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EXHIBIT 10.5
THE COLEMAN COMPANY, INC.
June 11, 1997
Mr. Frederik van den Bergh
"Le Biolet"
F-74140 - Loisin
France
Dear Mr. van den Bergh:
This letter is intended to fully settle all of our differences arising
out of or relating to your employment with The Coleman Company, Inc. ("Coleman")
and the "Company" (as hereinafter defined) and your separation from such
employment.
You will continue to serve the Company until your "Severance Date,"
which means June 30, 1997. On your Severance Date you will, by our mutual
agreement and consent, cease to be an employee, officer and director of the
Company and all affiliated companies. Certain amounts will become payable to or
in respect of you, and you will be entitled to certain rights and benefits, on
account of your separation from the Company's employ, as described below.
The term "Severance Period" as used in this Agreement means the period
from July 1, 1997 through June 30, 1998, or if earlier, the end of the month in
which your death occurs.
1. SALARY, SEVERANCE, UNEMPLOYMENT COMPENSATION:
(a) Through the Severance Date, you will be paid a monthly
salary at your current annual rate of $500,000, and you will
be entitled to continue to participate in all retirement,
health and other fringe benefit plans in which you currently
participate on a
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basis equivalent to Company executives of similar stature.
(b) You will be paid two severance payments, as follows: a lump
sum payment of $450,000 on July 3, 1997 and a lump sum
payment of $100,000 on October 3, 1997.
(c) You acknowledge and agree that any bonus to which you might
be entitled on account of services after 1996 are adequately
reflected in the payments provided for herein and that no
bonuses or other incentive or extra compensation is
presently owed to you.
(d) If you apply for, and are awarded, unemployment compensation
benefits during the Severance Period, your compensation
specified in Section 1(b) will be reduced by the amount of
unemployment compensation you receive. The decision to
apply for state unemployment compensation is your own.
2. SPECIAL PAYMENT:
(a) Coleman will pay you an additional $66,667 on July 3, 1997
if you have not exercised your right to revoke the ADEA
Release (as defined herein) as provided in Section 15(b).
(b) It is understood that any payment made under Section 2(a)
shall be a special inducement to you not to revoke the ADEA
release.
3. PENSION BENEFITS:
You agree and acknowledge that you are not entitled to any benefits
under any employee benefit plan of the Company, including but not limited to any
supplemental executive retirement plan or any other pension plan, except as
specifically provided for herein.
4. VACATION:
As soon as practicable after the Severance Date, you will be paid for
two weeks of unused accrued vacation in accordance with the Company's regular
policies. Except as provided in the preceding sentence, you shall cease to have
any right to any unused accrued vacation and no payment shall be made to you on
account of any such vacation time.
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5. MEDICAL BENEFITS:
(a) Through the last day of the Severance Period, you will
continue to be eligible to participate in Coleman's medical
program available to Coleman's senior-most executives or in
a substantially comparable program to be selected by the
Company. You and the Company acknowledge that, after the
end of the Severance Period, you will not be eligible to
participate in any of Coleman's medical programs, including
Coleman's retiree medical programs.
If you engage in regular employment after the Severance Date
(whether as an executive or as a self-employed person), and
you or your spouse are eligible to receive or receive any
medical benefits in consideration of such employment,
Coleman will be relieved of its obligation under this
Section 5 to provide medical benefits. You will promptly
notify Coleman of your employment and eligibility for, or
receipt of, medical benefits.
(b) After the Severance Date, neither you nor your spouse will
be eligible to participate in any Company welfare plans
except as provided above, and such coverage shall be in lieu
of coverage otherwise available to either you or your spouse
under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") or any other applicable continuation of
coverage laws. The benefits provided by this Section 5
shall be contingent on the execution by you and your spouse
of such acknowledgments of the foregoing, including any
waivers of your and your spouse's rights under COBRA, as the
Company may reasonably request, including a waiver in the
form of Attachment B.
6. EQUITY:
(a) STOCK OPTIONS.
