Exhibit
10.2


 


NORCROSS
SAFETY PRODUCTS L.L.C.


AMENDED AND
RESTATED


EMPLOYMENT
AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of May 20,
2005, is entered into by and between Norcross Safety Products L.L.C., a
Delaware limited liability company (the “Company”), and Robert A.
Peterson (“Executive”). Certain capitalized terms used but not otherwise
defined herein are defined in Section 7.


 


WHEREAS, the Company and the Executive previously entered into an
Employment Agreement dated as of January 1, 2002; and


 


WHEREAS, the Company and the Executive now wish to revise the terms and
conditions of Executive’s employment.


 


NOW THEREFORE, the parties hereto, in exchange for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound, hereby agree as follows:


 


1.             Employment and Duties.


 


(a)           The Company shall continue to employ Executive, and Executive shall continue
in employment with the Company, as Chief Executive Officer and President of the
Company, pursuant to the terms and conditions of this Agreement. Executive
shall report to the Board of Directors of Safety Products Holdings, Inc.
(the “Board”).


 


(b)           Executive shall devote his best efforts to
the interests of the Company and, to the extent requested, its Affiliates,
which interests may change from time to time, and shall devote all of his
professional time and attention to the business and affairs of the Company and such
Affiliates; provided that nothing herein shall prevent Executive, with
the prior written approval of the Board, from serving as a director or trustee
of other corporations or businesses which are not in competition with the
Company or its Affiliates; provided,  further that nothing herein
shall apply to Executive’s service as a director or trustee of such
corporations or businesses on which Executive serves as of the date hereof.
Notwithstanding this Section 1(b) or any other provision of
this Agreement to the contrary, Executive may commence seeking other employment
if Company, at least 90 days before the date referred to in clause (i) of
the first sentence of Section 2(a), shall not have offered to
Executive in writing to continue to employ Executive for at least two years, on
terms no less favorable to Executive than those existing at such time.


 


(c)           Executive shall perform such duties and functions commensurate with his
position as may be reasonably assigned or delegated to him from time to time by
the Board. Executive acknowledges that such duties and functions may or may not
involve performance of services for or on behalf of Affiliates of the Company.


 





















 


2.             Term and Termination.


 


(a)           Term.   The “Term” of
Executive’s employment is from the date hereof until the “Termination Date,”
which is defined as the earlier of (i) the fifth anniversary of the date
hereof or (ii) the date of termination of Executive’s employment pursuant
to any one or more of Sections 2(b), 2(c), 2(d) or 2(e) of
this Agreement. Executive is an at-will employee of the Company, and his employment
may be terminated by Executive, in his sole and arbitrary discretion, at any
time with or without Good Reason, or by the Company, in the Company’s sole and
arbitrary discretion, at any time with or without Cause, by delivery of a
written termination notice to the other party.


 


(b)           Death.  If Executive dies during the
Term, the Termination Date shall be the date of his death.


 


(c)           Disability.   If Executive becomes Disabled
during the Term, the Termination Date shall be the date as of which such Disability
is determined.  Subject to applicable
law, “Disability” or “Disabled” means such physical, mental or
psychological condition or other impairment that prevents Executive from
effectively performing the duties of his employment for more than ninety (90)
calendar days in any six (6) consecutive months commencing on the initial
date of such condition or impairment.  In
connection with any Disability (or possible Disability):


 


(i)            Executive (and Executive’s spouse or whoever
else is acting on his behalf) shall cooperate with any physicians engaged or
requested to be engaged by the Company to examine Executive to determine
whether or not Executive is Disabled, and each of Executive and the Company
irrevocably consents to disclosure to each of them by any such physicians of
all matters relating to such examinations.


 


(ii)          The determination of Disability shall be by
agreement of the Company and Executive, or if Executive’s condition is such
that he is unable to participate in such determination, then by agreement of
the Company and Executive’s spouse or whoever else is then acting on his
behalf, and if the parties involved in such determination are unable to reach
agreement within ten (10) days of a request by either party, then the
issue shall be decided by a physician chosen by the Company and reasonably
acceptable to Executive (or Executive’s spouse or whoever else is then acting
on his behalf). The Company will pay all expenses incurred in the determination
of whether Executive is Disabled.


 


(d)           Termination By Executive. If Executive terminates his employment,
with or without Good Reason, the Termination Date shall be the date indicated
on the written termination notice given by Executive to the Company, which may
not be more than thirty (30) days nor less than fourteen (14) days from its
receipt by the Company; provided  that upon receipt of Executive’s
termination notice, the Company may, in its sole discretion, request that Executive
cease his employment activities prior to the date referenced in such notice, and
Executive shall promptly comply with such request, it being understood that
such request will


 


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not change the Termination Date specified in this Section 2(d) or
affect the characterization of the termination of Executive’s employment.


