Exhibit 10(g)
February 11, 2002
T. Keith Moone
9054 E. Washington
Chagrin Falls, Ohio 4402
Revised February 21, 2002
Dear Keith:
This letter will serve as a Separation Agreement between Royal Appliance Mfg.
Co., its subsidiaries and affiliated companies collectively referred to as the
Company and you, which is being offered to you, due to the elimination of your
position.
1. SEPARATION PAY
--------------
You will receive separation pay at a semi-monthly rate of $7708.34, plus
$387.50 for car and phone allowance, starting February 15, 2002 through
February 15, 2003. Payments will be made on a regular basis for the gross
amount of your salary with appropriate deductions for federal, state and
local taxes, social security contribution, health care contributions, and
other deductions required by federal, state, or local law. If you obtain
employment elsewhere during this period you will be eligible to receive
the remaining amount of this separation pay in a lump sum less all
applicable taxes and deductions within 30 days of notifying me and
starting employment elsewhere. If you have not obtained employment
elsewhere ( to include, but not limited to; direct employee, independent
sales rep, consulting arrangements over 80 hours per month and business
ventures) by February 15, 2003, your semi-monthly rate of $7708.34 will
be continued, until the earlier of starting employment elsewhere or
February 15, 2004.
2. OTHER PAY
---------
You will receive a lump sum payment of $89,500, subject to applicable
federal, state and local deductions, as consideration for 2001 and 2002
incentives and awards and forfeiture of all outstanding stock options and
phantom stock rights, within 30 days of signing this agreement. The
Company will reimburse you for legal fees incurred as a result of
reviewing this agreement of up to $2,000.
3. GROUP MEDICAL BENEFITS
----------------------
You will continue to receive coverage under the provisions of the Royal
Appliance Group Medical Coverage Plan through Royal paying the COBRA
through August 15, 2003, or until benefits become effective at another
employer, whichever comes first, on the same terms and conditions as
presently provided by Royal Appliance. At that time, you will be entitled
under COBRA to continue coverage for up to an additional 6 months
provided that you pay the cost of the premium at the time that you elect
to continue coverage. Further information regarding your COBRA rights
will be sent to you at a later date.
Page 2 of 4
4. SAVINGS PLANS
--------------
You are fully vested in the Royal Appliance 401(k) Savings Plan and
401(k) Plus Plan. You will be entitled to keep your investments in the
Plans or withdraw them according to the provisions of the Plans. Please
understand that separation payments are not eligible for continued
contributions to these Plans.
5. LIFE, STD, LTD INSURANCE
------------------------
Your life insurance coverage will continue through August 15, 2002, or
when benefits become effective at another employer, whichever comes
first. You may convert your life insurance to an individual policy within
30 days of the expiration of your life insurance coverage. Short Term
Disability and Long Term Disability insurances will discontinue after
February 15, 2002.
6. UNEMPLOYMENT COMPENSATION
-------------------------
You may be eligible for Unemployment Compensation and application should
be made with your local unemployment insurance office.
7. DATE OF TERMINATION
-------------------
Your employment with Royal Appliance Mfg. Co. will be terminated
effective February 15, 2002.
8. VACATION
--------
You will be paid for 132 hours vacation pay based on 96 hours of unused
vacation pay for the current vacation year and 36 hours of banked
vacation. This payment will be made within 30 days of signing this
agreement.
9. PROFESSIONAL OUTPLACEMENT
-------------------------
You are eligible to receive professional outplacement assistance through
a professional firm contracted by the Company. This will be guaranteed
for 6 months and will be extended on a monthly basis if needed.
10. NON-COMPETE AND CONFIDENTIALITY
-------------------------------
By accepting these payments and in consideration of all other benefits
offered to you, you agree that you will not compete with Royal Appliance
Mfg. Co., it's parent company, it's affiliated companies and it's
subsidiaries without the express written consent of the Company. This
includes but is not limited to employment with or consulting with any
company, firm, person or entities which competes directly or indirectly
with Royal Appliance Mfg. Co. or entering into business as an owner, sole
proprietor or representative which competes directly or indirectly with
Royal Appliance Mfg. Co. This agreement not to compete will be in effect
until February 15, 2003.
By signing this agreement and accepting these payments, you agree not to
disclose the terms of the separation agreement, except to members of your
immediate family, accountant, attorney, or as otherwise required by law.
