Exhibit
10.1


June 30, 2007


Mr. Ken Martell

____________


____________


RE: Agreement


Dear Ken:


This
letter is intended to set forth the terms of our agreement regarding your
future retirement from Salisbury Electrical Safety L.L.C. (the “Company”).  As we discussed, you wish to retire effective
as of March 31, 2008 (hereinafter referred to as “Retirement Date” or “Resignation
Date”) from the Company.  Safety
Products Holdings, Inc. (“Holdings”) and the Company (collectively
referred to as “We”) will accept your resignation. The following sets
forth the terms of our agreement:


1.             Acknowledgement
of Resignation.  We acknowledge and
agree that your resignation will be effective as of the Resignation Date. We
also acknowledge that effective as of the close of business on the Resignation
Date, you will resign from your position as the Vice President and General
Manager of the Company, and any, and all other, offices, positions and titles
you hold or may hold with the Company and each of its Affiliates.   As we discussed, prior to the Resignation
Date, the Company may promote Jeff Morris to the position of Vice President and
General Manager of the Company and, in such event, you will become President of
the Company and shall report to the Holding’s chief executive officer, subject
to the overall authority of the Company’s board of directors.


2.             Consideration.


(a)           Subject to the other terms and
conditions of this Section 2 and Section 8(j), if your employment
relationship with the Company is terminated on the Resignation Date, the
Company agrees to make the payments to you and provide the benefits to you as
described in this Section 2(a):


(i)                                     Post
Resignation Payments.  For the period
beginning on the Resignation Date and ending on the close of business on
December 31, 2008 (the “Post-Resignation Period”), the Company will make
aggregate cash payments to you in an aggregate amount equal to $166,500 (the “Post-Resignation
Payments”); provided that, (1) such payments shall be subject to
reduction in respect of applicable federal, state and local tax withholdings;
and (2) it is expressly understood that included in the Post-Resignation
Payments is such severance, vacation and other payments that may be due to
you.  The Post-Resignation Payments shall
be paid in regular installments (subject to reduction in respect of applicable
federal, state and local tax withholdings) in a manner consistent with the
Company’s general payroll practices (as in effect on the Resignation Date).



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(ii)                                  Health
Care Benefits.  During the Post-Resignation
Period, you will be entitled to continue to participate in the group medical,
dental and vision plans (“Health Care Benefit Plans”) (as applicable) of
the Company in which you were a participant on the Resignation Date as if you
were an active employee of the Company during the Post-Resignation Period.   Your participation in the Health Care Benefits
Plans during the Post-Resignation Period shall be subject to the normal
eligibility requirements of such plans and you will pay all applicable
premiums, contributions, deductibles, co-payments, and out-of-pocket expenses
under such plans that would normally apply under the terms and conditions of
such plans to an active employee of the Company.  Any changes made to any such plans during the
Post-Resignation Period shall apply to you as if you were an active employee
covered under the applicable plan, including any change that results in an
increase or decrease in costs paid by employees under any such plan during the
Post-Resignation Period.  The Company may
deduct your premium payments and/or contributions to such plans from the
Post-Resignation Payments.  Notwithstanding the foregoing, you
acknowledge and agree that if you should obtain other employment and, as a
result of such employment, you are entitled to receive medical coverage from
your new employer at any time during the Post-Resignation Period, your right to
continue to participate in the Company’s Health Care Benefit Plans hereunder
shall immediately cease as of the earlier of the date that your coverage under
your new employer’s medical plan commences or could have commenced.


(iii)                               Other
Benefit Plans.  Notwithstanding the
foregoing or any other agreement or arrangement with the Company and/or any of
its Affiliates to which you are a party or subject, you acknowledge and agree
that, as of the Resignation Date, you shall not be entitled to participate in
any other benefit plan of the Company, including without limitation any
vacation plan, cafeteria plan, long-term disability plan, 401(k) plan or
life insurance plan of or maintained by the Company and/or any of its
Affiliates.  The preceding sentence,
however, shall not limit any rights that you may otherwise have to continue
benefits under applicable law (i.e., the right
to health care continuation coverage under COBRA).  Your entitlement to continuation coverage
under Section 4980B of the Internal Revenue Code of 1986, as amended, shall
commence on December 31, 2008 or, if earlier, the date during the Post-Resignation
Period that you cease to be covered under the Company’s Health Care Benefit
Plans.


