Document:

exv10w42

 

Exhibit 10.42

PARTIAL RELEASE AND AGREEMENT

     This PARTIAL RELEASE AND AGREEMENT (“Agreement”) is made and entered into by and between ROY
C. CUNY, SMITH & WESSON HOLDING CORPORATION (“S&W”) and STINGER SYSTEMS, INC.

RECITALS

     WHEREAS, Roy C. Cuny and S&W were parties to an Executive Employment Agreement, dated October
22, 2002;

     WHEREAS, pursuant to the terms of Section 4 of the Executive Employment Agreement, Cuny, for
good and valuable consideration, agreed to a confidentiality provision and restrictive covenants
not to compete and not to interfere with S&W’s customers and employees;

     WHEREAS, Cuny and S&W severed their employment relationship by entering into a Resignation and
Release Agreement, executed by Cuny on November 19, 2004;

     WHEREAS, pursuant to the terms of the Resignation and Release Agreement, Cuny, for good and
valuable consideration, reaffirmed the reasonableness and necessity of the confidentiality
provision and restrictive covenants of the Executive Employment Agreement, which were incorporated
by reference in the Resignation and Release Agreement;

     WHEREAS, the confidentiality provision and restrictive covenants survived the Resignation and
Release Agreement and remain in full force and effect today;

     WHEREAS, Cuny and Stinger Systems desire to enter into an employment relationship without
violating or inducing a breach of Cuny’s covenant not to compete with S&W; and

     WHEREAS, S&W is willing to waive as set forth herein Cuny’s covenant not to compete.

COVENANTS

     THEREFORE, in consideration of the covenants and agreements set forth herein and other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

     1. Recitals and Representations. The parties hereby acknowledge the correctness and
accuracy of the foregoing recitals. Cuny represents and warrants that he has complied, at all
times, with the terms of the restrictive covenants as they are both reasonable and enforceable.

     2. Payment. Upon execution of this Agreement, Stinger Systems shall pay S&W an amount
equal to $152,000. That sum represents a reimbursement of $100,000 in severance compensation,
$27,000 in fringe benefits, and $25,000 in expenses paid to or on behalf of Cuny under the
Resignation and Release Agreement through December 31, 2004. Stinger Systems shall pay this sum
via a wire transfer on or before January 10, 2005.

     3. Partial Release and Waiver of Claims and Rights to Payment.

          (a) Except as limited by Paragraphs 4 and 5 of this Agreement, S&W for itself and on behalf of
its subsidiaries, related, and affiliated companies, and the predecessors,

 

 

successors, and assigns of each of the foregoing, hereby releases Cuny and Stinger Systems
from any and all claims, charges, complaints, liabilities, and obligations that it may have against
Cuny and/or Stinger Systems arising out of Cuny’s covenant not to compete contained in Section 4.1
of the Executive Employment Agreement. This release shall be limited to Stinger Systems’ and
Cuny’s negotiations and Cuny’s subsequent employment with Stinger Systems, effective January 1,
2005.

          (b) Cuny, for himself and, as applicable, his respective agents, heirs, beneficiaries,
attorneys, successors, and assigns, hereby fully, forever, irrevocably, and unconditionally
releases S&W, its subsidiaries, related, and affiliated companies, their predecessors, successors,
and assigns, and the past and current directors and officers of each and all of the foregoing from
any and all payments or claims to payments, which he may have against any of the foregoing parties,
whether now known or unknown, and whether asserted or unasserted, arising out of the terms of the
Executive Employment Agreement and/or the Resignation and Release Agreement. Cuny understands and
agrees that this release discharges any obligation S&W has to make additional payments to him or
for his benefit under the Executive Employment Agreement and/or the Resignation and Release
Agreement, including, but not limited to, additional severance pay, benefits, and expense
reimbursements. Notwithstanding the foregoing, Cuny and S&W’s obligations under Section 3, titled
Assistance and Cooperation in Litigation and Investigations, of the Resignation and Release
Agreement shall remain in full force and effect.

          (c) The parties acknowledge and agree that, except as expressly modified herein, this
Agreement shall not discharge, release, or otherwise alter any obligation Cuny owes to S&W, its
subsidiaries, related, and affiliated companies, or the successors and assigns of any of the
foregoing.