You will be eligible to exercise the following stock options
for 90 days after the Severance Date:
-------------------------------------------------------
# Vested @ 6/30/97
as per Employment
Grant Date Agreement Option Price
-------------------------------------------------------
5-1-96 23,380 $23.125
-------------------------------------------------------
12-27-96 3,507 $ 15.00
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-------------------------------------------------------
4-15-97 501 $ 14.00
-------------------------------------------------------
Such options, if not exercised within such 90 day period,
shall terminate and expire at the end of such 90 day period.
You acknowledge and agree that all other stock options held
by you are not presently exercisable and are not scheduled
to become exercisable before the Severance Date and
accordingly will not be exercisable after the date hereof.
Notwithstanding anything to the contrary in the agreements
governing the stock options, you agree that: if you wish to
exercise a stock option, you will provide Coleman with
written advance notice (in the manner described in Section
20 of this Agreement) stating your intention and identifying
an option exercise date at least seven days after the date
that such advance notice is received by Coleman; within
three days after the receipt by Coleman of any such advance
notice, Coleman may in its sole discretion determine to pay
you cash in lieu of allowing you to exercise some or all of
the stock options with respect to which you have provided
such advance notice of intention to exercise; if Coleman
determines to exercise its rights under this Section 6,
Coleman shall provide to you, within such three day period,
a written notice identifying the stock options as to which
Coleman has determined to so exercise its rights and the
number of shares under each such stock option as to which
Coleman has so determined to exercise its rights; any such
cash payment shall be paid to you within five days after the
option exercise date set forth in your advance notice; and
the amount of such cash payment shall (on an option-by-
option basis) equal the number of shares to which you would
otherwise would have become entitled (the "Shares") on
exercise of the stock option in respect of which Coleman has
determined to exercise its rights under this Section 6,
multiplied by the difference between (A) the closing price
of a Share on the New York Stock Exchange on the date on
which you would have exercised your stock option (but for
Coleman's exercise of its rights under this Section 6) minus
(B) the per share exercise price of such stock option.
(b) QUALIFYING SHARES
All shares of any subsidiary of the Company which you hold
on the date of this Agreement shall be returned to such
subsidiary or its designee prior to the Severance Date. You
shall receive no
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consideration for such shares.
7. OFFSET:
If there shall ever be any amount due to the Company on account of
claims which are not covered by the release provided herein, the Company shall
be entitled to offset against any amount payable to or in respect of you
hereunder, any sums owed by you to the Company provided that any such offset
shall be made only at the direction of an arbitrator conducting an arbitration
pursuant to Section 24 of this Agreement.
8. WAIVER, MUTUAL RELEASE, ETC.:
(a) You release and discharge the Company from any and all
charges, claims and causes of action of any kind, whether
known or unknown and whenever arising, including, but not
limited to, all claims arising at any time, directly or
indirectly, out of your employment or the termination of
your employment with the Company, PROVIDED, HOWEVER, that
you do not waive, and such released claims shall not
include, any of your rights to receive payments and benefits
under this Agreement or otherwise enforce this Agreement.
(b) You realize there are many laws and regulations prohibiting
employment discrimination pursuant to which you may have
rights or claims. These include, without limitation, the
Age Discrimination in Employment Act of 1967, as amended;
the National Labor Relations Act, as amended; the Civil
Rights Act of 1991; 42 U.S.C. 1981, as amended; the
Americans With Disabilities Act of 1990; Title VII of the
Civil Rights Act of 1964, as amended; the Employee
Retirement Income Security Act of 1974, as amended; and
various other foreign and U.S. federal, state and local
human rights laws. You also understand there may be other
statutes and laws of contract and tort, otherwise relating
to your employment. By signing this Agreement you
acknowledge that you intend to waive and release any rights
known or unknown you may have under these laws, as provided
in paragraph 8(a) (subject to your limited rights under
Section 15(b)).
(c) You have not filed, nor will you initiate or cause to be
initiated on your behalf, any complaint, charge, claim or
proceeding against the Company before any local, state
federal or foreign agency, court or other body relating to
your employment or the resignation thereof (each
individually a "Proceeding"), nor
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will you participate in any Proceeding, in each case,
except as required by law. You represent that you
are not aware of any basis on whichsuch a Proceeding
could reasonably be instituted. You waive any right
you may have to benefit in any manner from any
relief (whether monetary or otherwise) arising out of any
Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission ("EEOC"). You understand
that by entering into this Agreement, you will be limiting
the availability of certain remedies that you may have
against the Company and limiting also your ability to pursue
certain claims against the Company.
