exv10w3



 





EXHIBIT 10.3




ASSIGNMENT AND ASSUMPTION AGREEMENT




     This Assignment and Assumption Agreement (this “Agreement”), by and
between James R. Tennant (the “Executive”), Home Products International, Inc.
(the “Company”) and Storage Acquisition Company, L.L.C. (the “Purchaser”), is
made effective as of, and is contingent upon, the Executive’s receipt of the
payment described in Section 1 below and the first acceptance (the “Share
Acceptance”) for payment of shares of common stock of the Company tendered
pursuant to the offer described in that certain Offer to Purchase dated
November 12, 2004 (the “Offer to Purchase”) and the related letter of
transmittal (the date on which the later of such events occurs, the “Effective
Date”) made pursuant to that certain Acquisition Agreement, dated as of October
28, 2004 (the “Acquisition Agreement”) between Purchaser and the Company.



RECITALS




     A. The Company and the Executive have entered into that certain Employment
Agreement, dated as of May 19, 1999, as amended as of October 14, 1999 and
December 15, 1999 (as amended, the “Employment Agreement”).



     B. As of the Effective Date, the Company will assign to the Purchaser the
right to receive the Executive’s consulting services under Section 13(b)(i) of
the Employment Agreement, the Purchaser will assume the Company’s obligation
under Section 13(b)(i) to pay for such services in the amount described in
Section 1 below, and the Executive consents to such assignment and agrees to
perform such consulting services to the Purchaser in exchange for the payment
described in Section 1 below, which amount shall be in full and final
satisfaction of any amounts due the Executive under Section 13(b)(i) of the
Employment Agreement.



     NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Purchaser and the Executive hereby agree as
follows:



AGREEMENT




     1. The Company hereby assigns to the Purchaser the Company’s right to
receive the consulting services from the Executive for a period of 24 months
following the Executive’s termination of employment with the Company (the
“Consulting Services”). The Purchaser hereby accepts the foregoing assignment
of the right to receive the Consulting Services. In consideration of the
Consulting Services and the release provided in Section 2 below, the Purchaser
hereby agrees to pay the Executive a lump sum cash payment of $4.1 million (the
“Payment”), in full and final satisfaction of any amounts due under Section
13(b)(i) of the Employment Agreement on the first business day following the
Share Acceptance. The Executive hereby consents to such assignment and agrees
to perform the Consulting Services for



 









 





the Purchaser, and agrees to accept the Payment in full and final satisfaction
of any amounts due under Section 13(b)(i) of the Employment Agreement.




     2. Release by the Executive.



          (a) The Executive hereby unconditionally, irrevocably and absolutely
releases and discharges the Company, the Purchaser, each of their respective
direct and indirect parents, affiliates and subsidiaries, and each of the
foregoing’s respective officers, directors, shareholders, managers, employees,
agents, investors, and representatives (collectively, the “Released Parties”)
from any actions, causes of action, suits and claims of every kind and
description whatsoever, whether known or unknown, which existed or may have
existed at any time from the beginning of the world up to the Effective Date,
related in any way to any transactions or occurrences involving the Company, or
any parent or subsidiary of the Company or any person acting on behalf of or
through the Company, and the Executive or any affiliate of Executive through
the Effective Date, or any matter, cause or thing whatsoever which shall have
arisen at any time from the beginning of the world up to the Effective Date, to
the fullest extent permitted by law, including, but not limited to, the
Executive’s employment with or service to the Company (as an employee, officer,
director or otherwise), claims related to Section 13(b)(i) of the Employment
Agreement (except claims for payment of the Payment), claims related to the
Acquisition Agreement, the Offer to Purchase, that certain Agreement and Plan
of Merger dated as of June 2, 2004, by and between JRT Acquisition, Inc. and
the Company (the “JRT Acquisition Agreement”) or the termination of the JRT
Acquisition Agreement, and all other losses, liabilities, claims, charges,
demands and causes of action, known or unknown, suspected or unsuspected,
arising directly or indirectly out of or in any way connected with the any of
the foregoing, Executive’s employment with or service to the Company or the
ending of those relationships, or Executive’s ownership of Common Stock, other
capital stock or stock options of the Company or Executive’s participation or
non-participation in any employee benefit plans of the Company, or Purchaser’s
acquisition of the Company, in each case except those claims and rights that
are specifically excluded from this release below in this Section 2(a). Except
as set forth herein, this release includes, but is not limited to, any claims
for wages, compensation, bonuses, employment benefits, stock options, equity
interests or damages of any kind whatsoever, arising out of any common law
torts, arising out of any contracts, express or implied, any covenant of good
faith and fair dealing, express or implied, any theory of wrongful discharge,
any theory of negligence, any theory of retaliation, any theory of
discrimination or harassment in any form, any legal restriction on the
Company’s right to terminate employees, or any federal, state, or other
governmental statute, executive order, or ordinance, including, without
limitation, Title VII of the Civil Rights Act of 1964 as amended, the Civil
Rights Act of 1991, the Civil Rights Act of 1866, 42 U.S.C. § 1981, the
Americans with Disabilities Act, the Family and Medical Leave Act, the
Employment Retirement Income Security Act, or any other legal limitation on or
regulation of the employment relationship, any claims for breach of fiduciary
duties, negligence or malfeasance, all claims for attorneys’ fees, costs and
expenses. Notwithstanding anything to the contrary contained herein, the
release set forth in this Section 2 shall not include only: (i) claims



