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January 30, 1998
Mr. George R. Ditomassi, Jr.
152 Tennyson Drive
Longmeadow, MA 01106
Dear George:
In connection with the termination of your employment with Hasbro, Inc.
(the "Company") and your resignation as an officer of the Company and as an
officer and director of various divisions and subsidiaries of the Company,
on January 31, 1998 the "Company" will pay you the basic severance
benefits described in Section 2 of the attached "Description of Severance
Benefits" if you do not sign and return this letter by February 20, 1998.
If you timely sign and return this letter, the Company will pay and provide
you the enhanced severance benefits subject to the terms and conditions
outlined in Section 1 of the attached "Description of Severance Benefits".
By signing and returning this letter you will be agreeing to the terms and
conditions set forth in the numbered paragraphs below, including the
release of claims set forth in paragraph 2. You should consult with your
own attorney before signing this letter and may take up to twenty-one (21)
days to do so.
If after reviewing this letter with your attorney, you find the terms and
conditions are satisfactory to you, you should sign and return this letter
to Bob Carniaux, Vice President, Human Resources in the enclosed envelope
by February 20, 1998. If you sign this letter, you may change your mind
and revoke your agreement during the seven (7) day period after you have
signed it. If you do not so revoke, this letter will become a binding
agreement between you and the Company upon the expiration of the seven (7)
day revocation period.
The following numbered paragraphs set forth the terms and conditions which
will apply if you timely sign and return this letter and do not revoke it
within the seven (7) day revocation period:
1. Description of Severance Benefits.
---------------------------------
The severance benefits to be paid to you if you timely sign and return
this letter are as described in Section 1 of the attached "Description of
Severance Benefits". The payment of these benefits is subject to the terms
of this letter and the terms of the Company's Severance Benefits Plan for
Salaried Employees (the "Severance Plan").
2. Releases.
--------
(a). You hereby fully, forever, irrevocably and unconditionally
release, remise and discharge the Company, and any subsidiary or affiliated
organization of the Company or their current or former officers, directors,
stockholders, corporate affiliates, attorneys, agents and employees (the
"Released Parties") from any and all claims, charges, complaints, demands,
actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings,
omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys' fees and costs), of every kind and nature, known or
unknown, which you ever had or now have against the Released Parties,
including, but not limited to, all claims arising out of your employment,
all claims arising out of the termination of your employment, all claims
arising from any failure to re-employ you, all claims of race, sex,
national origin, handicap, religious, sexual preference, benefit and age
discrimination, all employment discrimination claims under Title VII of the
Civil Rights Act of 1964, 42 U.S.C. Section 2000 et seq., the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq., the
Americans with Disabilities Act of 1990, 29 U.S.C. Section 12101 et seq.,
the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001
et seq., and similar state or local statutes, wrongful discharge claims,
common law tort, defamation, breach of contract and other common law
claims, and any claims under any other federal, state or local statutes or
ordinances not expressly referenced above.
(b). The Company hereby fully, forever, irrevocably and unconditionally
releases. remises and discharges you from any and all claims, charges,
complaints, demands, actions, causes of actions, suits, rights, debts, sums
of money, costs, accounts, reckonings, covenants, contracts, agreements,
promises, doings, omissions, damages, executions, obligations, liabilities
and expenses (including attorneys' fees and costs), of every kind and
nature, known or unknown, which the Company ever had or now has against
you, provided that this release will not extend to any intentional or
criminal wrongs, any contractual obligation you have to the Company, and
any matter relating to any violation of any statute, regulation or other
public law except to the extent you would otherwise be indemnified by the
Company. This release shall not extend to any shareholder derivative suits.
3. Covenant Not To Sue.
-------------------
(a). You represent and warrant that you have not filed any complaints,
charges, or claims for relief against the Released Parties. You further
agree not to bring any complaints, charges or claims against the Released
Parties with respect to any matters arising out of your employment with or
termination from employment with the Company.
(b). The Company represents and warrants that it has not filed any
complaints, charges, or claims against you. The Company further agrees not
to bring any complaints, claims or charges against you with respect to any
matters arising out of your employment or termination from employment with
the Company provided that this covenant by the Company will not extend to
any intentional or criminal wrongs, any contractual obligation you have to
the Company, and any matter relating to any violation of any statute,
regulation or other public law. This covenant shall not extend to any
shareholder derivative suits.
