Document:

exv10w2

 

EXHIBIT 10.2

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of
this 14th day of December, 2004, by and between Home Products International,
Inc., a Delaware corporation (the “Company”), and Richard Hassert (the
“Executive”). Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in Part Five hereof.

RECITALS

     WHEREAS, the Company desires to employ Executive as the Chief Operating
Officer of the Company; and

     WHEREAS, Executive desires to be employed by the Company at the salary and
benefits provided for herein; and

     WHEREAS, Executive acknowledges and understands that during the course of
his employment, Executive will develop certain strategic business relationships
and become familiar with certain confidential information of the Company which
are exceptionally valuable to the Company and vital to the success of the
Company’s business; and

     WHEREAS, the Company and Executive desire to protect such business
relationships and such confidential information from use to the detriment of
the Company or disclosure to third parties.

     NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto acknowledge
and agree as follows:

TERMS

PART ONE

EMPLOYMENT

     1.01 Employment. The Company hereby agrees to employ Executive, and
Executive hereby accepts such employment, as the Chief Operating Officer of the
Company. Executive’s employment will be on an at-will basis, terminable at any
time by either party, in accordance with and subject to Part Four hereof.

     1.02 Duties. The duties of Executive shall be as determined by the Chief
Executive Officer of the Company (the “CEO”), and Executive shall report to the
CEO and shall be subject to the CEO’s direction and control. Without limiting
the generality of the foregoing, Executive shall manage the operations of the
Company on a day-to-day basis and shall report to and advise the

 

 

CEO and the Board of Directors of the Company (the “Board”) regarding the
management and operation of the Company’s business. Executive agrees to devote
his full-time attention and energies to the diligent performance of his duties
hereunder and will not during his employment with the Company engage in, accept
employment from or provide services to any other person, firm, corporation,
governmental agency or other entity; provided, however, that subject to Part
Three hereof, Executive may (a) devote a reasonable amount of non-business time
to civic activities, (b) maintain not more than two outside board positions
(with companies which do not compete directly or indirectly with the Company),
in each case subject to the prior consent of the Board, and (c) manage his own
investments, provided that such activities do not conflict with or detract from
the Executive’s diligent performance of Executive’s duties hereunder.

PART TWO

COMPENSATION AND BENEFITS

     2.01 Salary. During his employment, Executive shall receive a base salary
at the rate of $258,000 per annum (the “Base Salary”), subject to applicable
deductions, payable in regular installments in accordance with the Company’s
general payroll practices for salaried employees. The Base Salary is subject to
review for increase by the Board annually beginning January, 2006.

     2.02 Bonus. In addition to his Base Salary, Executive may receive during
his employment, as determined annually at the discretion of the CEO and the
Board, an annual incentive cash bonus (“Incentive Bonus”) based upon
Executive’s performance and the profitability of the Company during such period
in accordance with the Company’s executive bonus plan adopted by the Board
annually.

     2.03 Benefits. During Executive’s employment, the Company agrees to
provide to Executive such benefits as are provided to other employees of the
Company from time to time, including but not limited to, any health,
disability, life, profit-sharing or other employee benefit policies, programs
or plans which the Company provides to its employees, all at levels determined
by the Board and commensurate with Executive’s position.

     2.04 Expenses. Executive shall be reimbursed by the Company for all
ordinary and necessary out-of-pocket expenses for travel, lodging, meals,
entertainment expenses, or any other similar reasonable expenses incurred by
Executive in performing services for the Company in accordance with the
policies established by the Board.

     2.05 Vacations. Executive shall be entitled to a vacation of four (4)
weeks during each twelve month period of employment, provided, however, that
Executive’s vacation shall be scheduled at such times as shall least interfere
with the Company’s business and shall otherwise be in accordance with policies
established by the Board. Fifty percent (50%) of any unused vacation from a
calendar year may be carried over and applied to the following calendar year;
provided, that, no more than four (4) weeks of vacation may be accrued and
unused at any one time.

