EXHIBIT 10.69
SEVERANCE AND CHANGE IN CONTROL AGREEMENT
SEVERANCE AND CHANGE IN CONTROL
AGREEMENT dated June 27 2008, by and between SMITH
& WESSON HOLDING CORPORATION , a Nevada corporation
(“Employer”), and William F. Spengler
(“Employee”).
WHEREAS , Employer desires to
engage Employee as Executive Vice President and Chief Financial
Officer of Employer.
WHEREAS , Employer and
Employee desire to agree to the results of any termination of
Employee’s employment under certain circumstances.
NOW, THEREFORE , in
consideration of the premises and of the mutual covenants set forth
in this Agreement, the parties hereto agree as follows:
1. Definitions .
(a)
“ 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; Employee taking any action that may be
injurious to the business or reputation of Employer; 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.
(b)
“ Change in Control ” of Employer shall mean a
change in control of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act
of 1934 as in effect on the date of this Agreement or, if Item 6(e)
is no longer in effect, any regulations issued by the Securities
and Exchange Commission pursuant to the Securities Exchange Act of
1934 that serve similar purposes; provided that, without
limitation, such a Change in Control shall be deemed to have
occurred if and when (i) any person (as such term is used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) directly
or indirectly of equity securities of Employer representing
20 percent or more of the combined voting power of
Employer’s then-outstanding equity securities, except that
this provision shall not apply to any person currently owning at
least five percent or more of the combined voting power of
Employer’s currently outstanding equity securities or to an
acquisition of up to 20 percent of the then-outstanding voting
securities that has been approved by at least 75 percent of
the members of the Board of Directors who are not affiliates or
associates of such person; (ii) during the period of this
Agreement, individuals who, at the beginning of such period,
constituted the Board of Directors of Employer (the “Original
Directors”), cease for any reason to constitute at least a
majority thereof unless the election or nomination for election of
each new director was approved (an “Approved Director”)
by the vote of a Board of Directors constituted entirely of
Existing Directors and/or Approved Directors; (iii) a tender
offer or exchange offer is made whereby the effect of such offer is
to take over and control Employer, and such offer is consummated
for the equity securities of Employer representing 20 percent
or more of the combined voting power of
Employer’s then-outstanding voting securities;
(iv) Employer is merged, consolidated, or enters into a
reorganization transaction with another person and, as the result
of such merger, consolidation, or reorganization, less than
75 percent of the outstanding equity securities of the
surviving or resulting person shall then be owned in the aggregate
by the former stockholders of Employer; or (v) Employer
transfers substantially all of its assets to another person or
entity that is not a wholly owned subsidiary of Employer. Sales of
Employer’s Common Stock beneficially owned or controlled by
Employee shall not be considered in determining whether a Change in
Control has occurred.
2. 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 pro rata 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.
3. Termination Following
Change in Control. In the event of a “Change in
Control” of Employer, Employee, at Employee’s option
and upon written notice to Employer, may terminate Employee’s
employment effective on the date of the notice with the same force
and effect as if such termination were other than for Cause as
provided in Section 2 above, except that the 12-month period
shall be 18 months, unless (A) the Change in Control
shall have been approved by the Board of Directors of the Company,
(B) the provisions of this Agreement remain in full force and
effect as to Employee and (C) Employee suffers no reduction in
Employee’s status, duties, authority, or compensation
following such Change in Control, provided that Employee will be
considered to suffer a reduction in Employee’s status,
duties, authority, or if, after the Change in Control,
(i) Employee is not the chief financial officer of the company
that succeeds to the business conducted by Employer and its
subsidiaries immediately prior to the Change in Control,
(ii) such company’s common stock is not listed on a
national stock exchange (such as the New York Stock Exchange, the
Nasdaq National Market, or the American Stock Exchange),
(iii) such company terminates Employee or reduces
Employee’s status, duties, authority, or compensation within
one year of the Change in Control, or (iv) as a result of such
Change in Control Employee is required to relocate out of either
Springfield, Massachusetts (or surrounding areas) or Washington,
D.C. (or surrounding areas).
4. Competition and
Confidential Information.
(a)
Interests to be Protected. The parties acknowledge that
Employee will perform essential services for Employer, its
employees, and its stockholders during the term of Employee’s
employment with Employer. Employee will be exposed to, have access
to, and work 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
2
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 of Employee’s employment with Employer
for any reason, 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
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