(d) The Company forever releases you, your family, your estate,
your agents, successors and assigns from any and all claims,
demands, causes of action, controversies, agreements,
promises and remedies, in connection with or in relationship
to your capacity as an employee or officer or director of
the Company, whenever arising, whether known or unknown,
PROVIDED, HOWEVER, that the Company does not release any of
its rights arising under this Agreement.
(e) As referred to in this Agreement, the Company includes any
or all of Coleman, its subsidiaries and other affiliates,
divisions, respective successors and assigns, the directors,
officers, representatives, shareholders, agents, employees
of any of them and, in the case of individuals, their
respective heirs and personal representatives. References
in this Agreement to a person's employment include not only
common law employment but also service as a director or
other service as an independent contractor.
9. COOPERATION; NO RE-EMPLOYMENT:
(a) In consideration of the payments to be made under Section
1(b) and the other provisions of this Agreement, during the
two year period following the Severance Date you agree to
make reasonable efforts to cooperate with the Company, if
requested by Coleman, in the handling or investigation of
any administrative charges, government inquiries or lawsuits
involving the Company that relate to matters that arose
while you were an employee or director of the Company and to
consult with the Company and its advisors, as reasonably
requested, on business inquiries related to any such
matters. The Company will reimburse you for any reasonable
out-of-pocket expenses you incur by reason of such
cooperation.
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(b) You agree that you will not, at any time, reapply for
employment with the Company in any capacity. You expressly
waive any right or claim you may have for employment or
reemployment with the Company. You covenant that you will
not bring any suit or claim against the Company should you
seek to obtain employment with the Company in the future and
are denied such employment and you agree that this release
shall be a complete bar to your entitlement to any legal,
equitable, or administrative relief based upon any such
denial of employment.
10. DOCUMENTS, NON-SOLICITATION,
CONFIDENTIALITY AND NON-COMPETITION:
(a) Promptly following the Severance Date, you agree to return
to the Company all originals and copies of papers, notes,
and documents (in any medium, including computer disks),
whether Company property or not, prepared, received or
obtained by you or your counsel during the course of your
employment with the Company, and all equipment and property
of the Company which may be in your possession or under your
control, whether or not relating to the claims released
hereby, including all such papers, work papers, notes,
documents and equipment in the possession of your family and
counsel. You agree that you, your family and counsel shall
not retain copies of any such papers, work papers, notes and
documents. Notwithstanding the foregoing, you may keep
copies of any employment or benefits agreements between you
and the Company, this Agreement, any publicly filed
materials and any employee benefit plan and stock option
plan materials distributed generally to participants in any
such plan by the Company.
(b) You also agree that for a period of two years from the
Severance Date you will not solicit, entice or encourage any
employee or officer of the Company, or any independent
contractor, to terminate his or her relationship with the
Company or to initiate or to threaten to initiate any legal
process against the Company, and you shall not approach any
such person for such purposes or authorize or knowingly
approve the taking of such actions by any third party.