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     2.06 Stock Options. As soon as practical after the date hereof, the Board
shall issue to Executive options for 150,000 shares of the Company’s common
stock, par value $0.01 per share (“Common Stock”) (or, in the event of a
recapitalization of the Company, reclassification of the Company’s capital
stock or other similar event, shares of one or more other classes or series of
capital stock having in the aggregate no less favorable economic rights than
those attributable to Common Stock) at an exercise price of $2.25 per share
(subject to adjustment for recapitalizations, reclassifications, stock splits
and similar events), pursuant to a stock option plan consistent with the terms
described on Exhibit A (the “Stock Option Plan”). Such options shall vest at
the rate of 50,000 shares on December 31, 2005, 50,000 shares on December 31,
2006 and 50,000 shares on December 31, 2007, subject to the provisions of Part
Four hereof. The Board, in its discretion, from time to time, may issue
additional options under the Stock Option Plan to Executive with such vesting
schedules and exercise prices as the Board shall determine.

PART THREE

CONFIDENTIAL INFORMATION AND COMPETITION

     3.01 Definition of Confidential Information. For the purposes of this
Agreement, the term “Confidential Information” shall mean all information and
all documents and other tangible items which record information which is
non-public, confidential or proprietary in nature with respect to the Company
or its customers, clients or investors and shall include, but shall not be
limited to: (a) all information, which at the time or times concerned is
protectible as a trade secret under applicable law; (b) business and growth
plans and strategies; (c) marketing plans and strategies; (d) customer and
supplier information; and (e) proprietary software and business records. The
Company and Executive acknowledge and agree that the Confidential Information
is extremely valuable to the Company and the information referred to in
subparagraphs (b) through (d) inclusive of this Section 3.01 is especially
sensitive and valuable.

     3.02 Non-Disclosure of Confidential Information. Executive will not
either during Executive’s employment, or after termination of Executive’s
employment for any or no reason, in any form or manner, directly or indirectly,
divulge, disclose or communicate to any person, entity, firm, corporation or
any other third party, or utilize for the Employee’s personal benefit of for
the benefit of any person, entity, firm or corporation (other than the
Company), any Confidential Information.

     3.03 Delivery Upon Termination. Upon termination of Executive’s
employment with the Company for any or no reason, Executive will promptly
deliver to the Company all correspondence, manuals, letters, notes, notebooks,
reports, programs, plans, proposals, financial documents, or any other
documents or media concerning the Company and/or which contains Confidential
Information, and Executive hereby acknowledges that all such materials are the
property of the Company.

     3.04 Covenant-Not-To-Compete. Executive will not during his employment,
and for a period of eighteen (18) months following termination of Executive’s
employment for any or no

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reason, in any form or manner, directly or indirectly, on his own behalf or in
combination with others, engage in or become interested in (as an individual,
partner, member, stockholder, director, officer, principal, agent, independent
contractor, employee, trustee, or in any other relation or capacity whatsoever,
except as a holder of securities of a corporation whose securities are publicly
traded and which is subject to the reporting requirements of the Securities
Exchange Act of 1934, and then only to the extent of owning less than five
percent (5%) of the issued and outstanding securities of such corporation) any
business which is competitive with the business of the Company or any the
Affiliate of the Company, as conducted or proposed to be conducted as of the
date of termination of Executive’s employment.

     3.05 Restriction Against Employing the Company Employees. Executive will
not, for a period of (1) one year after termination of Executive’s employment
for any or no reason, directly or indirectly, whether individually, as a
director, stockholder, partner, member, owner, employee or agent of any
business, or in any other capacity, employ or engage, or solicit for employment
or engagement, any person who is employed or otherwise engaged by the Company
or any Affiliate of the Company on, or within 180 days prior to such
termination of Executive; provided, however, that the foregoing prohibition
shall apply to a person who ceases to be employed or engaged by the Company or
any Affiliate of the Company after such termination of Executive only until the
later of (a) 180 days after the termination of such person’s employment or
engagement by the Company or any Affiliate of the Company or (b) the date on
which such person ceases to be entitled to receive compensation, if any, from
the Company or any Affiliate of the Company.

     3.06 Continuing Obligation. The obligations, duties and liabilities of
Executive pursuant to Part Three of this Agreement are continuing, absolute and
unconditional and shall remain in full force and effect as provided therein
despite any termination of Executive’s employment with the Company for any or
no reason.

PART FOUR

TERMINATION

     4.01 Termination Notice and Termination Date. Either the Company or
Executive may terminate Executive’s employment at any time by delivery to the
other party of a written notice (the “Termination Notice”) specifying the
effective date of termination of Executive’s employment (the “Termination
Date”) (except in the case of termination as a result of Executive’s death, in
which case, termination shall be automatic and the Termination Date shall be
the date of death). If Executive terminates his employment for any reason
other than Good Reason, the Termination Date specified by Executive in his
Termination Notice shall be no less than 30 days after the date the Company
receives the Termination Notice, but the Company may elect, in its sole
discretion, upon written notice to Executive, to change the specified
Termination Date to any earlier date which is on or after the date of receipt
of the Termination Notice.

