SEPARATION AND RELEASE AGREEMENT
THIS AGREEMENT is effective the 25th day of July 2002, by and between Graco
Inc., a Minnesota corporation ("Graco"), with its principal offices at 00 00xx
Xxx. X.X., Xxxxxxxxxxx, Xxxxxxxxx, 00000, and Xxxxxxx X. Xxxxxx, an individual,
with a residence at 00000 Xxxxxxxx Xxx, Xxxxxxxxxx, XX. 00000 ("Xx. Xxxxxx").
WHEREAS, Xx. Xxxxxx was employed by Graco; and
WHEREAS, the parties have agreed that Xx. Xxxxxx has ceased to be an officer and
employee of Graco effective July 8, 2002, (the "Separation Date"), and will
complete and terminate his employment relationship with Graco in accordance with
the terms of this Agreement.
NOW, THEREFORE, it is hereby mutually agreed by and between the parties for good
and valuable consideration as follows:
1. Severance Payment
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Beginning on August 15, 2002 (but no sooner than the expiration of the 15
day waiting period specified in Section 7 below, whichever is later) on the
15th day of each of the next twelve months Graco will pay to Xx. Xxxxxx, in
monthly installments of $13,433.33 each, the aggregate amount of $161,200,
which is equal to one year of his annual base salary immediately prior to
the Separation Date. Such payment shall be subject to tax withholding and
deductions required by law. At any time before the last installment is paid
Xx. Xxxxxx may request that Graco pay the entire remaining amount owed,
which Graco will do on the next regular payment date.
2. Stock Options and Restricted Stock Grant
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All stock options and restricted stock granted to Xx. Xxxxxx under the
Graco Long Term Incentive Plan or Graco Stock Incentive Plan shall be
governed by the provisions of said plans and the agreements executed
between Graco and Xx. Xxxxxx pursuant to said plans.
3. Insurance Premiums
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For a period not to exceed 12 months following the Separation Date, Graco
shall, if Xx. Xxxxxx so chooses, continue to cover Xx. Xxxxxx under its
standard medical and dental insurance coverages for employees to the same
extent as Xx. Xxxxxx was covered immediately prior to the Separation Date,
and Xx. Xxxxxx shall pay to Graco, monthly by check, an amount equal to the
employee paid portion of the premium for such insurance. In the event that
Xx. Xxxxxx has or acquires comparable insurance coverage through a new
employer or spouse coverage, Xx. Xxxxxx shall so notify Graco and the
coverage under the Graco plans provided herein shall cease.
4. Outplacement Assistance
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Graco shall provide an outplacement agency that may be used by Xx. Xxxxxx
to seek other employment, for a period not to exceed one (1) year or upon
Xx. Xxxxxx securing other employment, whichever first occurs. Said agency
shall be mutually agreed upon by Graco and Xx. Xxxxxx, and the services
provided shall be customary for seeking employment at the level of the
position Xx. Xxxxxx held at Graco.
5. Cooperation
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For a period of three (3) years after the Separation Date, Xx. Xxxxxx shall
render all reasonable cooperation to Graco in connection with the
prosecution or defense of any lawsuit or other judicial or administrative
action, including participating as a source of information or witness in
any such action. Graco shall reimburse Xx. Xxxxxx for any reasonable
out-of-pocket expenses (including attorneys' fees, if necessary) incurred
by him in connection with rendering such cooperation.
6. Confidentiality
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a. Xx. Xxxxxx hereby agrees that, for a period of three (3) years after
the Separation Date, he will not, directly or indirectly, disclose any
Confidential Information, as defined in subsection (b) below, to any
other party, and will not in any way use such Confidential Information
in the course of any future employment.
b. As used herein, the term "Confidential Information" shall mean all
information which is treated as confidential or proprietary by Graco
in the normal course of its business, including, without limitation,
documents so marked, or is a trade secret of Graco, which has been
disclosed by Graco to Xx. Xxxxxx, including, without limitation,
information relating to Graco employees, officers, directors,
products, processes, product development or research, equipment,
machinery, apparatus, business operations, financial results or
condition, strategic plans or projections, customers, suppliers,
marketing, sales, management practices, technical information,
drawings, specifications, material, and the like, and any knowledge or
information developed by Xx. Xxxxxx relating to the same, provided,
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however, that Confidential Information shall not include information
which is at the time of disclosure, or thereafter becomes, a part of
the public domain through no act or omission by Xx. Xxxxxx, or infor-
mation which Xx. Xxxxxx is required to disclose in a court or other
judicial proceeding or is otherwise legally required to disclose.
c. The provisions of this Section 6 are in addition to, and not in lieu
of, the fiduciary and other duties and obligations of Xx. Xxxxxx as an
employee and officer of Graco, and this Section 6 does not limit said
obligations in any way, by time or otherwise.