 


(e)           Termination by the Company.  If
the Company terminates the employment of Executive, with or without Cause, the
Termination Date shall be the date on which the Company’s termination notice is
given to Executive, or such later date indicated on such termination notice,
which may not be more than thirty (30) days from its receipt by Executive.


 


(f)            Reversal of Determination.   If
Executive’s employment is terminated by the Company with Cause or by Executive
with Good Reason, and it is thereafter judicially determined that Cause or Good
Reason as appropriate for such termination did not exist at the time of such
termination, then Executive’s employment shall be deemed to have been
terminated without Cause or Good Reason as appropriate as of the Termination
Date. If matters constituting Cause or Good Reason as appropriate become known
to the Company or to Executive within 90 business days after Executive’s
employment is terminated, then either party may, by delivery of written notice
to the other party treat such termination as being with Cause or Good Reason as
appropriate.


 


(g)           Definition of Cause.  “Cause”
for termination of Executive’s employment by the Company means Executive’s:


 


(i)            embezzlement or misappropriation of funds;


 


(ii)           conviction of a felony involving moral
turpitude;


 


(iii)          commission of a material act of dishonesty,
fraud, or deceit;


 


(iv)          breach of any material provisions of this
Agreement or other agreement with the Company, Safety Products Holdings, Inc.,
or any Subsidiary, to which he is a party;


 


(v)           habitual or willful neglect of his duties;


 


(vi)          breach of fiduciary duty to the Company,
Safety Products Holdings, Inc., or any Subsidiary, involving personal
profit; or


 


(vii)         material violation of any other duty to the
Company, Safety Products Holdings, Inc., or any Subsidiary, or its members
imposed by its managers or by law.


 


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(h)           Definition of Good Reason. “Good Reason” for termination by
Executive of Executive’s employment means:


 


(i)            a material breach by the Company of its
obligations under this Agreement which is not cured (if curable) within twenty
(20) days after written notice by Executive to the Company;


 


(ii)           the Company’s requiring Executive to move his
principal place of employment by more than 25 miles, other than for reasonable
business travel, if such move increases Executive’s commute from his primary
residence, without Executive’s written consent thereto; provided  that
Executive must notify the Company in writing of his intent to terminate his
employment pursuant to this Section 2(h)(ii) prior to the
sixtieth day after the earlier of (x) the date that the Company notifies
Executive in writing of its intent to relocate Executive and (y) the date that
such relocation occurs;


 


(iii)          the failure of any successor to the Company
to assume this Agreement as set forth in Section 9(i); or


 


(iv)          the occurrence of a Change of Control; provided
that Executive must notify the Company in writing of his intent to
terminate his employment pursuant to this Section 2(h)(iv) prior to
the sixtieth day after the date of the Change of Control.


 


3.             Compensation.


 


(a)           Executive’s compensation for his services hereunder shall consist of
(i) Base Salary, plus (ii) Bonus, if any, plus (iii) Benefits.


 


(b)           “Base Salary” shall be paid by the Company to Executive at an
annual rate of $515,000 (subject to increase from time to time in the sole
discretion of the Board to reflect cost-of-living increases and as merited to
reflect Executive’s performance on behalf of the Company and its Subsidiaries),
payable in arrears in equal bi-weekly installments.   Under no circumstances may the Base Salary
be decreased during the Term.


 


(c)           “Bonus,” if any, shall be targeted at 90% of Base Salary, based
on targeted EBITDA and Net Debt or other such financial criteria as may be
determined by the Board, consistent with the pay out schedule for the
Bonus plan attached as Exhibit A.  
Targets for annual criteria will be subject to approval by the
Board.   All Bonuses due hereunder shall
be payable on or before March 15 of the following year.


 


(d)          “Benefits” consist of whatever, if
any, health, hospitalization, sick pay, life insurance, disability insurance,
profit sharing, pension, 401 (k), and deferred compensation plans and programs
that the Company may have in effect from time to time for its employees who are
not members of a collective bargaining unit, all of which Executive shall be
entitled to participate in pursuant to their terms and on a basis commensurate
with his position. By way of clarification of the immediately preceding
sentence, it is also agreed that the parties hereto will


 


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use their reasonable best efforts to enable Executive to participate in
the Norcross Safety Products L.L.C. Employees’ Pension Plan and the North
Safety Products Inc. Retirement Benefit Restoration Plan; provided  that
such participation does not contravene any provision of ERISA, the Code, other
applicable law or any agreement by which the Company is bound and can be
achieved at a reasonable cost. Executive shall also be entitled to four (4) calendar
weeks’ paid vacation each year, in addition to regularly scheduled holidays.
The Company may initiate, change and discontinue any such plans and programs at
any time; provided  that no such change shall be effective as to
Executive unless it is also effective as to the other senior executives of the
Company. If any of such plans or programs require contributions by employees,
Executive shall pay the contributions required by his participation at a rate
no greater than that applicable to any senior executive of the Company. Company
shall pay Executive a monthly automobile allowance of $700.