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     4.02 Termination by the Company without Cause or by Executive for Good
Reason. If the Company terminates Executive’s employment other than for Cause,
Executive’s Disability or Executive’s death, or Executive terminates his
employment for Good Reason:

     (a) the Company shall pay to Executive Executive’s Base Salary
accrued and unpaid up to the Termination Date;

     (b) the Company shall pay to Executive Executive’s Incentive Bonus
to the extent earned and unpaid for the fiscal year ended prior to the
Termination Date;

     (c) upon execution and delivery by Executive of the form of Release
attached hereto as Exhibit B, and the expiration of the seven-day
revocation period provided in said Release, without revocation of said
Release by Executive:

          (i) the Company shall pay to Executive a severance payment
equal to one hundred fifty percent (150%) of Executive’s annual
Base Salary as of the Termination Date, payable over eighteen (18)
months beginning on the Termination Date in regular installments in
accordance with the Company’s general payroll practices for
salaried employees;

          (ii) the Company shall pay to Executive an additional
severance payment equal to Executive’s Incentive Bonus, to the
extent earned, for the fiscal year during which the Termination
Date occurs, pro-rated for that fiscal year based on the portion
of Executive’s active employment for that fiscal year, payable
when the Company generally pays Incentive Bonuses for other
salaried employees; and

          (iii) if Executive elects COBRA continuation coverage, the
Company shall maintain for Executive and his eligible family
members, until the earlier of (A) the eighteen (18) month
anniversary of the Termination Date or (B) such time as Executive
shall obtain employment or other engagement offering comparable or
better medical insurance coverage, medical insurance coverage that
is the same as or comparable to the coverage to which he was
entitled immediately preceding the Termination Date, at a cost to
Executive no greater than the normal active employee premiums at
such time;

     (d) notwithstanding anything to the contrary in the Stock Option
Plan, all unvested options granted to Executive under the Stock Option
Plan will automatically vest and become immediately exercisable for the
total number of shares purchasable thereunder. Notwithstanding anything
to the contrary in the Stock Option Plan, such options will expire on the
earlier of (A) the expiration date of such options under the Stock Option
Plan and (B) six (6) months from the Termination Date;

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     (e) if the Put/Call Option is exercised, the Company shall pay, or
cause to be paid, to Executive and his Permitted Transferees the Put/Call
Payment in accordance with Section 4.06;

     (f) the Company shall reimburse Executive for his reimbursable
out-of-pocket business expenses in accordance with Section 2.04 to the
extent incurred prior to the Termination Date and not previously
reimbursed; and

     (g) except as set forth in this Section 4.02, Executive shall not be
entitled to receive any other severance, benefits or compensation of any
kind whatsoever.

     4.03 Termination by the Company for Cause or by Executive without Good
Reason. If the Company terminates Executive’s employment for Cause or
Executive terminates his employment other than for Good Reason:

     (a) the Company shall pay to Executive Executive’s Base Salary
accrued and unpaid up to the Termination Date;

     (b) the Company shall pay to Executive Executive’s Incentive Bonus
to the extent earned and unpaid for the fiscal year ended prior to the
Termination Date;

     (c) notwithstanding anything to the contrary in the Stock Option
Plan, all unvested options granted to Executive under the Stock Option
Plan will automatically be forfeited without any payment or other
consideration to Executive, and all vested options granted to Executive
under the Stock Option Plan will expire on the earlier of (i) the
expiration date of such options under the Stock Option Plan and (ii) the
date ninety (90) days following the Termination Date;

     (d) if the Put/Call Option is permitted to be, and is, exercised,
the Company shall pay, or cause to be paid, to Executive and his
Permitted Transferees the Put/Call Payment in accordance with Section
4.06;

     (e) the Company shall reimburse Executive for his reimbursable
out-of-pocket business expenses in accordance with Section 2.04 to the
extent incurred prior to the Termination Date and not previously
reimbursed;

     (f) except as set forth in this Section 4.03, Executive shall not be
entitled to receive any other severance, benefits or compensation of any
kind whatsoever.