          (d) This release may be pled as a complete bar to any claim hereafter brought with respect to
the matters released herein. This release does not waive claims that may arise after the date of
this Agreement as executed to the extent those claims have not been released herein.

          (e) The parties acknowledge and agree that the consideration each is receiving under this
Agreement is sufficient consideration to support the release of all entities identified in this
Paragraph 3, and that said consideration is in addition to anything of value to which each is
already entitled.

     4. Enforceability of Certain Restrictive Covenants. Cuny acknowledges that, during
the term of his employment with S&W, he was provided access to core strategic and competitive
information at a very senior level. Cuny acknowledges that Section 4 of the Executive Employment
Agreement includes, among other things, covenants not to solicit or interfere with the employees
and customers of S&W, its subsidiaries, related, and affiliated companies; not to disclose trade
secrets or confidential business information; and not to disparage S&W and its subsidiaries,
related and affiliated companies. Employee hereby reaffirms the reasonableness and necessity of
those covenants and agrees that they survive both his termination and this Agreement, are hereby
incorporated by reference into this Agreement, and thus remain in effect upon the execution of this
Agreement. Cuny and Stinger Systems agree that these covenants are

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reasonable and enforceable, and that the release in paragraph 3 above shall not discharge
Cuny’s ongoing obligations to comply with those covenants.

          Stinger Systems represents and warrants that it will not, directly or indirectly, request,
direct, counsel, or condone any breach or threatened breach by Cuny of those restrictive covenants.
Stinger Systems further represents and warrants that it will not, directly or indirectly, recruit,
solicit, or attempt to solicit for employment as an employee or independent contractor any
individual who was an employee of S&W or one of its subsidiaries, related, or affiliated companies
as of December 1, 2004.

     5. Continuing Covenant Not to Compete.

          (a) In the event that Cuny’s anticipated employment with Stinger Systems terminates,
regardless of the reason, prior to the expiration of 24 months after the Resignation Date, as
defined in the Resignation and Release Agreement, the terms of the covenant not to compete set
forth in Section 4.1 of the Executive Employment Agreement shall remain fully and completely
enforceable as to any other company, firm, entity, or person.

          (b) In the event that Stinger Systems shall, directly or indirectly (whether as a parent,
subsidiary, or affiliate of a company) engage in the manufacture or sale of handguns, rifles,
shotguns, handcuffs, or restraints (of the type manufactured by S&W as of the date of this
Agreement) prior to the expiration of 24 months after the Resignation Date, as defined in the
Resignation and Release Agreement, the terms of the covenant not to compete set forth in Section
4.1 of the Executive Employment Agreement shall become fully and completely enforceable for the
remainder of the 24-month period.

     6. Venue. The parties hereby irrevocably agree that any legal action or proceeding
arising out of or relating to this Agreement or any actions contemplated hereby shall be brought in
a court of competent jurisdiction located in Massachusetts. The parties hereby expressly submit to
the personal jurisdiction and venue of such courts for the purposes thereof and expressly waive any
claim of improper venue and any claim that such courts are an improper forum. The parties hereby
irrevocably consent to the service of process of any of the aforementioned courts in any suit,
action, or proceeding.

     7. Severability. Should any of the provisions of this Agreement be declared or be
determined by any court to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby, and said illegal or invalid part, term or provision shall
be deemed not to be a part of this Agreement.

     8. Authority – No Assignment of Claims. The parties represent and warrant that each
has the sole right and exclusive authority to execute this Agreement and that each has not sold,
assigned, pledged, transferred, encumbered, conveyed, or otherwise disposed of any claim or demand
relating to any matter covered by this Agreement. Cuny specifically represents and warrants that
he has not sold, assigned, pledged, transferred, encumbered, conveyed, or otherwise disposed of any
right or interest in any payment from S&W.

     9. Entire Agreement. This Agreement sets forth the entire agreement between the
parties thereto and fully supersedes any and all prior agreements pertaining to the subject matter

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hereof, other than the Executive Employment Agreement and the Resignation and Release
Agreement, to the extent the terms of those documents are not expressly modified herein.