 


4.             Termination Provisions.


 


(a)           If the Company terminates Executive’s employment with Cause or if Executive
terminates his employment without Good Reason, then Executive shall be entitled
to:


 


(i)            receive Base Salary and Benefits for the
period ending on the Termination Date; and


 


(ii)           receive any unpaid Bonus for any calendar
year ending prior to the year in which the Termination Date occurs.


 


(b)           If the Company terminates Executive’s employment without Cause (which shall
include, without limitation, Company’s not offering Executive continued
employment with the Company in accordance with the second sentence of Section I(b)),
if Executive terminates his employment with Good Reason, or if Executive’s
employment terminates by reason of his death or Disability, then Executive
shall be entitled to receive the following, except that (v) shall not
apply in the case of Executive’s death:


 


(i)            Base Salary and Benefits for the period
ending on the Termination Date;


 


(ii)           any unpaid Bonus for any calendar year ending
prior to the year in which the Termination Date occurs;


 


(iii)          any Bonus for the calendar year in which the
Termination Date occurs, pro rated based on the portion of Base Salary paid to
Executive by the Company in such year if financial targets are met for the year
in which the Termination Date occurs;


 


(iv)          if, and only if, Executive (or his guardian or personal
representative, as the case maybe), within 30 days after the Termination Date,
signs and delivers to the Company a complete general release of claims for
facts


 


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and circumstances existing before the date of such release in the form
of Exhibit B, Base Salary for the period commencing on the Termination
Date and ending two years thereafter, together with any other Benefits as may
be provided under the terms of any applicable written plan, program or
arrangement of the Company applicable to senior executives of the Company
(including automobile allowance) for such period. If Executive does not comply
with the terms of this Section 4(b)(v) within 30 days after
the Termination Date, the Company shall not be responsible for any further
payments to Executive.


 


Notwithstanding the foregoing, in the event that the Executive’s
employment has terminated because the Company has not offered Executive
continued employment with the Company in accordance with the second sentence of
Section 1 (b), any payments or benefits that Executive would be
entitled to receive from the Company in the second year of the severance period
shall be reduced by the amounts of any payments or benefits (but the reduction
for benefits shall only be for benefits of a substantially similar nature) that
Executive shall be entitled to receive during and with respect to the second
year of the severance period from other employment (including self-employment).
Executive shall promptly report to the Company all payments or benefits from
other employment (including self-employment) Executive is entitled to receive
during and with respect to the second year of such severance period.


 


(c)           Any amounts owed by the Company to Executive pursuant to Section 4(b)(v) shall
be paid at such times and in such manner as if the termination giving rise to
such payments had not occurred (with the Company retaining the right to prepay
all or any portion of such amount at any time in its sole discretion); provided
that in the event that Executive’s employment has been terminated for the
reason described in Section 2(h)(iv), amounts owed to Executive shall be
paid in a single lump sum within ten days of the effective date of Executive’s resignation,
discounted to present value at a 7% annual rate.


 


(d)           The Company’s obligation to make any payments or Benefits available to Executive
pursuant to this Section 4 shall be conditioned upon Executive’s
continued and continuing compliance with the terms and conditions of this
Agreement (including, without limitation, Section 6 hereof) and
shall constitute Company’s sole obligation, and the sole obligation of Company’s
Affiliates, to Executive (or any Person making any claim through Executive or
regarding his employment by Company or any Affiliate) in respect of Company’s termination
of Executive’s employment hereunder or any breach by Company hereof respecting which
Executive terminates his employment hereunder.


 


(e)           Except as otherwise specified herein, if Executive’s employment terminates
on any date other than the last day of a month, Executive’s compensation for
that month shall be calculated on the basis of a fraction, the numerator of
which shall be the number of days during that month that Executive shall have
been in the Company’s employ and the denominator of which shall be the number
of days in that month.