     4.04 Termination upon Death. Upon Executive’s death during his
employment:

     (a) the Company shall pay to Executive’s representatives Executive’s
Base Salary accrued and unpaid up to the Termination Date;

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     (b) the Company shall pay to Executive’s representatives Executive’s
Incentive Bonus to the extent earned and unpaid for the fiscal year ended
prior to the Termination Date;

     (c) upon execution and delivery by Executive’s representatives of
the form of Release attached hereto as Exhibit B, and the expiration of
the seven-day revocation period provided in said Release, without
revocation of said Release by Executive’s representatives:

          (i) the Company shall pay to Executive’s representatives a
severance payment equal to fifty percent (50%) of Executive’s
annual Base Salary as of Executive’s death, payable over six (6)
months beginning on the Termination Date in regular installments in
accordance with the Company’s general payroll practices for
salaried employees; and

          (ii) the Company shall pay to Executive an additional
severance payment equal to Executive’s Incentive Bonus, to the
extent earned, for the fiscal year during which the Termination
Date occurs, pro-rated for that fiscal year based on the portion of
Executive’s active employment for that fiscal year, payable when
the Company generally pays Incentive Bonuses for other salaried
employees;

     (d) notwithstanding anything to the contrary in the Stock Option
Plan, all unvested options granted to Executive under the Stock Option
Plan will automatically vest and become immediately exercisable for the
total number of shares purchasable thereunder. Notwithstanding anything
to the contrary in the Stock Option Plan, such options will expire on the
earlier of (i) the expiration date of such options under the Stock Option
Plan and (ii) six (6) months from the Termination Date;

     (e) if the Put/Call Option is exercised, the Company shall pay, or
cause to be paid, to Executive’s representatives and Permitted
Transferees the Put/Call Payment in accordance with Section 4.06;

     (f) the Company shall reimburse Executive’s representatives for
Executive’s reimbursable out-of-pocket business expenses in accordance
with Section 2.04 to the extent incurred prior to the Termination Date
and not previously reimbursed; and

     (g) except as set forth in this Section 4.04 neither Executive nor
his representatives shall be entitled to receive any other severance,
benefits or compensation of any kind whatsoever.

     4.05 Termination upon Disability. If the Company terminates Executive’s
employment as a result of his Disability:

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     (a) the Company shall pay to Executive his Base Salary accrued and
unpaid up to the Termination Date;

     (b) the Company shall pay to Executive Executive’s Incentive Bonus
to the extent earned and unpaid for the fiscal year ended prior to the
Termination Date;

     (c) upon execution and delivery by Executive of the form of Release
attached hereto as Exhibit B, and the expiration of the seven-day
revocation period provided in said Release, without revocation of said
Release by Executive:

          (i) Executive shall be entitled to continue to receive his
Base Salary, as a severance payment, in accordance with the
Company’s general payroll practices for salaried employees, until
the earlier of (A) the commencement of payments under Executive’s
long-term disability insurance policy or (B) the six (6) month
anniversary of the Termination Date; and

          (ii) the Company shall pay to Executive an additional
severance payment equal to Executive’s Incentive Bonus, to the
extent earned, for the fiscal year during which the Termination
Date occurs, pro-rated for that fiscal year based on the portion of
Executive’s active employment for that fiscal year, payable when
the Company generally pays Incentive Bonuses for other salaried
employees;

     (d) notwithstanding anything to the contrary in the Stock Option
Plan, all unvested options granted to Executive under the Stock Option
Plan will automatically vest and become immediately exercisable for the
total number of shares purchasable thereunder. Notwithstanding anything
to the contrary in the Stock Option Plan, such options will expire on the
earlier of (i) the expiration date of such options under the Stock Option
Plan and (ii) six (6) months from the Termination Date;

     (e) if the Put/Call Option is exercised, the Company shall pay, or
cause to be paid, to Executive and his Permitted Transferees the Put/Call
Payment in accordance with Section 4.06;

     (f) the Company shall reimburse Executive for his reimbursable
out-of-pocket business expenses in accordance with Section 2.04 to the
extent incurred prior to the Termination Date and not previously
reimbursed; and

     (g) except as set forth in this Section 4.05, Executive shall not be
entitled to receive any other severance, benefits or compensation of any
kind whatsoever.