4. Proprietary Information.
-----------------------
You acknowledge and reaffirm your representations and obligations as set
forth in the Invention Assignment and Proprietary Information Agreement
which you previously signed in connection with your employment with the
Company.
5. Nature of Agreement.
-------------------
You and the Company understand and agree that this letter agreement is a
severance and settlement agreement and does not constitute an admission of
liability or wrongdoing on the part of you, the Company, or any other
person.
6. Amendment.
---------
This letter agreement shall be binding upon the parties and may not be
modified in any manner, except by an instrument in writing of concurrent or
subsequent date signed by a duly authorized representative of the parties
hereto. This agreement is binding upon and shall inure to the benefit of
the parties and their respective agents, assigns, heirs, executors,
successors and administrators. No delay or omission by the Company in
exercising any right under this agreement shall operate as a waiver of that
or any other right. A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
7. Validity.
--------
Should any provision of this letter agreement be declared or be
determined by any court of competent jurisdiction to be illegal or invalid,
the validity of the remaining parts, terms, or provisions shall not be
affected thereby and said illegal and invalid part, term or provision shall
be deemed not to be a part of this agreement.
8. Confidentiality.
---------------
You and the Company acknowledge, understand and agree that the terms and
contents of this letter agreement, and the contents of the negotiations and
discussions resulting in this agreement, shall be maintained as
confidential by you and your agents and representatives and the Company,
and any dispute resolved by this agreement shall also remain confidential,
and none of the above shall be disclosed except to the extent required by
federal or state law or as otherwise agreed to in writing by you and an
officer of theCompany.
9. Entire Agreement and Applicable Law.
-----------------------------------
This letter agreement contains and constitutes the entire understanding
and agreement between the parties hereto with respect to your severance
benefits and settlement of claims against the Company and cancels all
previous oral and written negotiations, agreements, commitments, and
writings in connection therewith. This agreement shall be governed by the
laws of the State of Rhode Island to the extent not preempted by federal
law.
10. Acknowledgments.
---------------
You acknowledge that you have been given at least twenty-one (21) days to
consider this letter agreement and that the Company advised you to consult
with any attorney of your own choosing prior to signing this letter. You
may revoke this agreement for a period of seven (7) days after signing
this letter, and the agreement shall not be effective or enforceable until
the expiration of this seven (7) day revocation period.
11. Voluntary Assent.
----------------
You affirm that no other promises or agreements of any kind have been
made to or with you by any person or entity whatsoever to cause you to sign
this letter agreement, and that you fully understand the meaning and intent
of this agreement. You state and represent that you have had an opportunity
to fully discuss and review the terms of this agreement with an attorney.
You further state and represent that you have carefully read this letter,
understand the contents herein, freely and voluntarily assent to all of the
terms and conditions hereof, and sign your name of your own free act.
12. Covenant Not to Compete.
-----------------------
(a). You agree that you will not, without written consent of the
Company, at any time during which Severance Benefits are payable under this
letter agreement and for a period of one year from the date Severance
Benefits cease under this letter agreement, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, render services or advice to, or be connected
with, as partner, stockholder, director, officer, agent, employee,
consultant or otherwise, any business, firm or corporation which competes
with the Company in any country or line of business in which the Company is
engaged.
(b). You agree that during the period in which Severance Benefits are
paid and thereafter for a period of one year, you will not interfere with
any relationship, contractual or otherwise, between the Company and any
other party, including; without limitation, any employee, customer,
supplier, distributor, lessor or lessee, licensor or licensee, commercial
or investment banker.
(c). You understand, acknowledge and agree that the provisions of this
Section 12 shall survive the termination of this letter agreement.
13. Legal Expenses.
--------------
The Company agrees to pay reasonable and documented legal expenses
incurred by you in connection with drafting this letter agreement and
related documents.
If you have any questions about the matters covered in this letter, please
call Bob Carniaux, Vice President, Human Resources at (401) 727-5654.
Very truly yours,
/s/ Harold Gordon
-----------------
Harold Gordon
Vice Chairman
Hasbro, Inc.
I hereby agree to the terms and conditions set forth above and in the
attached Description of Severance Benefits. I intend that this letter will
become a binding agreement between me and the Company if I do not revoke my
acceptance within seven (7) days.
Signature /s/ George R. Ditomassi, Jr.
----------------------------
(Employee's Name)
Date: January 31, 1998
----------------
To be returned in the enclosed envelope by February 20, 1998
HASBRO, INC.
