Agreement
Effective as of the 1st day of August, 1996
by and between
The Coleman Company, Inc.
a Delaware corporation
with its principal place of business at
1526 Cole Blvd. Suite 300
Golden, Colorado 80401
(the "Corporation")
and
Steven F. Kaplan
(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:
(i) 1. EMPLOYMENT AND TERM. The Corporation agrees to employ
the Executive and the Executive agrees to serve the Corporation
as a senior executive officer for a term beginning on August 1,
1996 and ending on July 31, 1998, unless sooner terminated in
accordance with Section 5 hereof; PROVIDED, that commencing on
August 1, 1997 and each August 1 thereafter, the term of this
Agreement will automatically be extended for one additional year
unless, not later than January 31 of that 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") or the Chief
Executive Officer of the Corporation; PROVIDED, that the title and the duties
assigned to the Executive shall include the title and the duties of Chief
Financial Officer and shall not be inconsistent with his status as a senior
executive officer of the Corporation. The Executive shall at all times
report directly to the Chief Executive Officer and shall 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.
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
$280,000 per annum, in substantially equal installments 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
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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 of this agreement, the Executive will be granted an annual target
incentive bonus opportunity (the "Target Bonus") equal to no less than 70% 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
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
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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 top-of-the-line
Oldsmobile or like vehicle to be selected by the Executive. 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 $3,000 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" beginning when first eligible for benefits
under the Corporation's long-term disability plan as in effect from time to
time (the "Disability Plan").
(c) CAUSE. The Executive's employment hereunder may be terminated
for Cause, as provided below. "Cause" means (i) the willful and continued
(after written notice and a reasonable opportunity to cure) failure by the
Executive to substantially
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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. Upon the Corporation's determination that Cause for the
Executive's termination exists, the Corporation may elect to terminate this
Agreement upon sixty (60) days' prior written notice to the Executive.
(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. A good faith determination by the Executive that,
following a Change in Control, there has been a material breach of this
Agreement on the part of the Corporation, a substantial adverse alteration in
Executive's title or the nature or status of Executive's responsibilities, or
there is a significantly greater likelihood that Executive will be unable to
earn the Target Bonus, shall be binding on the Corporation, and any finder of
fact shall be limited in its inquiry to whether the Executive acted in good
faith in making such determination. A transition of the Corporation from a
public company to a private company shall not, in
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itself, be a change which would allow a good faith determination by Executive
that there has been a substantial adverse alteration in Executive's title, or
the nature or status of Executive's responsibilities.
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.
(f) TERMINATION BY THE CORPORATION WITHOUT CAUSE. The Corporation
may terminate the Executive's employment hereunder without Cause at any time,
provided however, and notwithstanding the termination of Executive's
employment hereunder without Cause, if Executive should become Disabled under
the Disability Plan during any continuation of Executive's participation in
the Corporation's welfare benefit plans under Section 6, then Executive shall
thereafter be treated in all respects as though terminated for Disability and
not as terminated without Cause.
(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
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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, 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
earned under the applicable plan.
(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
Termi-
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nation 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 earned under the
applicable plan, 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 earned under the applicable plan, 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
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based on the actual results of the Corporation 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.
(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
9
terms and provisions of such plans. To the extent 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
10
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.
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 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
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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 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
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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 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 "Ex-
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change 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
(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
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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, any and all stock options granted
to the Executive under the Option Plans 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.
(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.
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(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 and the Addendum hereto 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 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 either party of a breach of any
provision of this Agreement by the other party 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.
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14. ENTIRE AGREEMENT. This document, and the Addendum hereto, 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, including the cost of legal
counsel selected and retained 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 and in the Addendum to this
Agreement will survive any termination of this Agreement.
19. ARBITRATION. Excluding only requests for equitable relief by the
Corporation under Section 9 of this Agreement, 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, will be settled
exclusively by arbitration, in Denver, Colorado, 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
below.
THE COLEMAN COMPANY, INC.
By: Michael N. Hammes
-------------------------
Date: August 3, 1996
Steven F. Kaplan
-----------------------------
EXECUTIVE
Date: August 3, 1996
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