(c) As a senior executive of the Company, you acknowledge that
you have had access to proprietary information of the
Company and confidential information regarding the Company,
its
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personnel policies and its personnel. You agree that
you and your spouse will hold, and that you will use your
best efforts to cause your family and counsel to hold, all
such information in a fiduciary capacity for the benefit of
the Company and you will not disclose to any third party or
use for your or their benefit or that of any third party,
any such information except to the extent required by law or
agreed to by the Company. Without limiting the foregoing,
you agree that you will not at any time divulge to any other
entity or person any confidential information acquired by
you concerning the Company's financial affairs or business
processes or methods or their research, development or
marketing programs or plans, any other of its or their trade
secrets, any confidential information regarding customers or
customer lists, any confidential information regarding
personal matters of any shareholders, directors, officers,
employees or agents of the Company or their respective
family members, any confidential information concerning this
Agreement or the terms thereof, or any confidential
information concerning the circumstances of your employment
with and the termination of your employment from the
Company, or any confidential information regarding
discussions related to any of the foregoing or make, write,
publish, produce or in any way participate in placing into
the public domain any statement, opinion or information with
respect to any of the foregoing or which reflects adversely
upon or would reasonably impair the reputation or best
interests of the Company or any of its shareholders,
directors, officers, employees or agents or their respective
family members, except in each case information which is
required to be disclosed by court order, subpoena or other
judicial or governmental administrative process. The
foregoing prohibitions shall include, without limitation,
directly or indirectly publishing (or causing, participating
in, assisting or providing any statement, opinion or
information in connection with the publication of) any
diary, memoir, letter, story, photograph, interview,
article, essay, account or description (whether
fictionalized or not) concerning any of the foregoing,
publication being deemed to include any presentation or
reproduction of any written, verbal or visual material in
any communication medium, including any book, magazine,
newspaper, theatrical production or movie, or television or
radio programming or commercial. In addition to any and all
other remedies available to the Company for any violation of
this Section 10(c), you agree to immediately remit and
disgorge to the Company any and all payments paid or payable
to you in connection with or as a result of engaging in
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any of the above acts. In the event that you are required
to make disclosure under any court order, subpoena or other
judicial or governmental administrative process, you will
promptly notify the Company, take all reasonable steps (at
the Company's expense) requested by the Company to defend
against the compulsory disclosure and permit the Company to
participate with counsel of its choice and at its expense in
any proceeding relating to the compulsory disclosure. You
acknowledge that all information the disclosure of which is
prohibited by this Section is of a confidential and
proprietary character and of great value to the Company.
(d) Nothing in this Agreement is intended to prevent you from
(x) using on your behalf your general knowledge or
experience in any area of professional activity, whether or
not involving your service with the Company; (y) referring
to and describing your performance of services for the
Company as descriptive of your abilities and qualifications
for employment or engagement by any other person; or (z)
disclosing (on a confidential basis) information concerning
the financial terms of this Agreement to your legal or tax
advisors, or members of your immediate family.
(e) Coleman agrees that it will not, and it will use its best
efforts to cause the senior executive officers and directors
of Coleman to not, at any time denigrate you, in connection
with your employment or otherwise, through adverse or
disparaging communication, written or oral, whether true or
not, including without limitation, the expression of
personal views, opinions or judgments. The preceding
sentence shall not apply to any communication or disclosure
which is required to be made by court order, subpoena or
other judicial or governmental administrative process.
(f) You agree that for a period of two years from the Severance
Date (the "Non-Compete Period"), you will not serve as an
officer, director or employee or in any other way assist the
efforts of any Significant Competitor. As used herein, the
term "Significant Competitor" shall mean any corporation,
partnership or entity (i) that competes directly against the
Company in one or more product lines with such product lines
representing at least 10% of the total sales of such
competitor, and (ii) where such competing products offered
by the Company constitute at least 10% of the total sales of
any organization unit of the Company (e.g. division or
corporate) that you have been employed at
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during the previous 24 months. Coleman acknowledges that
you expect to shortly engage in employment as the President
of Black & Decker's European Power Tool Division and we
agree that, given the present scope of those operations and
the present levels of competition, you will not at this time
be engaging in employment with a Significant Competitor as
above defined.
Notwithstanding anything above, this section shall not
prohibit you from owning not more than 5% of any publicly
traded company.
11. INVENTIONS
All inventions, whether or not patentable, conceived or developed by
you, alone or with others, during your employment by the Company are the
property of the Company and have been or will be promptly and fully disclosed by
you to the Company. You will perform all necessary acts to vest title fully to
any such invention in the Company and to enable the Company, at its expense, to
secure and maintain domestic and/or foreign patents or any other rights for such
inventions.
12. REMEDIES:
(a) You and the Company agree that disgorgement is not a
complete or adequate remedy at law and that you and the
Company will be entitled, in addition to any other right and
remedy you or it may have at law or in equity related to
breaches of this Agreement, including, without limitation,
disgorgement, to an injunction, without the posting of any
bond or other security, enjoining or restraining you or the
Company from any violation or threatened violation thereof.