7. Release
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a. Except with respect to the provisions of this Agreement, Xx. Xxxxxx
hereby releases and forever discharges Graco and its officers,
employees, agents, successors, and assigns from any and all claims,
causes of action, demands, damages, liability and responsibility
whatsoever, arising prior to the Separation Date, including without
limitation, any rights or claims for further compensation, including
without limitation any bonus payment for the year 2002, or any rights
to participate in any Company-sponsored program relating to the
purchase or acquisition of any Graco common stock, preferred stock, or
other equity in Graco or any subsidiary thereof, except as
specifically provided in this Agreement, or any right or claim Xx.
Xxxxxx may have or assert under the common law or any state,
municipal, federal, or other statute or regulation regarding the
rights of employees generally or based on discrimination on the basis
of race, creed, gender, age, or other protected status. This Section 7
shall not affect Xx. Xxxxxx'x rights to indemnification as an officer
and employee of Graco under Graco's by-laws and applicable Minnesota
law nor any rights which he has accrued by participating in any Graco
benefit plan, subject to the provisions of this Agreement and the
terms and conditions set forth in such plan as of the Separation Date.
b. Xx. Xxxxxx certifies, represents and agrees that:
(i) this Agreement is written in a manner that he understands;
(ii) he understands that this Section 7 specifically waives any
rights or claims he may have arising under federal, state, and
local laws prohibiting employment discrimination, such as the
Age Discrimination in Employment Act, the Minnesota Human
Rights Act, Title VII of the Civil Rights Act of 1964, the
Rehabilitation Act of 1973, the Americans with Disabilities Act
and/or any claims for damages or for injuries based on common
law theories of contract, quasi-contract or tort;
(iii) the waiver herein of rights or claims are to those which may
have arisen prior to the execution date of this Agreement.
(iv) a portion of the consideration set out in this Agreement is in
addition to compensation that he may already have been entitled
to;
(v) he has been specifically advised in writing to consult with an
attorney prior to executing this Agreement;
(vi) he has been informed that he has a period of at least twenty-
one (21) calendar days within which to consider this Agreement;
which period may be waived by him executing this Agreement;
(vii) he specifically understands that he may revoke this Agreement
for a period of at least fifteen (15) calendar days following
his execution of this Agreement, and that this Agreement is not
effective or enforceable until the fifteen (15) day revocation
period has expired;
(viii) if he decides to revoke this Agreement within said fifteen (15)
day period, he must provide written notice to the Vice
President, General Counsel and Secretary, delivered in person
or by mail. If his revocation is sent by mail, it must be post-
marked within the fifteen (15) day period, properly addressed
to Xxxxxx X. Xxxxxxxx, Vice President, General Counsel and
Secretary, Graco Inc., X.X. Xxx 0000, Xxxxxxxxxxx, XX. 00000,
and sent by certified mail, return receipt requested. Xx.
Xxxxxx understands that Graco will have no obligation under
this Agreement if he revokes his acceptance within the time
limit specified.
(ix) Xx. Xxxxxx expressly agrees that the waiver of his rights
pursuant to the Agreement is knowing and voluntary on his part.
8. Applicable Law
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Except to the extent governed by federal law, this Agreement and any
controversies between the parties shall be governed by and construed in
accordance with the laws of the State of Minnesota.
9. Entire Agreement
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This Agreement constitutes the entire agreement and understanding between
the parties with respect to the subject matter hereof, and, except as
otherwise specifically provided herein, specifically supersedes and
replaces any and all prior written or oral agreements or understandings.
This Agreement may not be amended except in a writing signed by authorized
representatives of both parties.
10. Headings
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The headings of the paragraphs herein are included solely for the
convenience of reference and shall not control the meaning or
interpretation of any provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
GRACO INC.
By: /s/Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
President and Chief Executive Officer
July 25, 2002
By: /s/Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
Date: July 25, 2002
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