SEVERANCE AGREEMENT dated the 25 th day of September 2008, by and between
SMITH & WESSON HOLDING CORPORATION , a Nevada
corporation (“Employer”), and Leland A. Nichols
(“Employee”).
WHEREAS , Employee is an executive officer and a valued
employee of Employer.
WHEREAS , Employer and Employee desire to agree to the
results of any termination of Employee’s employment by
Employer other than for cause.
NOW, THEREFORE , in consideration of the premises and of the
mutual covenants set forth in this Agreement, the parties hereto
agree as follows:
1.
Result of Termination Other than for Cause . In the event
that Employer terminates Employee’s employment with Employer
other than for cause, (a) Employer shall pay Employee’s
base salary for a period of 12 months following such
termination, (b) Employer shall pay to Employee, at the same
time as bonuses are paid to Employer’s other executives, a
portion of the bonus earned by Employee for the period commencing
on the first day of the fiscal year for which the bonus is
calculated and ending on the date of termination; and (c) all
unvested stock-based compensation held by Employee shall vest as of
the date of termination. As used herein, “cause” shall
mean any termination of Employee’s employment by Employer as
a result of Employee engaging in an act or acts involving a crime,
moral turpitude, fraud, or dishonesty, or Employee willfully
violating in a material respect Employer’s Corporate
Governance Guidelines, Code of Conduct, or any applicable Code of
Ethics, including, without limitation, the provisions thereof
relating to conflicts of interest or related party
transactions.
2.
Competition and Confidential Information .
(a)
Interests to be Protected . The parties acknowledge that
Employee performs essential services for Employer, its employees,
and its stockholders during the term of Employee’s employment
with Employer. Employee is exposed to, has access to, and works
with, a considerable amount of Confidential Information (as defined
below). The parties also expressly recognize and acknowledge that
the personnel of Employer have been trained by, and are valuable
to, Employer and that Employer will incur substantial recruiting
and training expenses if Employer must hire new personnel or
retrain existing personnel to fill vacancies. The parties expressly
recognize that it could seriously impair the goodwill and diminish
the value of Employer’s business should Employee compete with
Employer in any manner whatsoever. The parties acknowledge that
this covenant has an extended duration; however, they agree that
this covenant is reasonable and it is necessary for the protection
of Employer, its stockholders, and employees. For these and other
reasons, and the fact that there are many other employment
opportunities available to Employee if his employment is
terminated, the parties are in full and complete agreement that the
following restrictive covenants are fair and reasonable and are
entered into freely, voluntarily, and knowingly. Furthermore, each
party was given the opportunity to consult with independent legal
counsel before entering into this Agreement.
(b)
Non-Competition . For the period equal to 12 months
after the termination by Employer of Employee’s employment
with Employer other than for cause, Employee shall not (whether
directly or indirectly, as owner, principal, agent, stockholder,
director, officer, manager, employee, partner, participant, or in
any other capacity) engage or become financially interested in any
competitive business conducted within the Restricted Territory (as
defined below). As used herein, the term “competitive
business” shall mean any business that sells or provides or
attempts to sell or provide products or services the same as or
substantially similar to the products or services sold or provided
by Employer during Employee’s employment, and the term
“Restricted Territory” shall mean any state or other
geographical in which Employer sells products or provides services
during Employee’s employment.
(c)
Non-Solicitation of Employees . For a period of
24 months after the termination by Employer of
Employee’s employment with Employer other than for cause,
Employee shall not directly or indirectly, for Employee, or on
behalf of, or in conjunction with, any other person, company,
partnership, corporation, or governmental entity, solicit for
employment, seek to hire, or hire any person or persons who is
employed by or was employed by Employer within 12 months of
the termination of Employee’s employment for the purpose of
having any such employee engage in services that are the same as or
similar or related to the services that such employee provided for
Employer.
(d)
Confidential Information . Employee shall maintain in strict
secrecy all confidential or trade secret information relating to
the business of Employer (the “Confidential
Information”) obtained by Employee in the course of
Employee’s employment, and Employee shall not, unless first
authorized in writing by Employer, disclose to, or use for
Employee’s benefit or for the benefit of, any person, firm,
or entity at any time either during or subsequent to the term of
Employee’s employment, any Confidential Information, except
as required in the performance of Employee’s duties on behalf
of Employer. For purposes hereof, Confidential Information shall
include without limitation any materials, trade secrets, knowledge,
or information with respect to management, operational, or
investment policies and practices of Employer; any business methods
or forms; any names or addresses of customers or data on customers
or suppliers; and any business policies or other information
relating to or dealing with the management, operational, or
investment policies or practices of Employer.
(e)
Return of Books, Records, Papers, and Equipment . Upon the
termination of Employee’s employment with Employer for any
reason, Employee shall deliver promptly to Employer all files,
lists, books, records, manuals, memoranda, drawings, and
specifications; all cost, pricing, and other financial data; all
other written or printed materials and computers, c
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