2









 





for those benefits and payments due to the Executive pursuant to employee
benefit plans of the Company of which the Executive is a participant or
pursuant to the Employment Agreement (other than Executive’s right under
Section 13(b)(i) of the Employment Agreement), in accordance with the
applicable terms thereof, including, without limitation, as described on
Schedule 1 hereto; (ii) claims for payment of the Payment in accordance with
this Agreement; (iii) any claim or right of indemnification by the Company
under the organizational documents of the Company, by law or under the
indemnification provisions of the Employment Agreement or any other applicable
agreement with the Company, including any indemnification pursuant to any
applicable laws; (iv) any claim or right under the Company’s directors and
officers liability coverage; and (v) any claim or right with respect to payment
for common stock or stock options of the Company tendered in accordance with
the terms of the Offer to Purchase. The parties agree that the benefits and
compensation due to Executive under the Employment Agreement and option plan
include, but are not limited to, those described on Schedule 1 hereto, and the
amounts for each item scheduled in Schedule 1 are the correct and only amounts
owing the Executive for each such item.




          (b) The Executive represents that he has not filed any complaints, charges
or lawsuits against either the Company or the Purchaser with any governmental
agency or any court, and agrees that the Executive will not initiate, assist or
encourage any such actions, except as required by law and except as may be
required to enforce his rights with respect to those claims that are not
released herein. The Executive further agrees that if a commission, agency, or
court assumes jurisdiction of such claim, complaint or charge against either
the Company or the Purchaser on behalf of the Executive, the Executive will
request the commission, agency or court to withdraw from the matter unless such
matter is with respect to claims not released herein.



          (c) The Executive represents and warrants that he is the sole owner of the
actual or alleged claims, rights, causes of action, and other matters which are
released herein, that the same have not been assigned, transferred, or disposed
of in fact, by operation of law, or in any manner, and that he has the full
right and power to grant, execute and deliver the releases, undertakings, and
agreements contained herein.



          (d) The parties acknowledge that they may discover facts or law different
from, or in addition to, the facts or law that they know or believe to be true
with respect to the claims released in this Agreement and agree, nonetheless,
that this Agreement and the releases contained in it shall be and will remain
effective in all respects notwithstanding such different or additional facts or
the discovery of them.



          (e) Except in the event of fraud and except as specified above, the
parties declare and represent that they intend this Agreement to be complete
and not subject to any claim of mistake, and that the releases herein express a
full and complete release on the part of each party and, regardless of the
adequacy or inadequacy of the consideration, the parties intend the releases
herein to be final and complete. The parties execute these releases with the
full



3









 





knowledge that they cover all possible claims against each other, except
as specified above, to the fullest extent permitted by law.




     3. Knowing and Voluntary Agreement. The Executive agrees that he has
carefully read and fully understands all aspects of this Agreement including
the fact that this Agreement releases any claims that the Executive might have
against the Company, the Purchaser and the other Released Parties except as
specified above. Finally, the Executive agrees that he has been advised to
consult with an attorney prior to executing this Agreement, and that he has
either done so or knowingly waived the right to do so, and now enters into this
Agreement without duress or coercion from any source.