     4.06 Put/Call Option.

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     (a) Subject to Section 4.06(b), in the event of the termination of
Executive’s employment for any reason other than for Cause, Executive
shall have the option to sell, or cause to be sold, to the Company all shares
of Common Stock (and other capital stock of the Company, if any)
held by Executive and his Permitted Transferees, if any, and cancel all
unexercised options issued under the Stock Option Plan held by Executive.
In the event of the termination of Executive’s employment for any or no
reason, the Company shall have the option to purchase from Executive and
his Permitted Transferees, if any, all shares of Common Stock (and other
capital stock of the Company, if any) held by any of them and cancel all
unexercised options issued under the Stock Option Plan held by Executive.
The options to sell and purchase referred to in this Section 4.06(a)
are hereinafter collectively referred to as the “Put/Call Option.”

     (b) Provided Executive has not terminated his employment without
Good Reason and the Company has not terminated Executive’s employment for
Cause, Executive may exercise the Put/Call Option, at his discretion, at
any time after the Termination Date and until the date which is 180
calendar days after the Termination Date, by delivery of written notice
to the Company within such 180-day period. In the event Executive has
terminated his employment without Good Reason, Executive may exercise the
Put/Call Option, at his discretion, but only during the first 30 calendar
days after the first anniversary of the Termination Date, by delivery of
written notice to the Company within such 30-day period. Executive may
not exercise the Put/Call Option at any time in the event his employment
is terminated by the Company for Cause. The Company may (but shall not
be obligated to) exercise the Put/Call Option, at its discretion, at any
time after the Termination Date (irrespective of the reason for
termination) and until the date which is 180 calendar days after the
Termination Date, by delivery of written notice to the Executive within
such 180-day period. No Permitted Transferee shall be entitled to
exercise the Put/Call Option, but any exercise of the Put/Call Option by
Executive or the Company shall be binding on each of Executive’s
Permitted Transferees, if any. Executive agrees that his and his
Permitted Transferees’ stock certificates shall bear an appropriate
legend referencing the Put/Call Option.

     (c) Promptly after exercise of the Put/Call Option by Executive or
the Company, Executive and his Permitted Transferees, if any, shall
execute and deliver to the Company the form of Release attached hereto as
Exhibit C. Within thirty (30) days after exercise of the Put/Call
Option, the Company shall pay, or cause to be paid, to Executive and/or
his Permitted Transferees, if any, as applicable, an aggregate amount in
cash equal to the Put/Call Payment (payable among Executive and his
Permitted Transferees, if any, pro rata according to the number of shares
and options held by them), provided (i) Executive and his Permitted
Transferees, if any, have executed and delivered to the Company the form
of Release attached hereto as Exhibit C, and (ii) Executive and his
Permitted Transferees, if any, have surrendered to the Company all stock
certificates representing Common Stock and/or other capital stock of the
Company to be sold, together with executed stock powers therefor, and all
stock option agreements for cancellation by the Company, and all other
transfer or cancellation documents reasonably requested by the Company.
Upon payment

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of the Put/Call Payment, none of Executive, his Permitted
Transferees, if any, or his or their respective representatives, heirs,
executors, administrators, successors or assigns, shall have any
ownership or other interest of any kind in, or rights of any kind in
respect of, any Common Stock, other capital stock of the Company, or
options under the Stock Option Plan, or otherwise in respect of, or any
claims or demands of any kind (whether known or unknown, vested or
contingent, suspected or unsuspected, concealed or hidden) against, the
Company, except for any payments and benefits, if any, which are owed to
Executive under this Agreement in connection with the termination of his
employment with the Company.

     4.07 Sole Remedy. The amounts payable to Executive or his representatives
or Permitted Transferees, if any, under the applicable provisions of this Part
Four in connection with the termination of Executive’s employment, voluntarily
or involuntarily, for any or no reason, shall be the only remedy, legal or
equitable, available to Executive and his representatives and Permitted
Transferees in connection with such termination and/or the exercise of the
Put/Call Option in connection therewith, and such amounts shall constitute
liquidated damages, excluding any remedies which by law cannot be waived.

PART FIVE

CERTAIN DEFINITIONS

     5.01 Certain Definitions. As used in this Agreement, the following terms
have the following meanings unless the context otherwise requires:

“Affiliate” means with respect to any Person, any Person that directly or
indirectly controls, is controlled by, or is under common control with
such Person. For purposes of this definition, “control” shall mean the
power to direct, or cause the direction of, the management of policies of
a Person, whether through the ownership of voting securities, by contract
or otherwise.