(iv)                              Automobile
Allowance.  In addition, during the
Post-Resignation Period, the Company shall provide you with a monthly
automobile allowance in accordance with past practice.


(b)           General Release.  The Post-Resignation Payments and other
benefits described in Section 2(a) shall become due and owing if, and
only if,  you execute and deliver to the
Company and Holdings on or prior to the Resignation Date a general release in
favor of them in the form attached hereto as Exhibit A (the “General
Release”).  The General Release will
become effective, provide you do not revoke or breach the terms of the General
Release and you do not apply for unemployment compensation chargeable to the
Company or any of its Affiliates during the Post-Resignation Period.



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(c)           2007 Bonus.  You shall not be entitled to any salary,
bonus, severance, compensation or benefits from and after the Resignation Date
from the Company, its subsidiaries or any of their Affiliates, except as set
forth in Section 2(a) above; it being understood and agreed that (i) for
the avoidance of doubt, you shall not be entitled to any bonus (or any portion
thereof) in respect of any bonus period ending on or after January 1, 2008, and
(ii) this Section 2(c) shall not be deemed to waive your right to any
portion of a bonus from a prior period ending on or prior to December 31, 2007
(i.e., from a prior year) that has been fully earned and was fully payable
prior to the Resignation Date but that had not yet been paid.


(d)           Withholding.  All amounts payable to you as compensation
hereunder shall be subject to all required and customary federal, state and
local withholding by the Company.


3.             Post-Resignation Vesting of
Options.


(a)           Subject to Section 3(b) and Section
8(j) hereof, we acknowledge and agree that, for purposes of the
Non-Qualified Stock Option Agreement, dated January 2, 2006 (as amended,
modified and/or supplemented from time to time, the “Option Agreement”),
unless your employment relationship with the Company and its subsidiaries is
terminated prior to the Resignation Date, (I) solely for purposes of the
vesting provisions in Section 3.1 of the Option Agreement, you shall be
treated as if you were continuously employed by the Company until the expiration
of the Post-Resignation Period, (II) for purposes of Section 3(f) of the
Option Agreement, the date of your “Termination of Employment” shall be deemed
to be December 31, 2008, (iii) Section 3.3(b) of the Option Agreement is
amended by deleting such provision in its entirety and replacing it with the
following: “Unless the Committee approves a later date, the 180th day following
the date of the Optionee’s Termination of Employment for any reason other than
(i) termination by the Company for Cause or due to Disability; or (ii) the
Optionee’s death; or”, and (III) for purposes of Section 4.7 of the
Option Agreement, the term “Restricted Period” shall mean the period beginning
on the date you are first employed by the Company and/or any of its subsidiaries
and ending on June 30, 2010.  Each
capitalized term used, but not defined herein shall have the meaning assigned
to such term in the Option Agreement.


(b)           The provisions of Section 3(a)
shall become effective if, and only if, you have executed and delivered to the
Company and Holdings the General Release and the General Release has become
effective, and only so long as you have not revoked or breached any of the
provisions of the General Release and/or the Option Agreement.


(c)           Reference is hereby made to that
certain Management Stockholders Agreement, dated as of July 19, 2005 (as
amended, modified and/or supplemented from time to time, the “Management
Stockholders Agreement”), by and among Holdings, you and the other persons
and entities party thereto. Subject to Section 8(j) hereof, the parties
hereto acknowledge and agree that, for purposes of Sections 2, 3
and 5 of the Management Stockholders Agreement, unless your employment
relationship with the Company and its subsidiaries is terminated prior to the
Resignation Date, the date of your “Termination of Employment” shall be deemed
to be December 31, 2008.