You also agree that you will not make or publish any negative comments or
disparaging remarks concerning Royal Appliance Mfg. Co., its employees,
officers, suppliers and customers.
11. TRADE SECRETS
-------------
You acknowledge that as an employee of Royal you executed a Technical
Information and Non-Competition Agreement and you hereby reaffirm the
validity of and continue to abide by. Said Agreement is expressly
incorporated herein by reference. You are obligated not to reveal,
disclose, sell, provide, submit or otherwise make known the trade secrets
of Royal Appliance Mfg. Co. Trade secrets include but are not limited to
designs, discoveries, improvements, innovations and ideas, whether or not
patented or patentable, relating to any part of the business or
activities of the Company including, without limitation, present, novel
or improved products, processes, machines, methods of manufacturing,
promotional and advertising materials or schemes and other manufacturing
and sales techniques.
Page 3 of 4
TRADE SECRETS (CONTINUED)
-------------------------
Trade secrets also include the confidential information of the Company
which includes but is not limited to the Company's products, sales
methods, customer terms, co-op agreements, customer lists, customer
pricing, supplier pricing, customer usages, manufacturing procedures,
manufacturing distribution processes, policies and practices of the
Company, equipment, costs of production and overhead, compositions,
technology, formulas, know-how, research and development programs,
financial information, blueprints, drawings, drafts or other written and
electronic material of the Company.
12. RELEASE OF ALL CLAIMS
---------------------
By signing this Agreement, and by accepting the payments set forth above,
you agree to release and discharge and forever forego any claims,
demands, suits, causes of action or other legal rights which you have or
may have against Royal Appliance Mfg. Co., its employees, agents, owners,
directors, officers or other representatives which presently exist as a
result of your employment with the Company or as the result of your
termination from your employment with the Company. These claims include,
but are not limited to, claims under the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act, the
Older Workers Benefits Protection Act, the Americans with Disabilities
Act, the Ohio Anti-Discrimination Statutes and any other claim for breach
of contract, express or implied and any claim under any state or federal
statute or regulation. By signing this agreement, you also acknowledge
that you have received additional monetary consideration for waiver of
any claims that you may have under the Older Workers Benefits Protection
Act and the Age Discrimination in Employment Act. Under these acts you
are advised of your right to consult with an attorney prior to the
execution of this agreement and have at least twenty one (21) days from
the date of this letter to consider the separation agreement. You further
are advised that you have seven (7) days following the execution of the
separation agreement to revoke the agreement and the separation agreement
shall not become effective and enforceable until the revocation period
has expired. Your acceptance of this letter will serve as your
acknowledgment of the receipt of and the acceptance of the consideration
described in paragraphs one through ten above in complete and final
settlement as full compensation for any claims or damages of whatever
nature suffered by you in connection with your employment with and
termination by Royal Appliance Mfg. Co. You understand and agree that
this release will be considered to be final and shall be a complete bar
to any legal or equitable action which might be brought by you in
connection with your employment with the Company and your termination
from the Company.
Any breach by you of any term or condition of this letter or any contract that
you may have with the Company will release the Company from any further
liability to make the payments referred above, or provide benefits described
above except as required by law but will not otherwise release you from your
obligations under this agreement. Furthermore, you agree that a breach of any of
the conditions of this agreement will result in irreparable and continuing
damage to Royal for which there will be no adequate remedy at law. If you breach
any of the provisions of this agreement, Royal shall be entitled to injunctive
relief in addition to all other remedies available at law or in equity.
You are advised of your right to consult with an attorney prior to the execution
of this agreement. This offer will remain open until 5:00 p.m., March 5, 2002.
This letter is presented to you in duplicate. After a full review of the letter,
if you are in full agreement with the terms of the letter, sign the letter and
return one (1) copy of the letter to me to indicate that you have read and
understood the agreement, that you are in full agreement with the terms of the
separation agreement and that your signature is voluntary and given in return
for the payments outlined above.
Page 4 of 4
Please call me at (440) 996-2000 or Tim Araps at (440) 996-2000, if you have any
questions. Thank you.
Date:
- -------------------------------- ----------------------
Michael J. Merriman
I have received, read and understood the terms of the above agreement. I fully
agree with the terms of the agreement and my signature is voluntary given.
Date:
- -------------------------------- ----------------------
T. Keith Moone