(b) Without denigrating the importance or materiality of the
other provisions of this Agreement, you acknowledge and
agree that the provisions of Sections 9, 10 and 11 are
material and any breach of them would be a material breach
of this Agreement and shall, in addition to claims for
damages and any other remedy available under this Agreement,
cause a recoupment and/or forfeiture of past and future
payments under Section 1(b), all without abrogating the
release granted herein.
13. NO ADMISSIONS:
Neither this Agreement nor any actions taken pursuant to them shall in
any event be construed as or deemed to be evidence of an admission or concession
by any
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party on any matter leading up to this Agreement. In addition, neither
the fact of this Agreement nor any of its provisions shall be offered or
received in evidence in any action or proceeding as an admission or concession
of liability or wrongdoing by any party or for any other purpose.
14. NON-WAIVER OF VESTED OR LEGAL RIGHTS; NON-RETALIATION:
In the event you do not sign this Agreement, you should understand
that you will still receive the benefits to which you are legally entitled under
the Company's benefit plans and/or applicable law (like COBRA).
15. ADDITIONAL ACKNOWLEDGMENTS; LIMITED REVOCATION:
(a) You acknowledge that you have been given twenty-one (21)
days from the date of receipt of this Agreement to consider
this Agreement. You acknowledge that you have read this
Agreement carefully, have been advised to consult an
attorney and any other advisors of your choice, and fully
understand that by signing below you are giving up certain
rights which you may have to sue or assert a claim against
the Company. You acknowledge that you have not been forced
or pressured in any manner whatsoever to sign this Agreement
and you agree to all of its terms voluntarily.
(b) You shall have seven days from the date of this Agreement to
revoke the release (the "ADEA Release") you are giving in
Section 9(a) and (b), but only to the extent it relates to
any claim you may have arising under the Age Discrimination
in Employment Act of 1967, as amended ("ADEA"). If you
revoke such release, you will be deemed not to have released
any claim arising under ADEA, you shall not be entitled to
the payments described in Section 2(a).
16. ENFORCEABILITY:
In the event that any provision of this Agreement is determined to be
invalid or unenforceable, the remaining terms and conditions of this Agreement
shall be unaffected and shall remain in full force and effect. In addition, if
any provision is determined to be invalid or unenforceable due to its duration
and/or scope, the duration and/or scope of such provision, as the case may be,
shall be reduced, such reduction to be to the smallest extent necessary to
comply with applicable law, and such provision shall be enforceable, in its
reduced form, to the fullest extent permitted by applicable law.
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17. INDEMNIFICATION:
Except as provided otherwise in this Agreement, Coleman shall
indemnify you to the fullest extent permitted by applicable law and the existing
By-Laws and Certificate of Incorporation of Coleman, against all costs, charges
and expenses whatsoever ("Losses") incurred or sustained by you in connection
with any action, suit or proceeding to which you may be made a party by reason
of your having been a director, officer or employee of the Company. If any
greater indemnification rights shall be provided under any change in Coleman's
By-Laws or Certificate of Incorporation, you shall be entitled to such greater
rights to the same extent as other directors, officers or employees who had
terminated their relationship with Coleman on or before June 30, 1997. You
shall hold the Company harmless against all Losses which arise out of any claims
by your spouse or any beneficiary relating to payment or benefit obligations
released or waived pursuant to this Agreement.
18. TAXATION:
You shall be responsible for the payment of any and all required
federal, state, local and foreign taxes incurred, or to be incurred, in
connection with any amounts payable to you under this Agreement. All payment
amounts specified herein are gross amounts prior to the application of any
legally required withholdings for taxes or otherwise.
19. FURTHER ACKNOWLEDGMENTS:
You agree to execute such further documents evidencing the termination
of your employment by, and directorships of, the Company as may be reasonably
requested by the Company, including a letter substantially in the form of
Attachment A.
20. NOTICES:
Any notice required or desired to be delivered under this Agreement
shall be in writing and shall be delivered personally, by courier service or by
registered mail, return receipt requested, and shall be effective upon actual
receipt by the party to which such notice shall be directed, and shall be
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof):
If to the Company, to:
The Coleman Company, Inc.
625 Madison Avenue
New York, NY 10022
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Attention: Mr. Terry C. Bridges
And if to you, to the address set forth on the first page of this
Agreement.