4.             Other Modifications.  Except as expressly modified by the terms and
conditions of this letter agreement, the terms and conditions of your existing employment
agreement and the Option 



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Agreement shall
survive the execution and delivery of this letter agreement and shall remain in
full force and effect.  You represent and
warrant that on or prior to the Resignation Date, you shall return to Holdings
and its subsidiaries any and all property, tangible or intangible, relating to
its business, which you possessed or had control over at any time, including
but not limited to company-provided credit cards, building or office access
cards, keys, computer equipment, manuals, files, documents, records, software,
customer data base and other data, and that you shall not retain any copies,
compilations, extracts, excerpts, summaries or other notes of any such manuals,
files, documents, records, software, customer data base or other data.


5.             Representations and Warranties.  You hereby represent and warrant to Holdings
and the Company that: (a) you have been offered ample and sufficient time after
receipt of this letter agreement within which to consider it; (b) you have
carefully read and fully understand all of the provisions of this letter
agreement; (c) you have consulted with an attorney prior to executing and
delivering this letter agreement and acknowledge and agree that you understand
your rights and obligations hereunder; (d) you have sufficient capacity to
enter into this letter agreement and perform his obligations hereunder; and (e)
this letter agreement has been duly executed and delivered by you and
constitutes the valid and binding obligations, enforceable against you in
accordance with its terms.


6.             Status.    From
and after the Resignation Date, you agree not to hold yourself out in any
manner as a director, manager, officer, ­employee, agent or in any other manner
as a representative of Holdings, the Company or any of their respective
subsidiaries or Affiliates.  For purposes
of this Agreement, the term “Affiliate” of any particular person means:
(i) any other person controlling, controlled by or under common control with
such particular person, where “control” means the possession, directly or
indirectly, of the power to direct the management and policies of a person
whether through the ownership of voting securities, contract or otherwise, and
(ii) any member, manager, shareholder, partner or officer of such person.  You hereby covenant to Holdings and the
Company that you shall not, directly or indirectly, publicly or privately,
make, publish or solicit or encourage others to make, publish or solicit any
disparaging or otherwise negative statements, comments, announcements or
remarks concerning any Released Person (as defined in Exhibit A); provided
that this sentence shall not prohibit or restrict you from answering truthfully
any question you are asked under oath in any legal proceeding.


7.             Notices.  All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this letter
agreement shall be in writing and shall be deemed to have been given (a) when
delivered personally to the recipient, (b) one business day after being sent to
the recipient by reputable express courier service (charges for overnight
delivery prepaid), (c) three business days after being deposited in the United
States addressed to the recipient by, first class, postage prepaid, or (d) when
received before 4:00 p.m. Chicago time by facsimile, if received on a business
day and otherwise on the business day next following such receipt.  Such notices, demands and other
communications shall be sent to Holdings and to the Company at the address
indicated below:



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If
to the You:


                                 Ken
Martell


_____________________


_____________________


_____________________


If to Holdings or
the Company:


Safety Products Holdings,
Inc.


2001 Spring Road


Suite 425


Oak Brook, IL  60523


Attention:              Robert A. Peterson


Tel No.:                  (630)
572-5715


Fax No.:                  (630)
572-8518


and to:


Kirkland & Ellis
LLP


200 East Randolph Drive


Chicago, Illinois 60601


Attention:              Richard J. Campbell


Tel. No.:                 (312) 861-2000


Fax
No.:                  (312)
861-2200


8.                                      General
Provisions.


(a)           Severability.  Whenever possible, each provision of this
letter agreement (including the General Release attached hereto as Exhibit A)
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this letter 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 will
not affect any other provision or any other jurisdiction, but this letter
agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.  If this letter agreement is held
to not satisfy the requirements of the Older Workers Benefit Protection Act or
any other law, rule or regulation for an effective release of any age
discrimination claim by you, you specifically agrees that such determination
will not effect the validity and enforceability of all other provisions of this
letter agreement, including without limitation the General Release with respect
to all other claims.



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(b)           Complete Agreement.  This letter agreement (including the General
Release attached as Exhibit A hereto) and the provisions of the Relevant
Agreements which remain in full force and effect as described herein, 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
or thereof in any way.


