executive will promptly deliver to the Corporation all documents
containing any such confidential or proprietary information without retaining
any copies or extracts thereof.
(c) During the time he is employed by the Corporation or serves the
Corporation as a consultant, Executive will not serve as officer, director or
employee or be associated in any other capacity with any corporation,
partnership or other entity or person which is a competitor of the Corporation,
its subsidiaries, or affiliated corporations or entities. During such period
Executive will have no financial interest in any corporation, partnership or
other entity which is a competitor of the Corporation, its subsidiaries, or
affiliated corporations or entities, except participation solely as a
stockholder owning not more than 5% of the outstanding shares of a publicly
owned business.
(d) Executive acknowledges that his services are special, unique,
unusual and extraordinary, giving them peculiar value, the loss of which cannot
be reasonably or adequately compensated for by damages and, in the event of
Executive's breach of this Section 9, the Corporation will be entitled to
equitable relief by way of injunction or otherwise.
10. TERMINATION OF PRIOR AGREEMENTS. This Agreement expressly supersedes
all agreements and understandings between the parties with respect to
Executive's employment and any such agreement is hereby terminated as of the
date first above written.
11. BINDING EFFECT. This Agreement will be binding upon and inure to the
benefit of the parties hereto, their respective legal representatives and to any
successor of the Corporation, which successor will be deemed substituted for the
Corporation under the terms of this Agreement. As used in this Agreement, the
term "successor" will include any person, firm, corporation, or other
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business entity which at any time, whether by merger, purchase or otherwise,
acquires all or substantially all of the assets or business of the Corporation.
12. WAIVER OF BREACH. The waiver by the Corporation of a breach of any
provision of this Agreement by the Executive will not operate or be construed as
a waiver of any subsequent breach.
13. NOTICES. Any notice required or permitted to be given will be
sufficient, if in writing, and if sent by registered or certified mail to the
Executive at his residence or to the Corporation at its principal place of
business.
14. ENTIRE AGREEMENT. This document contains the entire agreement of the
parties and may not be changed except in a written modification signed by both
parties.
15. INDEMNIFICATION. The Corporation will indemnify the Executive, to the
maximum extent permitted by applicable law, against all costs, charges and
expenses incurred or sustained by the Executive in connection with any action,
suit or proceeding to which the Executive may be made a party by reason of the
Executive being an officer, director or employee of the Corporation or of any
subsidiary or affiliate of the Corporation.
16. LEGAL FEES. The Corporation will pay or promptly reimburse the
Executive for the reasonable legal fees and expenses incurred by the Executive,
in good faith, in connection with enforcing or defending any right of the
Executive pursuant to this Agreement.
17. GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Colorado, as applied to contracts
executed and performed wholly within the State of Colorado.
18. SURVIVORSHIP. Any rights and obligations of the parties set forth in
Sections 4(d), 6, 7 and 9 of this Agreement will survive any termination of this
Agreement.
19. ARBITRATION. All disputes or controversies arising under or in
connection with this Agreement, including for this purpose any claims by the
Executive relating to any Pension Plan,
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will be settled exclusively by arbitration, in Wichita, Kansas, in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction;
PROVIDED, that the Executive will be entitled to seek specific performance of
the Executive's right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
below, correcting and restating a prior agreement between the parties with same
effective date.
THE COLEMAN COMPANY, INC.
By: /s/ Larry E. Sanford
---------------------------
Date: 4/29/96
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/s/ Michael N. Hammes
------------------------------
MICHAEL N. HAMMES
Date: 4/29/96
-------------------------
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