 


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(f)            In the event that Executive’s employment is
terminated for Cause, the Company may offset any amounts Executive owes it or
its Affiliates pursuant to any written agreement, note or other instrument
relating to indebtedness for borrowed money to which Executive is a party, or
pursuant to any other liability or obligation by which Executive is bound, in
each case which is due or becomes due within ninety days after Executive is to
be paid such amounts hereunder against any amounts it owes Executive hereunder,
upon providing written notice to Executive of such offset.


 


5.             Expenses. The Company shall reimburse Executive for all reasonable expenses incurred
in the performance of his duties in accordance with the expense reimbursement
policy of the Company with respect to senior executives of the Company in
effect at the time.


 


6.             Noncompetition, Nonsolicitation,
Confidentiality.


 


As a material inducement to the Company to enter into this Agreement
and in consideration of the payment by the Company of the compensation detailed
herein to Executive:


 


(a)           During the period (the “Noncompete Period”) beginning on the
date hereof and ending 18 months after the Termination Date, Executive shall
not, without the prior written consent of the Company (which consent may be
granted or withheld in the Company’s sole discretion), directly or indirectly,
Participate in any line of business in which the Company is actively engaged or
any line of business competitive with the Company anywhere in the United States
and any other country in which the Company does business as of the Termination Date
(the “Competitive Activities”). For purposes of this Agreement, the term
“Participate” includes any direct or indirect interest in, or providing
any direct or indirect assistance (whether financial, advisory or otherwise)
to, any enterprise (or any affiliate thereof), whether as an officer, director,
employee, partner, member, sole proprietor, agent, representative, independent contractor,
consultant, creditor, stockholders, unitholder, owner or otherwise; provided
that the term “Participate” shall not include beneficial ownership of
less than 2% of a class of securities traded on a national securities exchange
or the NASDAQ Stock Market.


 


(b)           During the Noncompete Period, Executive (i)  except with respect
to Executive’s personal secretary and David F. Myers, Jr., shall not, and
shall not attempt to, directly or indirectly contact, approach or solicit for
the purpose of offering employment to or hiring or retaining, or arrange to
have any other Person hire or retain, or actually hire or retain, whether as an
employee, consultant, agent, independent contractor or otherwise, any Person employed
or retained by Safety Products Holdings, Inc., Company, or any Subsidiary
as an employee, consultant or independent contractor during the Noncompete
Period and (ii) shall not, and shall not attempt to, call-on, solicit,
service, advise, encourage or induce any customer, supplier,  or other business relation of Safety Products
Holdings,  Inc.,  Company, 
or any Subsidiary to cease doing business, or reduce its business, with
Safety Products Holdings, Inc., Company, or any Subsidiary or to engage in
any business relationship which might materially harm Safety Products Holdings, Inc.,
Company, or any Subsidiary.


 


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(c)           Executive acknowledges that certain of the information, observations
and data relating to the Company and its Affiliates, or their business,
products or services, which he possesses or has obtained knowledge of or will
possess or obtain knowledge of as an employee, officer, director or
equityholder of the Company is and will be the confidential and proprietary property
of the Company and its Affiliates (“Confidential Information”).
Executive agrees that he shall not, directly or indirectly, use for his own
purposes or use for or disclose to any third party any of such Confidential
Information without the prior written consent of the Company, unless and to the
extent that the aforementioned matters (i) become generally known to and available
for use by the public other than as a result of Executive’s acts or failures to
act, or (ii) Executive is required by order of a court of competent
jurisdiction (by subpoena or similar process) to disclose any Confidential
Information (provided that in such case, Executive shall promptly inform the
Company of such order, shall cooperate with the Company at the Company’s
expense in attempting to obtain a protective order or to otherwise restrict
such disclosure, and shall only disclose Confidential Information to the
minimum extent necessary to comply with any such court order).


 


(d)           The parties hereto acknowledge and agree that the Company will suffer irreparable
harm from a breach by Executive of any of the covenants or agreements contained
in this Section 6. In the event of an alleged or threatened breach
by Executive of any of the provisions of this Section 6, the
Company or other appropriate Person may, in addition to all other rights and
remedies existing in its or their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other equitable relief in order
to enforce or prevent any violations of the provisions hereof. Executive
acknowledges and agrees that the restrictions contained in this Section 6
are reasonable.


 


(e)           If, at the time enforcement of any of the provisions of this Section 6
is sought, a court holds that the restrictions stated herein are unreasonable
under the circumstances then existing, the parties hereto agree that the
maximum period, scope or geographical area reasonable under such circumstances
shall be substituted for the stated period, scope or geographical area.
Executive agrees that the covenants made in this Section 6 shall be
construed as an agreement independent of any other provision of this Agreement
and shall survive any order of a court of competent jurisdiction terminating
any other provision of this Agreement.