If Coleman gives notice to you that the provisions of this paragraph
shall apply: you agree that you will not communicate with the Company for any
reason, directly or indirectly, including, if necessary, any notice of stock
option exercise, except by notice to the Company, Attention: Mr.
Terry C. Bridges and all such notices shall be sent marked "Confidential", and a
telefacsimile copy thereof shall be sent the same date to Robert C. Fleder,
Esq., Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New
York, New York, 10019, (212) 757-3000.
21. ENTIRE AGREEMENT:
This Agreement supersedes any and all other agreements between you and
the Company and/or any other persons relating to your employment by the Company,
including, but not limited to, the Employment Agreement effective as of May 1,
1996 between you and Coleman, including the First and Second Amendments thereto
each dated August 1, 1996, whether written or oral, between the parties with
respect to the subject matter hereof and contains all of the agreements between
the parties with respect thereto. You, your spouse and beneficiaries are not
eligible for any benefits from the Company including, but not limited to,
severance benefits, except as specifically provided for herein.
22. NO ORAL MODIFICATION:
This Agreement may not be modified or changed orally and may be
modified and changed only by a written instrument executed by you and Coleman.
23. STATE LAW:
This Agreement will be construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflict of laws.
24. RESOLUTIONS OF DISPUTES:
Any disputes arising under or in connection with your employment with
the Company, or this Agreement shall be resolved by binding, confidential
arbitration to be held in Wichita, Kansas in a confidential, closed session in
accordance with the rules and procedures of the American Arbitration
Association. The arbitrators may assess expenses, including reasonable
attorneys' fees, to either or both parties, taking into account the
circumstances of the case. Except as assessed by the arbitrator pursuant to the
previous
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sentence, each party shall bear its own expenses, including attorneys'
fees, in connection with any such dispute.
25. COUNTERPARTS; FACSIMILE SIGNATURES:
This Agreement may be executed in counterparts, each of which shall be
considered part of the same Agreement. Signatures to this Agreement may be
supplied by telefacsimile signature, which shall be considered an original
signature for purposes hereof.
Very truly yours,
THE COLEMAN COMPANY, INC.
By: Jerry W. Levin
------------------------------------
Jerry W. Levin, Its Duly Authorized
Chief Executive Officer
Encl.
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I have read this letter Agreement and I understand all of its terms.
I enter into and sign this AGREEMENT knowingly and voluntarily, with full
knowledge of what it means.
Frederik van den Bergh
-------------------------------------------
Mr. Frederik van den Bergh
I have read this letter Agreement and I understand all of its terms,
including without limitation my waiver of COBRA rights under Section 5 and my
nondisclosure obligations under Section 10(c).
Erica van den Bergh
-------------------------------------------
[Spouse]
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Attachment A
June 11, 1997
CONFIDENTIAL
Jerry W. Levin
The Coleman Company, Inc.
1526 Cole Boulevard, Suite 300
Golden, Colorado 80401
Dear Jerry:
Effective as of June 30, 1997, I hereby resign from all of my
positions as director, officer and/or employee of The Coleman Company, Inc., and
all of their subsidiaries and affiliates.
Sincerely,
Frederik van den Bergh
--------------------------------
Frederik van den Bergh
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Attachment B
June 11, 1997
CONFIDENTIAL
Jerry W. Levin
The Coleman Company, Inc.
1526 Cole Boulevard, Suite 300
Golden, Colorado 80401
Dear Jerry:
The undersigned hereby acknowledge that (i) we have been provided with
notice of our rights to continue medical coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and any similar state law
("COBRA"), (ii) we understand these rights, (iii) we have consulted our legal
and tax advisors to the extent we have desired to do so and (iv) we voluntarily
waive our rights under COBRA. We understand that by making this election our
coverage under Coleman's group medical program applicable to active executive
employees will cease, except as provided in Section 5 of the Agreement dated as
of June __, 1997, between Frederik van den Bergh and The Coleman Company, Inc.
and that after such coverage ceases, we will not have any continuation coverage
rights under COBRA.
Sincerely,
Frederik van den Bergh
----------------------------------
Frederik van den Bergh
Erica van den Bergh
----------------------------------
(Spouse)