DESCRIPTION OF SEVERANCE BENEFITS
Name of Employee: GEORGE R. DITOMASSI
Date of Offer: January 30, 1998
Termination Date: January 31, 1998
If you timely sign and return the attached letter and it becomes a binding
contract between you and the Company, the Company will pay you the enhanced
severance subject to the terms and conditions outlined in Section 1 below,
the terms and conditions contained in the attached letter, this
description, and the Company's Severance Benefits Plan for Salaried
Employees.
If you do not timely sign and return the attached letter, the Company will
pay you the basic severance benefits described in Section 2 below, subject
to the terms and conditions contained in this description and the Company's
Severance Benefits Plan for Salaried Employees.
Section 1. Enhanced Severance Benefits.
---------------------------
If you timely sign and return the attached letter and it becomes a
binding contract between you and the Company, you will be entitled to an
enhanced program of severance benefits consisting of:
(a) severance pay at the base rate of $41,979.17 per month for 23
months commencing with February 1998 and payable monthly thereafter.
Severance pay will be prorated for partial months eligible;
(b) continuance of your current level of basic life insurance with the
Company and you sharing the cost for this coverage on the same basis as the
cost is shared between the Company and similarly situated active employees
during the period of severance pay;
(c) payment by the Company of premiums associated with maintaining up
to $800,000 in supplemental term life insurance coverage for the period of
severance pay and subject to your filing the appropriate application
including a statement of health or other required documentation for such
coverage with the Company's group life insurance carrier and subject to the
carrier's approval of such coverage.
(d) continuance of your current medical and dental coverage during the
period of severance pay, with the Company and you sharing the cost for this
coverage on the same basis as the cost is shared between the Company and
similarly situated active employees during the same period, and with your
right to continued coverage (or conversion to an individual policy) at your
own expense where available beginning when the extended coverage under this
item(d) ends;
(e) continuance of your leased company executive automobile or
allowance benefit during the period of severance pay;
(f) continuance of reimbursement for reasonable expenses for executive
income tax filing preparation and advising services during the severance
pay period;
(g) subject to the approval of the Compensation and Stock Option
Committee of the Board of Directors of the Company, any previously granted
stock options will continue to vest during the severance pay period as if
you continued to be an employee of the Company. Subject to the approval of
the Compensation and Stock Option Committee of the Board of Directors of
the Company, at the conclusion of the severance pay period all previously
granted options will vest and be exercisable for a period of one year
thereafter except that premium priced options granted on February 12, 1993,
February 17, 1995 and September 17, 1997 will vest and be exercisable for
three years thereafter;
(h) if you begin full time regular non-temporary employment with an
employer other than the Company during the period of severance pay your
right to severance pay will end but the following benefits will be
continued for the remainder severance period but only to the extent that
they are not provided by your new employer: reimbursement for income tax
service expenses, executive automobile, continuance of basic and
supplemental life insurance coverage at Company expense, continuance of
medical and dental coverage partially at Company expense and continued
vesting of stock options.
Section 2. Basic Benefits.
--------------
If you do not timely sign and return the attached letter , you will be
entitled to a program of severance benefits consisting of:
(a) severance pay at your base rate of pay (as in effect immediately
before termination and exclusive of any bonuses, commissions, overtime pay,
or other extra forms of compensation) for three (3) weeks;
(b) a lump sum payment to be made at the end of the period of severance
pay for your unused vacation that has been granted for use in the current
year;
(c) continuance of your current level of basic, supplemental and
dependent life insurance with the company and you sharing the cost for this
coverage on the same basis as the cost is shared between the company and
similarly situated active employees during the period of severance pay;
(d) continuance of your current medical and dental coverage during the
period of severance pay, with the Company and you sharing the cost for this
coverage on the same basis as the cost is shared between the Company and
similarly situated active employees during the same period, and with your
right to continued coverage (or conversion to an individual policy) at your
own expense where available beginning when the extended coverage under this
item (d) ends;
If you begin new employment during the period of severance pay, your
right to severance pay and continuance of basic, supplemental and dependent
life insurance coverage and of medical and dental coverage partially at
Company expense shall end when the new employment begins and you shall be
obligated to repay to the Company any severance pay paid to you and any
premiums paid by the Company for basic life insurance coverage and the
Company's share of the cost for medical and dental coverage paid after you
begin the new employment.
Section 3. Other Provisions.
----------------
(a) You will be entitled to any benefits payable after or on account of
termination of employment under any employee pension or welfare benefit
plans, stock option plans, or other plans or programs or policies of the
Company in accordance with their terms and conditions, unless otherwise
stated above in Section 1.