 


(f)            Executive hereby agrees and acknowledges (i) that
the Company and its Affiliates have protectable interests in the information,
data, and plans, both technical and business in nature, which are treated as
confidential, as well as the goodwill and specialized knowledge acquired by
Executive during the course of Executive’s employment with the Company; (ii) that
the provisions of this Section 6 are in consideration of (A) employment
with the Company, including grants of Equity under the Equity Program, (B) access
to and use of Confidential Information, including but not limited to
information, data, and plans, both technical and business in nature, such as
customer lists and records, sales records and marketing plans, research and
technical reports and records, formulas, processes, programs, inventions, patent
applications, designs and drawings, instructions and training manuals,  business and financial information, salary information,
contracts and other legal documents, and


 


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correspondence to which the Company has been a party, (C) access
to and Executive’s development on behalf of the Company of near-permanent
relationships with the Company’s customers, and (D) additional good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged; (iii) that the restrictions contained in this Section 6
do not preclude Executive from earning a livelihood, nor do they unreasonably
impose limitations on Executive’s ability to earn a living, and that the
potential harm to the Company or its Affiliates of the non-enforcement of this Section 6
outweighs any harm to Executive of their enforcement by injunction or
otherwise; and (iv) that Executive has carefully reviewed this Agreement
and that he has consulted with independent legal counsel regarding his rights
and obligations under this Agreement (or, after carefully reviewing this
Agreement, was given the opportunity to, but has freely decided not to, consult
with independent legal counsel), has given careful consideration to the
restraints imposed upon Executive by this Agreement, fully understands the
terms and conditions contained herein and is in full accord as to their
necessity for the reasonable and proper protection of the Company’s
near-permanent customer relationships and employee relationships and
Confidential Information and those of its Affiliates, and Executive intends for
such terms to be binding on and enforceable against him, and that each and
every restraint imposed by this Agreement is reasonable with respect to subject
matter, time period and geographical area.


 


(g)           Executive agrees that the provisions of this Section 6
shall inure to the benefit of and be enforceable by any Person with whom or
into which the Company shall merge or consolidate, regardless whether the
Company shall be the survivor of such transaction, or to any Person acquiring all
or substantially all of the Company’s assets or business.


 


7.              Definitions. The following definitions shall be applied
to the capitalized terms used in this Agreement for all purposes, unless
otherwise clearly indicated:


 


“Affiliates” of any Person means any Person that directly or
indirectly controls, is controlled by, or is under common control with the
Person in question.


 


“Business” means the manufacturing and/or marketing of personal
protection and safety equipment products primarily intended for use in the
workplace, including, without limitation, respiratory equipment, hand
protection, hearing protection, eye, hand, face and foot protection, industrial
first aid, fall protection, high voltage lineman equipment, eye wash, and
dermatological and single-use applicators for surgical protection.


 


“Change of Control” shall mean any transaction (including,
without limitation, a merger, consolidation, sale of stock or sale of assets,
but excluding any assignment as security for indebtedness) after which Odyssey
Investment Partners, LLC and its Affiliates or any of them shall not have the
power to elect a majority of the members of the Board or the governing body of
Company.


 


“Company” shall have the meaning given to such term in the
preamble hereto, any successor to its business and/or assets which assumes this
Agreement by operation of law or otherwise, and their respective Subsidiaries.


 


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“Net Debt” means, at the time of determination, the excess of (i) indebtedness
of the Company and its Subsidiaries over (ii) cash and cash equivalents of
the Company and its Subsidiaries.


 


“Person” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.


 


“Subsidiary” means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares
of stock entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof; or (ii) if a
limited liability company, partnership, association or other business entity, a
majority of the limited liability company, partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the
managing member or general partner of such limited liability company,
partnership, association or other business entity.


 


8.             Notices. Any notice provided for in this Agreement must be in writing and must
be either personally delivered, mailed by first class mail (postage prepaid and
return receipt requested) or sent by reputable overnight courier service
(charges prepaid) to the recipient at the address below indicated:


 


	
   

  	
  To
  the Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Norcross
  Safety Products L.L.C.

  2211 York Road, Suite 215

  Oakbrook, IL 60523-1887

  Attention: David F. Myers, Jr.

  Telecopier: (630)572-8231

  	
   

  
	
   

  	
   

  
	
   

  	
  with
  copies to:

  	
   

  
				



 


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To Executive


 


Robert A. Peterson

11571 Burr Oak Lane

Burr Ridge, IL 60525




or such other address or to the attention of such other person as the
recipient party shall have specified by prior written notice to the sending
party. Any notice under this Agreement shall be deemed to have been given when
so delivered or sent or, if mailed, five days after deposit in the U.S. mail.


