SEPARATION AGREEMENT AND
GENERAL RELEASE
THIS SEPARATION
AGREEMENT AND RELEASE (this “Agreement”) made as of
September 18, 2008 by and among Ames True Temper, Inc. (the
“Company”), Richard C. Dell (“Executive”),
and, solely for the purpose of Section 5 of this Agreement,
CHATT Holdings, LLC (“CHATT LLC”).
WHEREAS, Executive
entered into the Employment Agreement dated June 28, 2004 with
the Company (the “Employment Agreement”);
WHEREAS, Executive
entered into the Confidentiality, Inventions, Non-Competition and
Non-Solicitation Agreement with the Company (the “Restrictive
Covenant Agreement”), which was an exhibit to the Employment
Agreement;
WHEREAS, the
parties desire to set forth their respective rights and obligations
in respect of the Executive’s voluntary retirement from, and
the termination of Executive’s employment with, the
Company;
NOW THEREFORE, in
consideration of the covenants and conditions set forth herein, the
parties, intending to be legally bound, agree as
follows:
(a) Executive’s
employment with Company will terminate effective on
September 27, 2008 (the “Separation Date”). In
addition, as of the Separation Date, Executive will be deemed to
have resigned from all positions, including all officer, director
and board positions, he held with the Company and/or its
affiliates, including the Released Parties (as defined below),
including his position as a member of the Management Committee of
CHATT LLC, without any further action of any other person or
entity. Notwithstanding the foregoing, Executive shall not resign
as of the Separation Date from the Board of Directors of CHATT
LLC.
(b) Executive
represents and warrants that as of the date he executes this
Agreement (the “Execution Date”), he has complied with
his obligation pursuant to Paragraph 3 of the Restrictive
Covenant Agreement to return all Company property in his
possession. After giving effect to such return obligation,
Executive represents and warrants that he has no Company property
in his possession, custody or control.
(c) Except
as specifically provided below, Executive shall not be entitled to
receive any compensation or benefits from the Company or its
affiliates following the Separation Date.
2.
Salary, Vacation and Expenses .
(a) The
Company shall pay to Executive his (i) accrued but unpaid base
salary, (ii) a bonus for the fiscal year ending
September 27, 2008 in an amount to be determined by the
Compensation Committee of CHATT LLC in accordance with its
past
1
practices and
payable in accordance with the Company’s regular payroll
practices with respect to bonuses, and (iii) accrued but
unused vacation as of the Separation Date, if any, less applicable
withholdings and in accordance with the Company’s regular
payroll practices;
(b) The
Company shall reimburse Executive for expenses for which Executive
is entitled to reimbursement pursuant to the Company’s
regular reimbursement policy and/or practice as of the Separation
Date, if any, payable in accordance with the Company’s
regular payroll practices.
3.
Consideration of Company . In consideration for the releases
and covenants by Executive set forth in this Agreement and
contingent upon Executive’s compliance with this Agreement,
Company will provide Executive with payment in an amount equal to
$452,000 per year, which amount includes a payment of $37,000 per
year to cover Executive’s cost of obtaining health coverage,
over the three-year period commencing on the first regular salary
payment date of the Company after the Effective Date (as defined
herein) of this Agreement (the “Severance Period”),
less applicable withholdings, payable at the Company’s
regular payroll intervals in as nearly equal installments as is
practicable (the “Severance Payments”). Notwithstanding
the foregoing, if Executive elects COBRA continuation coverage
after the Separation Date pursuant to Section 4 of this
Agreement, his annual Severance Payment during the period he is
receiving COBRA continuation coverage shall be $415,000.
4.
Benefits . Executive’s participation in all Company
benefit plans and programs shall cease on the Separation Date.
After the Separation Date, Employee will have the right to health
plan continuation coverage, to the extent such coverage is required
to be made available under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended (“COBRA”). If
Employee elects such COBRA coverage, Executive shall continue to
pay the active-employee rate of contribution for such coverage, and
the Company shall pay the balance of the cost of such
coverage.
5.
Equity . Except as provided herein, the Unitholders
Agreement, dated as of June 28, 2004, between CHATT LLC,
Executive, and other entities and individuals (the
“Unitholders Agrement”) and the Amended and Restated
Operating Agreement of CHATT Holdings, LLC, dated as of
June 28, 2004, shall continue to control Executive’s
rights and obligations with respect to his Units (as defined in the
Unitholders Agreement). Notwithstanding the foregoing, CHATT LLC
agrees that it will not exercise its right to repurchase
Executive’s Units pursuant to Paragraph 11 of the
Unitholders Agreement, provided , however , that if
Executive breaches his obligations pursuant to Section 9 of
this Agreement, CHATT LLC shall have the right to repurchase
Executive’s Units at the lower of the original purchase price
or Fair Market Value (as defined in the Unitholders Agreement)
thereof as of the date of such breach(es) (the “Repurchase
Right”). Notwithstanding the foregoing, the breach(es)
described in the foregoing sentence shall not trigger CHATT
LLC’s Repurchase Right unless Executive fails to cure such
breach(es), to the extent capable of cure, within thirty
(30) days after receipt from the Company of written notice of
the act(s) that constitute a breach of Section 9 of this
Agreement.
6.
Executive Release of Rights . Executive (defined for the
purpose of this Section 6 as Executive and Executive’s
agents, representatives, attorneys, assigns, heirs, executors, and
administrators) irrevocably, fully, and unconditionally releases
the Released
2
Parties
(defined as the Company, ATT Holding Co., CHATT Holdings, Inc.,
CHATT LLC, Castle Harlan Partners IV, L.P.
|