     10. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which taken together shall constitute one and the
same instrument.

     11. Attorneys’ Fees. In the event of any litigation between the parties hereto
arising out of the terms, conditions, and obligations in this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys’ fees incurred in connection with such litigation.

     12. Construction. This Agreement has been negotiated by the parties. Each party (if
it or he so desired) has consulted with legal counsel about the terms, conditions, and effect of
this Agreement, and the rule of construction that any ambiguities are to be resolved against the
drafting party shall not apply to the interpretation of this Agreement.

     13. Waiver. The waiver by any party of a breach of this provision of this Agreement
by another shall not operate or be construed as a waiver of any subsequent breach of the same
provision or any other provision of this Agreement.

     14. Amendment. This Agreement may only be amended in a writing signed by Cuny and the
respective Chairs of the Boards of Directors of S&W and Stinger Systems.

     15. Successors and Assigns. This Agreement shall be binding upon Cuny and his
respective heirs, trustees, administrators, representatives, executors, successors, and assigns.
This Agreement shall be binding upon S&W and Stinger Systems and their respective subsidiaries,
related, and affiliated companies, and their representatives, successors, and assigns.

	 	 	 	 	 
	 
	 	 	 	 
	 	 	ROY C. CUNY
	 
	 	 	 	/s/ Roy C. Cuny
	 	 	 
	 
	 	 	 	 
	 	 	SMITH & WESSON HOLDING CORPORATION
	 
	 	 	 	 
	

	 	By:	 	 /s/ Barry M. Monheit
	

	 	 	  	 
	 
	 	 	 	 
	

	 	Its:	 	Chairman
	

	 	 	 	 
	 
	 	 	 	 
	 	 	STINGER SYSTEMS, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ T. Yates Exley
	

	 	 	 	 
	 
	 	 	 	 
	

	 	Its:	 	Vice Chairman and CFO
	

	 	 	 	 

4Exhibit 10.1

Exhibit 10.1

Siebel Systems, Inc.

Performance Stock Plan

Purpose:  

The terms of the Performance Stock Plan (the "Plan") have been established to attract, motivate and retain the Company's directors, executive officers and select other Company employees.  Under the Plan, the Company's directors, executive officers and other Company employees may be granted restricted stock or restricted stock units under the Company's 1996 Equity Incentive Plan and 1998 Equity Incentive Plan, each as amended. 

Terms of Performance Stock:  

The number of shares of the Company's common stock covered by the grant will be determined for each participant by the Compensation Committee based on several factors, including recommendations from management, consideration of industry standards, and the role and performance of each participant.

The shares covered by the grant will vest on the fourth anniversary of the grant date; provided however, that the vesting of up to all of the shares covered by the grant may accelerate, as described below.

The vesting of the shares covered by the grant will accelerate if the Company achieves certain objective financial performance goals set by management and approved by the Compensation Committee, as follows:

	
Company Objective
	
End of Year of Grant
	
End of Year Following Grant
	
Fourth Anniversary of Grant Date

	
Revenue-Based
	
Vesting on up to 25% of the shares accelerate based on year of grant revenue objectives*
	
Vesting on up to an additional 25% of the shares accelerate based on year following grant revenue objectives*
	
100% of the remaining shares vest

	
Operating Margin-Based
	
Vesting on up to 25% of the shares accelerate based on year of grant operating margin objectives*
	
Vesting on up to an additional 25% of the shares accelerate based on year following grant operating margin objectives*

 

 

 

 

 

 

 

 

*The vesting on up to 25% of the total shares will be accelerated if the applicable company objective is met or exceeded.  If actual company performance is less than the applicable company objective but above a minimum threshold, then 18.75% of total shares will be accelerated.  If actual company performance is below a minimum threshold, then no shares will be accelerated for such objective.  Half of any shares that are accelerated will vest on January 31 of the year in which the Board of Directors or Compensation Committee determines that an objective has been met.  The remaining half will vest on January 31 of the following year.

The Company's Board of Directors and Compensation Committee reserve the right to modify the goals at any time.

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