 


9.             General Provisions.


 


(a)           Severability. 
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.


 


(b)           Complete Agreement.  This
Agreement, those documents expressly referred to herein and other documents of
even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way, including but not limited to
the Employment Agreement between the parties dated as of January 1, 2002.


 


(c)           Counterparts.  This
Agreement may be executed in separate counterparts, each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement.


 


(d)           Successors and Assigns.   Unless otherwise expressly provided, this Agreement
shall bind and inure to the benefit of and be enforceable by Executive, the Company
and their respective successors and assigns.


 


(e)           Governing Law. The laws of the state of Illinois shall
govern all issues and questions concerning the employment of Executive, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Illinois or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Illinois. All other issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by, and construed in accordance with, the laws of the
State of Delaware, without giving effect to any choice of law or conflict of
law rules or provisions (whether of the State of Delaware or any


 


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other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.


 


(f)            Amendment and Waiver.  The
provisions of this Agreement may be amended and waived only with the prior
written consent of the Company and Executive.


 


(g)           Third-Party Beneficiary.  Except as expressly provided, there are no beneficiaries
to this Agreement other than the signatories hereto.


 


(h)           Business Days. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or legal
holiday in the state in which the Company’s chief executive office is located,
the time period shall be automatically extended to the business day immediately
following such Saturday, Sunday or legal holiday.


 


(i)            Assignment. Nothing in this Agreement shall preclude the Company from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, another corporation; provide  that the Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company to assume this Agreement.


 


(j)            Withholding. All amounts payable to Executive as compensation hereunder shall be
subject to customary withholding by the Company.


 


(k)           No Strict Construction. The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against
any party.


 


(1)           Survival. Section 4, Section 6, Section 9(m),
and the rest of Section 9 with respect to Section 4 and
Section 6 shall survive and continue in full force in accordance
with their terms notwithstanding any termination of the Term.


 


(m)          Non-Disparagement. The Executive shall not make or publish any
negative statements or communications about Safety Products Holdings, Inc.,
Company, any Subsidiary or any officer, manager, member or employee of Safety
Products Holdings, Inc., Company, or any Subsidiary. The Company shall
not, and shall cause Safety Products Holdings, Inc. and its Subsidiaries
not to, make or publish any negative statements or communications about the
Executive.


 


(n)           Effectiveness. Notwithstanding anything herein to the
contrary, the parties agree that this Agreement is being entered into in
connection with that certain Purchase and Sale Agreement, dated as of May 20,
2005, by and among the Company, NSP Holdings, L.L.C. and Safety Products
Holdings, Inc. (the “Purchase Agreement”) and this Agreement shall become
effective only upon consummation of the transactions contemplated by the
Purchase Agreement. In the event that the Purchase Agreement is terminated, or
the transactions


 


12





















 


thereunder otherwise not consummated, the obligations of the parties
under this Agreement shall automatically terminate.


 


(o)           Equity Program.  At
Closing under the Purchase Agreement, in addition to any rollover equity issued
to the Executive at that Closing (the “Rollover Equity”), Safety Products
Holdings, Inc. or its parent company shall issue to Executive 4.25% of its
fully diluted equity (the “Incentive Equity”). The Rollover Equity and the
Incentive Equity shall be subject to the terms of an agreement to be negotiated
by the parties that will be substantially consistent with those terms set forth
in the term sheet attached hereto as Exhibit C.


 


13





















 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement on the date first written above.


 


	
   

  	
  NORCROSS SAFETY PRODUCTS L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David F. Myers

  	
   

  
	
   

  	
  Name: David F. Myers, Jr.

  
	
   

  	
  Title:
  Executive Vice President and CFO

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Robert A. Peterson

  	
   

  
	
   

  	
  Robert
  A. Peterson

  



 


14





















 


EXHIBIT A


 


Bonus Plan Schedule


 


15





















 


2006
Bonus Plan Payout Schedule


 


	
  % of Target (1)

  	
   

  	
   

  	
   

  
	
  Achieved

  	
   

  	
  % Payout (2)

  	
   

  
	
  120.0

  	
  %

  	
  125.0

  	
  %

  
	
  117.5

  	
  %

  	
  125.0

  	
  %

  
	
  115.0

  	
  %

  	
  125.0

  	
  %

  
	
  112.5

  	
  %

  	
  125.0

  	
  %

  
	
  110.0

  	
  %

  	
  125.0

  	
  %

  
	