(c)           Counterparts.  This letter agreement may be executed in
separate counterparts (including by facsimile or electronic transmission), 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.  Except as otherwise provided herein, this
letter agreement (including the General Release attached hereto as Exhibit A)
shall bind and inure to the benefit of and be enforceable by you, the Company,
Holdings and their respective successors and assigns.


(e)           Choice of Law.  All questions concerning the construction,
validity and interpretation of this letter agreement (including the General
Release attached hereto as Exhibit A) will be governed by the internal
law, and not the law of conflicts, of the State of Illinois.


(f)            Disputes.  Except for claims for injunctive relief or
specific performance, any dispute or controversy arising under or in connection
with this letter agreement (including the General Release attached hereto as Exhibit
A) shall be settled exclusively by binding arbitration in Chicago, Illinois
in accordance with the Rules of Dispute/JAAMS then in effect, except to the
extent inconsistent with this letter agreement. 
In such an arbitration, the arbitrators shall permit discovery of
documents and witnesses to the extent permitted under United States Federal
Rules of Civil Procedure 26 through 34. 
Notwithstanding the foregoing, the arbitrators shall be empowered only
to interpret and apply the terms of this letter agreement, and shall not be
empowered to revise or amend any provision in this letter agreement, nor to
make a decision based on any such revision or amendment.  The arbitral award shall state the reasons
for the award and relief granted, shall be final and binding on the parties to
the arbitration, and may include an award of costs, including reasonable
attorneys’ fees and disbursements.  Any
award rendered may be enforced in any court of any state or country having
jurisdiction over the parties and/or their assets.


(g)           Amendment and Waiver.  The provisions of this letter agreement
(including the General Release attached hereto as Exhibit A) may be
amended and waived only with the prior written consent of each of the parties 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 holiday
in the state of Illinois, the time period shall be automatically extended to
the business day immediately following such Saturday, Sunday or holiday.


(i)            Third Party Beneficiaries.  Certain provisions of this letter agreement
(including the General Release attached hereto as Exhibit A) are entered
into for the benefit of and shall be enforceable by the Released Persons (as
defined in Exhibit A) as provided herein.  Except for the rights of your estate and
heirs to payments and benefits hereunder pursuant to the applicable laws of
descent and distribution 



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and other than as
provided in the preceding sentence, this letter agreement is for the benefit of
the parties hereto and their permitted successors and assigns and no other
person or entity (other than the Released Persons) shall be entitled to
exercise any rights hereunder or obtain any benefits from this letter
agreement.


(j)            Effectiveness.  Notwithstanding any provision herein to the
contrary, in the event that your employment with the Company and its
Subsidiaries is terminated by the Company or by you prior to the Resignation
Date, this letter agreement shall be nullified and shall have no further force
and effect.


	
  

  	
  SAFETY PRODUCTS HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R.A. Peterson

  
	
   

  	
  Name:

  	
  R.A. Peterson

  
	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SALISBURY ELECTRICAL SAFETY L.L.C.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R.A. Peterson

  
	
   

  	
  Name:

  	
  R.A. Peterson

  
	
   

  	
  Title:

  	
   

  



 


Acknowledged and Agreed
to


this 30 day of June,
2007


	
  /s/ Ken Martell

  	
   

  
	
  KEN MARTELL

  	
   

  



 



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GENERAL RELEASE


This General Release (this "Release")
is being delivered concurrently with the execution and delivery of that certain letter
agreement, dated as of June    , 2007 (as amended, modified
and/or supplemented from time to time, the "Agreement"), by
and among the undersigned, Salisbury Electrical Safety L.L.C., a Delaware
limited liability company (together with its subsidiaries, the "Company")
and Safety Product Holdings, Inc., a Delaware corporation ("Holdings").  Each capitalized term used, but not defined
herein shall have the meaning assigned to such term in the Agreement


 