(b) The Company may withhold from any payment described herein:
(1) any federal, state, or local income or payroll taxes required by
law to be withheld with respect to such payment;
(2) such sum as the Company may reasonably estimate is necessary to
cover any taxes for which the Company may be liable and which may be
assessed with regard to such payment; and
(3) such other amounts as appropriately may be withheld under the
Company's payroll policies and procedures from time to time in effect.
(c) The severance benefits described herein are the maximum benefits
that the Company will pay. To the extent that the Company owes you any
amounts in the nature of severance benefits under any other program, policy
or plan of the Company, or to the extent that any federal, state or local
law, including, without limitation, so-called "plant closing" laws,
requires the Company to give advance notice or make a payment of any kind
to you because of your involuntary termination due to a layoff, reduction
in force, plant or facility closing, sale of business, or similar event,
the benefits provided hereunder or under the other arrangement shall either
be reduced or eliminated to avoid any duplication of payment;
(d) In the event of your death during the period of severance pay, the
severance pay shall cease at death.
SUMMARY OF SEVERANCE BENEFITS
APPENDIX A
GEORGE R. DITOMASSI
ENHANCED BENEFITS
Severance Pay: You will receive 23 months of severance
pay
Medical Coverage: * You have Blue Choice POS - family coverage
Dental Coverage: * You have Delta Dental Basic Plan - family
coverage
Basic Life Insurance: * You have $769,000 at no cost to you
Supplemental Life Insurance: * $800,000 in coverage at no cost to you,
subject to your submission to the
insurance carrier of the insurance
application, statement of health and other
required documentation and subject to the
approval of such coverage by the insurance
carrier.
Dependent Life Insurance: * You have waived coverage
* These benefit programs will remain in effect during the "Severance Pay"
period and are based upon your current elections for 1998.
BASIC BENEFITS
Severance Pay: You will receive 3 weeks of severance pay
Medical Coverage: * You have Blue Choice POS - family coverage
Dental Coverage: * You have Delta Dental Basic Plan - family
coverage
Basic Life Insurance: * You have $769,000 at no cost to you
Supplemental Life Insurance: * You have waived additional life insurance
coverage
Dependent Life Insurance: * You have waived coverage
* These benefit programs will remain in effect during the "Severance Pay"
period and are based upon your current elections for 1998.
The above description of severance benefits is intended to assist you as a
summary. The actual description of severance benefits and the terms and
conditions which affect these benefits is contained in the Severance
Description and Agreement letter which you received along with this
summary. To the extent there may be any inconsistencies or difference
between the summary and the terms of the letter, the terms of the letter
are controlling.
January 30, 1998
Mr. George Ditomassi
152 Tennyson Drive
Longmeadow, MA 01106
Dear George:
In connection with the termination of your employment with Hasbro (the
"Company") and your resignation as an officer of the Company, and as an
officer and director of various divisions and subsidiaries of the Company
as of January 31, 1998 and in consideration of the covenants contained in a
Severance Agreement dated January 30, 1998 between you and the Company, the
Company agrees to indemnify and hold you harmless as more particularly set
forth in this letter agreement.
Subsequent to the termination of your employment, you shall be entitled to
the same rights of indemnity for actions taken while an officer, director
or employee of the Company as you currently have as an officer, director,
former director or consultant of Hasbro or any of its various divisions or
subsidiaries. In the event that the rights of indemnity of officers or
directors of the Company are enhanced hereafter, you shall also be entitled
to such enhanced rights of indemnity as they relate to action taken while
you were an officer, director or employee of the Company.
The foregoing rights shall not be exclusive of any other rights to which
you may be entitled under any agreement, vote, statute, by-law or
otherwise. The provisions of this Agreement are separable and if any
provisions or portion hereof shall for any reason be held inapplicable,
illegal or ineffective, such result shall not affect any other right of
indemnification or reimbursement whether provided herein or in any other
document or form.
This Agreement shall be binding upon each of the parties and their
successors and assigns and shall inure to the benefit of their heirs and
legal representatives.
If the foregoing is acceptable to you, please sign the enclosed copy of
this letter agreement and return it to me as soon as possible.
Very truly yours,
Hasbro, Inc.
/s/ Harold Gordon
-----------------
Harold Gordon
Vice Chairman, Duly Authorized
Accepted and agreed to:
/s/ George Ditomassi
--------------------
George Ditomassi