  109.0

  	
  %

  	
  122.0

  	
  %

  
	
  108.0

  	
  %

  	
  119.0

  	
  %

  
	
  107.0

  	
  %

  	
  116.0

  	
  %

  
	
  106.0

  	
  %

  	
  113.0

  	
  %

  
	
  105.0

  	
  %

  	
  110.0

  	
  %

  
	
  104.0

  	
  %

  	
  108.0

  	
  %

  
	
  103.0

  	
  %

  	
  106.0

  	
  %

  
	
  102.0

  	
  %

  	
  104.0

  	
  %

  
	
  101.0

  	
  %

  	
  102.0

  	
  %

  
	
  100.0

  	
  %

  	
  100.0

  	
  %

  
	
  99.0

  	
  %

  	
  98.0

  	
  %

  
	
  98.0

  	
  %

  	
  96.0

  	
  %

  
	
  97.0

  	
  %

  	
  94.0

  	
  %

  
	
  96.0

  	
  %

  	
  92.0

  	
  %

  
	
  95.0

  	
  %

  	
  90.0

  	
  %

  
	
  94.0

  	
  %

  	
  84.0

  	
  %

  
	
  93.0

  	
  %

  	
  78.0

  	
  %

  
	
  92.0

  	
  %

  	
  72.0

  	
  %

  
	
  91.0

  	
  %

  	
  66.0

  	
  %

  
	
  90.0

  	
  %

  	
  60.0

  	
  %

  
	
  89.0

  	
  %

  	
  0.0

  	
  %

  



 










(1) Target defined as per Section 3(c) of the Employment
Agreement 


(2) Payout is expressed as a percentage of the Target Bonus 


 





















 


EXHIBIT B


 


For consideration received (including payments,
promises, and agreements), Robert A. Peterson (the “Executive”) on behalf of
himself and on behalf of any dependents, spouse, heirs, successors and assigns,
does hereby generally release, Safety Products Holdings, Inc., Norcross
Safety Products, L.L.C., and each of their respective predecessors, successors,
assignees, parent companies, members, subsidiaries, affiliates, officers,
directors, managers, partners, employees, agents and attorneys, past and
present (collectively, the “Released Persons”), from liability on or for any
and all charges, claims, controversies, actions, causes of action,
cross-claims, counterclaims, demands, debts, duties, sanctions, fines,
compensatory damages, liquidated damages, punitive or exemplary damages, other
damages, claims for costs, attorney’s fees, sums of money, suits, contacts,
covenants, controversies, agreements, promises, responsibilities, obligations and
accounts of any nature whatsoever in law or in equity, direct or indirect, both
past and present and whether or not now or heretofore known, suspected, or
claimed against the Released Persons including, but not limited to, any claim
relating to, by reason of, or arising out of, any acts, matters or omissions of
the Released Persons, Executive’s employment with any of the Released Persons,
events occurring during the course of such employment, or the termination
thereof; including but not limited to, any claim of unlawful discrimination due
to race, sex, religion, national origin, handicap, ancestry, or age or other
claim of unlawful employment discrimination; any claim that any of the Released
Persons violated any promise or agreement, either express or implied, with
Executive or that any of the Released Persons has terminated or caused
termination of Executive’s employment for any unlawful reason or in an unlawful
fashion, including specifically without limiting the generality of the
foregoing, any claim under the Family and Medical Leave Act, the Worker
Adjustment Retraining and Notification Act, the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Civil Rights Act of 1866, the Rehabilitation Act, the Labor
Management Relations Act, or the Equal Pay Act, each as amended from time to
time, or violated any other federal, state, or local law or regulation; or any
claim of emotional distress, defamation, wrongful termination, wages, severance
pay, bonus, sick leave, holiday pay, vacation pay, life insurance, health and
medical insurance, or any other fringe benefit. This release shall in no
respect have any force or effect with respect to (a) claims with respect
to Executive’s equity interests in Safety Products Holdings, Inc. to the
extent that such claims relate to facts and circumstances which form the basis
of a claim brought by an equityholder that is not an employee of Safety
Products Holdings, Inc. or its Subsidiaries; (b) claims for rights of
indemnification or exculpation under the constitutive documents of Safety
Products Holdings, Inc. or any of its Subsidiaries, provided that
Executive (or his guardian or personal representative) certifies to his
knowledge of the existence of any such claims as of the date of such release; (c) claims
with respect to the repurchase price or repurchase procedure of any of
Executive’s equity, or (d) the rights of the Executive arising from
breaches after the date hereof of any agreement to which the Executive and such
Released Person are a party.