     4. Governing Law. The construction and performance of this Agreement
shall be governed by the laws of the State of Illinois without giving effect to
the choice of law provisions thereof.



     5. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but each of which
together shall constitute one and the same instrument.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.



COMPANY:




HOME PRODUCTS INTERNATIONAL, INC.




	 	 	 
	By:
	 	/s/ Douglas S. Ramsdale
	

	 	

	

	 	Douglas S. Ramsdale
	

	 	Chief Executive Officer







PURCHASER:




STORAGE ACQUISITION COMPANY, L.L.C.




	 	 	 
	By:
	 	/s/ Ellen Havdala
	

	 	

	

	 	Ellen Havdala
	

	 	Vice President







4









 





EXECUTIVE:




	 	 	 
	By:
	 	/s/ James R. Tennant
	

	 	

	

	 	James R. Tennant








5










 





SCHEDULE 1

ASSIGNMENT AND ASSUMPTION AGREEMENT

PAYMENTS DUE EXECUTIVE




	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contract Obligations to J. Tennant
	 	$	 	 	 	 	 	 	 	 	 	 
	Severance - 3 times the sum of the average salary and bonus during each of the two years immediately prior to the change of
control; payable within 5 business days of termination.
	 	 	 	 	 	 	2,824,317.39	 	 	 	 	 
	Options
	 	 	 	 	 	 	49,000.00	 	 	 	 	 
	EIP shares — payable within 10 days of the change in control
	 	 	 	 	 	 	137,731.50	 	 	 	 	 
	Payment for 24 month consulting services; payable on date of termination
	 	 	 	 	 	 	 	 	 	 	 	 
	— $5 million less the value of options cashed out
	 	 	 	 	 	 	4,100,000.00	 	 	 	 	 
	2004 bonus
	 	 	 	 	 	 	856,235.95	 	 	50.5/52 converts to 53 week salary basis
	2004 Profit Sharing Contribution at 1% of eligible pay
	 	 	 	 	 	 	13,319.23	 	 	 	 	 
	Earned but untaken vacation; 2 weeks


— vacation is earned in the year prior to when it is taken
	 	 	 	 	 	 	18,920.00	 	 	 	 	 
	2 years medical and other insurance benefits including the $5 million term life insurance policy
	 	 	 	 	 	 	 	 	 	 	 	 
	Additional payment for excise taxes imposed by Section 4999 of the IRC of 1986
	 	 	 	 	 	 	 	 	 	 	 	 
	Letter of credit for $375,000 upon request
	 	 	 	 	 	 	 	 	 	 	 	 







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Fiscal years
	 	Salary
	 	MIP
	 	EIP
	 	Total

	 
	 	 	2002	 	 	 	489,512.00	 	 	 	474,501.00	 	 	 	467,484.00	 	 	 	1,431,497.00	 
	 
	 	 	2003	 	 	 	491,920.00	 	 	 	—	 	 	 	—	 	 	 	491,920.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,923,417.00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	Average	 	 	961,708.50	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 







	Calendar year calculation	 	 	 	 
	 	2002	 	 	Pay per day
	 	 	3,932.68	 
	 	 	 	 	number of
days in 2002, 12/14-12/28
	 	 	15	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	 
	 	 	58,990.26	 
	 	 	 	 	 
	 	 	
 	 
	 	2003	 	 	52 weeks ended 12/27/03 364 days/52 weeks
	 	 	491,920.00	 
	 	 	 	 	 
	 	 	
 	 
	 	2004	 	 	Pay per day
	 	 	 	 
	 	 	 	 	salary
	 	 	1,351.43	 
	 	 	 	 	bonus per day
	 	 	 	 
	 	 	 	 	MIP
	 	 	1,419.00	 
	 	 	 	 	EIP
	 	 	1,013.57	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	 
	 	 	3,784.00	 
	 	 	 	 	number of days in 2004, 12/28/03-12/13/04
	 	 	352	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	 
	 	 	1,331,968.00	 
	 	 	 	 	 
	 	 	
 	 
	 	 	 	 	Total 2 years pay
	 	 	1,882,878.26	 
	 	 	 	 	Three times average pay
	 	 	2,824,317.39