1
RELEASE AND INDEMNITY
AGREEMENT
THIS RELEASE AND INDEMNITY AGREEMENT (the "Agreement") is made and entered
into as of this 21st day of November, 1997, by and between Young America
Corporation (the "Company"), Jay F. Ecklund, an individual resident of the State
of Florida ("Principal Stockholder"), the John F. Ecklund 1995 Irrevocable
Trust, the Sheldon McKensie Ecklund 1995 Irrevocable Trust, the John F. Ecklund
1997 Irrevocable Trust, the Sheldon McKensie Ecklund 1997 Irrevocable Trust, the
Jay F. Ecklund 1997 Irrevocable Annuity Trust (together with the Principal
Stockholder, the "Selling Stockholders") and each of Albert 0. Foster, Jerome J.
Jenko, Thomas 0. Moe and R. Gary St. Marie, the independent directors on the
Company's Board of Directors (collectively, the "Independent Directors").
WHEREAS, the Company plans to enter into that certain Recapitalization
Agreement ("Recapitalization Agreement") by and among the Company, the Selling
Stockholders and BT Capital Partners, Inc.; and
WHEREAS, the Independent Directors have no financial interest in the
transactions contemplated by the Recapitalization Agreement and, in light
thereof, the Company and the Selling Stockholders have agreed to release the
Independent Directors from any claims that either party may have against the
Independent Directors under Minnesota law or otherwise in connection with their
service as directors (except certain excluded claims specified below).
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company, the Selling
Stockholders and the Independent Directors agree as follows:
1. The Company and the Selling Stockholders hereby agree, for themselves
and their successors and assigns, to fully and completely release and waive any
and all claims, complaints, rights, causes of action or demands of whatever
kind, whether known or unknown (collectively, a "Claim"), which the Company or
the Selling Stockholders have or may have against the Independent Directors and
their heirs, successors and assigns (hereinafter collectively called the
"Released Parties") arising out of or relating to any actions, conduct,
promises, decisions, statements, behavior or events occurring at any time prior
to the effective time of the resignation of the Independent Directors including,
without limitation, any Claim alleging a breach of the duty of due care or good
faith; provided, however, that this release shall not apply to any Claim
alleging a breach of the duty of loyalty, self dealing, bad faith, intentional
misconduct or fraud ("Excluded Claims").
2
2. The Principal Stockholder hereby agrees to indemnify and hold the
Independent Directors harmless from and against any loss, cost, liability,
charge or expense (including reasonable attorneys' fees and expenses),
judgments, fines, and amounts paid in settlement resulting from or relating to
any actions, conduct, promises, decisions, statements, behavior or events
occurring at any time prior to the effective time of the resignation of the
Independent Directors (other than those arising out of or relating to any
Excluded Claims).
3. The parties agree that this Agreement shall not affect in any way the
rights of the Independent Directors to (a) indemnification from the Company
under applicable law, the Company's Articles of Incorporation, as amended, the
Company's Bylaws, as amended, or any other agreement, contract or right existing
between the Independent Directors and the Company, and (b) any rights under
directors and officers insurance policies maintained by the Company from time to
time.
4. Each Independent Director hereby agrees, for himself and his successors
and assigns, to fully and completely release and waive any and all claims,
complaints, rights, causes of action, or demands of whatever kind, whether known
or unknown, which such Independent Director has or may have against the Company
for payment of directors' fees or other compensation for services rendered.
5. This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the laws of the State of
Minnesota, without giving effect to the conflicts of laws provisions thereof.
6. This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which counterpart,
when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, shall constitute one and the same amendment.
7. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by written
amendment signed by the parties hereto.
2
3
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
YOUNG AMERICA CORPORATION
By /s/ Charles D. Weil
---------------------------------
Its President
------------------------------
/s/ Jay F. Ecklund
------------------------------------
Jay F. Ecklund
JOHN F. ECKLUND 1995
IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
SHELDON MCKENSIE ECKLUND
1995 IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
4
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
YOUNG AMERICA CORPORATION
By /s/ Charles D. Weil
---------------------------------
Its President
------------------------------
/s/ Jay F. Ecklund
------------------------------------
Jay F. Ecklund
JOHN F. ECKLUND 1995
IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By /s/ Charles M. Thompson
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
SHELDON MCKENSIE ECKLUND
1995 IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By /s/ Charles M. Thompson
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
5
JOHN F. ECKLUND 1997
IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By /s/
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
SHELDON MCKENSIE ECKLUND
1997 IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By /s/
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
JAY F. ECKLUND 1997
IRREVOCABLE ANNUITY TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
6
JOHN F. ECKLUND 1997
IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By /s/ Charles M. Thompson
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
SHELDON MCKENSIE ECKLUND
1997 IRREVOCABLE TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
By /s/ Charles M. Thompson
---------------------------------
Charles M. Thompson, as Trustee
of the Trust and not individually
JAY F. ECKLUND 1997
IRREVOCABLE ANNUITY TRUST
By /s/ William J. Berens
---------------------------------
William J. Berens, as Trustee of
the Trust and not individually
7
THE INDEPENDENT DIRECTORS
/s/ Albert 0. Foster
---------------------------------
Albert 0. Foster
/s/ Jerome J. Jenko
---------------------------------
Jerome J. Jenko
/s/ Thomas O. Moe
---------------------------------
Thomas O. Moe
/s/ R. Gary St. Marie
---------------------------------
R. Gary St. Marie