 


16





















 


EXHIBIT C


 


17





















 


TERM SHEET FOR PROPOSED
MANAGEMENT STOCKHOLDERS AGREEMENT


 


	
  General

  	
   

  	
  •      Agreement
  terminates upon IPO of $100,000,000, complete liquidation or agreement for
  sale of all or substantially all assets, or upon termination by the Board.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Securities to bear legend

  
	
   

  	
   

  	
   

  
	
  Sale
  of Restricted Shares(1) and Rollover Shares (collectively “Shares”) by Management
  Holder

  	
   

  	
  •      Requires written consent of the Company,
  authorized by the majority of the Board of Directors.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Authorized sale of Shares requires notice
  to the Company and Odyssey of the relevant details (identity, price, terms)
  of the proposed transferee.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Upon receipt of notice, the Company has 45
  days to exercise its right of purchase Shares, in whole or in part.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Odyssey has the right to purchase any or
  all Shares the Company does not purchase within 15 days (following the
  Company’s 45 days).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Transfer must be effectuated within 90 days
  of notice to the Company and Odyssey

  
	
   

  	
   

  	
   

  
	
  Other
  Transfer of Shares by  Management
  Holder

  	
   

  	
  •      Permitted transferees: Company, Odyssey,
  immediate family members, trust for the benefit of immediate family members,
  or estate upon death.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Voting rights do not pass to family
  members, trust, or estate in such a transfer.

  
	
   

  	
   

  	
   

  
	
  Company
  Call Right

  	
   

  	
  •      The Company may exercise its right to
  repurchase Shares within the nine month period following the later of the
  Management Holder’s separation from service or exercise of Vested Options
  (subject to 6 month minimum holding period)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      FMV
  purchase price except in event of termination for cause, in which case the
  purchase price for Restricted Shares shall be the lesser of the FMV or the
  purchase price paid by the Management Holder ($0.01 if none).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      The Company’s call right is also triggered
  immediately before any Change in Control to enable the Shares to be dragged
  as part of a Change in Control at the same price per share and form of
  consideration.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Must repurchase within 60 days (or 10 days
  following necessary governmental approval) of exercise of repurchase right.

  
	
   

  	
   

  	
   

  
	
  Management
  Holder’s Put Right 

  	
   

  	
  •      Management Holder may cause the Company to
  repurchase all Shares within 9 months following termination not for cause,
  death

  



 










(1) For purposes hereof, Restricted Shares are shares received upon the
exercise of Vested Options.


 





















 


	
   

  	
   

  	
  or disability (but
  including termination for good reason)   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Purchase
  price is FMV

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Transfer
  no earlier than 6 months following Management Holder’s exercise of Vested
  Options.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Must
  repurchase within 60 days (or 10 days following necessary governmental
  approval) of exercise of put right.

  
	
   

  	
   

  	
   

  
	
  Involuntary Transfer

  	
   

  	
  •      In the
  event of default, foreclosure, forfeit, divorce or court order transferring
  shares involuntarily, Management Holder must notify the Company within 2
  days.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Company
  has 60 days to repurchase from transferee at FMV

  
	
   

  	
   

  	
   

  
	
  Repurchase Upon Company Disability

  	
   

  	
  •      If
  repurchase pursuant to repurchase right or put by Company would make Company
  unable to meet its other obligations, is prohibited by law, or would breach
  any credit agreement or indenture, Company will not be required to repurchase
  [open as to frequency and size of repurchases]

  
	
   

  	
   

  	
   

  
	
  Bring-Along Rights

  	
   

  	
  •      Odyssey
  holders can require Management Holders to sell the lesser of a designated
  number of shares or such Management Holder’s total number of shares multiplied
  by the total number of Odyssey shares over the total number of outstanding
  shares.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  •      Odyssey
  may require Management Holders to exercise vested options.

  
	
   

  	
   

  	
   

  
	
  Tag-Along Rights

  	
   

  	
  •      Management
  Holder may require third party purchaser to purchase the total number of
  shares to be purchased multiplied by the Management Holder’s number of shares
  over the sum of the Odyssey shares, management shares and all other shares
  exercising tag-along rights 

   

  •      Management
  Holders get 7 days notice from Odyssey, must exercise tag-along right within
  5 days

   

  •      If
  third party doesn’t purchase under same terms and conditions from Management
  Holder, Odyssey cannot tender shares unless they purchase from management
  under same terms and conditions under which they are selling.

  
	
   

  	
   

  	
   

  
	
  Preemptive Rights

  	
   

  	
  •      In
  connection with purchases by Odyssey and its affiliates, subject to customary
  carveouts