Effective as of the date hereof and
in consideration of the Company's and Holdings' execution and delivery of the
Agreement, the undersigned (for himself, his heirs,
assigns and executors) forever, releases, discharges and covenants not to sue
Holdings, the Company and each of their predecessors, successors, assignees,
parent companies, stockholders (including without limitation, the Principal
Stockholders (as defined in the Option Agreement) and their Affiliates),
subsidiaries, Affiliates, managers, officers, directors, managers, partners,
employees, agents and attorneys, past and present (collectively, the "Released
Persons") from any and all claims, suits, demands, causes of action,
contracts, covenants, obligations, debts, costs, expenses, attorneys' fees,
liabilities of whatever kind or nature in law or equity, by statute or
otherwise whether now known or unknown, vested or contingent, suspected or
unsuspected, and whether or not concealed or hidden, which have existed or may
have existed, or which do exist, through the date hereof of any kind ("Claims"), which relate in any
way to (i) the undersigned's
employment with Holdings and/or the Company and/or any of their subsidiaries or
Affiliates and/or (ii) the undersigned's execution and
delivery of the Agreement and the consummation of the transactions contemplated
thereby (including, without limitation, the undersigned's resignation of
employment contemplated thereby).  In no event shall the Claims being released be
deemed to include any of the
undersigned's rights under Sections 2 and 3 of the Agreement and any claim for
breach of the Agreement arising after the Resignation Date; provided that the undersigned's employment with the Company
and its Subsidiaries is not terminated by the Company or by undersigned prior
to the Resignation Date.


 


In executing this
Release, the undersigned acknowledges that he intends that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied.  The undersigned expressly
consents that the releases, discharges and covenants in this Release shall be
given full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the effectiveness of a
general release of unknown, unsuspected and unanticipated Claims), if any, as
well as those relating to any other Claims hereinabove mentioned or
implied.  The undersigned acknowledges
and agrees that this waiver is an essential and material term of the Agreement
and, without such waiver, Holdings and the Company would not have made the
agreements and covenants therein made. 
The undersigned further agrees that in the event that the undersigned
brings a Claim in which he seeks damages against Holdings or the Company, or in
the event the  undersigned seeks to
recover against Holdings or the Company in any Claim brought by a governmental
agency on your behalf, this Release shall serve as a complete defense to such Claims.













 


This Release shall become
effective and enforceable immediately upon execution by the undersigned.  However, with respect solely to any claim of
age discrimination under the Age Discrimination in Employment Act of 1967, as
amended, this Release will become effective and enforceable only after the
expiration of seven days following its execution by the parties hereto and
during such seven-day period the undersigned may revoke this Release, solely
with respect to his release of claims under such statute, if he so desires by
delivering written notice during such seven-day period to Holdings and the
Company (a "Revocation Notice"); provided that if the
undersigned so elects to revoke this Release with respect to his release of
claims under such statute, the Company and Holdings may, by giving written
notice (a "Termination Notice") to the undersigned within ten
days after delivery of the Revocation Notice, elect to terminate their
obligations under the Agreement and thereafter enforce
any rights that they may have under applicable law and any and all of the
agreements to which the undersigned is party or subject.  


 


The undersigned agrees that the provisions of this
Release may not be amended, waived, changed or modified except by an
instruments signed by each of the undersigned, Holdings and the Company.  


 


The undersigned hereby represents and warrants to
Holdings and the Company that (a) the undersigned has been offered at least
twenty-one (21) days from the date he received this Release to consider it; (b)
the undersigned has carefully read and fully understands all of the provisions
of this Release; (c) the undersigned has consulted with an attorney prior to
executing and delivering this Release and acknowledges and agrees that the
undersigned understands his rights and obligations hereunder, (d) the
undersigned has sufficient capacity to enter into this Release and perform his
obligations hereunder, (e) this Release has been duly executed and delivered by
the undersigned and constitutes the valid and binding obligation of the
undersigned, enforceable against the undersigned in accordance with its terms
and (f) the undersigned has signed this Release knowingly and voluntarily and
that the undersigned has not been threatened or coerced in any way.


 


	
  DATE:

  	
  6/30/07

  	
   

  	
  /s/ Ken Martell

  
	
  

  	
   

  	
  Ken Martell

  



 



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