“Cause” means:

	(i)	 	fraud, embezzlement or conviction of a felony;
	 
	(ii)	 	misappropriation of any money, proprietary information or
other assets or properties of the Company or any Affiliate of the
Company other than (A) an isolated, insubstantial and unintentional
misappropriation which is promptly remedied by Executive after he
learns of the same or (B) any good faith dispute regarding
reimbursement of expenses or other similar good faith dispute;
	 
	(iii)	 	willful or material breach by Executive of the terms of this
Agreement; or

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	(iv)	 	any other verifiable misconduct of Executive materially and
adversely affecting the Company.

“Change in Control” means:

	(i)	 	a merger or acquisition involving the Company in which 50% or
more of the Company’s voting stock outstanding after the merger or
acquisition is held by holders different from those who held the
Company’s voting stock immediately prior to such merger or
acquisition; or
	 
	(ii)	 	the sale, transfer or other disposition of all or
substantially all of the assets of the Company.

“Disability” means, in the reasonable opinion of the Board, Executive has
become physically or mentally disabled, whether totally or partially, so
that Executive is unable substantially to perform his employment duties
for a period of ninety (90) consecutive days, or for shorter periods
aggregating one hundred and eighty (180) days during any three hundred and
sixty (360) day period.

“EBITDA” means the Company’s aggregate consolidated net income, exclusive of
non-recurring income items, plus tax expense, net interest expense,
depreciation, amortization expense and non-recurring expenses, for the
four full fiscal quarters immediately preceding the date of exercise of
the Put/Call Option, determined by the Board in good faith in accordance
with accounting practices and policies consistently applied by the Company
prior to the exercise of the Put/Call Option.

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“Enterprise Value” means the product of applicable Enterprise Value Multiple
multiplied by the applicable EBITDA, less the Company’s consolidated
indebtedness for borrowed money and obligations under capital leases;
provided, however, that, in the event of the occurrence of a material
change in the business, financial condition or prospects of the Company
which is not fully reflected in the amount of EBITDA otherwise to be used
in calculating Enterprise Value, Executive and the Board will negotiate an
appropriate adjustment in good faith to reflect the expected impact of
such material adverse change; provided, further, however, that, in the
event Executive and the Board fail to reach agreement on whether an
adjustment is required or the amount thereof within sixty (60) days after
either party gives written notice to the other party that it believes an
adjustment is required, the parties shall initiate a voluntary, nonbinding
mediation conducted by a mutually agreed upon mediator in Chicago,
Illinois, with each of the parties bearing his or its own costs and
expenses (including attorneys’ and experts’ fees and expenses) and his or
its proportionate share of any other costs, fees or expenses associated
with this mediation and endeavoring in good faith to resolve their
differences. If, within thirty (30) days after the first day of
mediation, the parties shall not have reached agreement as to the dispute
in question, then each party shall be entitled to file suit to resolve the
dispute, subject to Section 6.08 and Section 6.09.

“Enterprise Value Multiple” means:

	(i)	 	Six (6), in the event the Company terminates Executive’s
employment for any reason other than Cause, including his death or
Disability, or Executive terminates his employment for Good Reason;
and
	 
	(ii)	 	Five (5), in the event the Company terminates Executive’s
employment for Cause, or Executive terminates his employment without
Good Reason.

“Good Reason” means Executive’s termination of his employment with the Company
within one year following a Change of Control if:

	(i)	 	Executive is assigned any duties inconsistent in any respect
with Executive’s position (including status, offices, titles and
reporting requirements), authority, duties, or responsibilities, or
there is a material diminution of such position, authority, duties
or responsibilities, but excluding for this purpose an isolated,
insubstantial or inadvertent action not taken in bad faith and which
is remedied promptly after receipt of notice thereof given by
Executive; or
	 
	(ii)	 	Executive is required, without his consent, to be based at
any office or location outside of a 75 mile radius of Cook County,
Illinois; or
	 
	(iii)	 	there is a material diminution in Executive’s Base Salary or
percentage of Base Salary potentially awardable as Incentive Bonus;
or

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	(iv)	 	the acquirer is for any reason not bound by any material term
of this Agreement to the same extent as the Company immediately
prior to such Change in Control.

“Permitted Transferee” means any initial or subsequent transferee of Common
Stock or other capital of the Company originally held by Executive, except
as otherwise determined by the Board in its sole discretion; it being
understood that Executive is not entitled to make any such transfer except
as otherwise expressly permitted by any other written agreement with, or
written permission from, the Company, which permission shall not be
unreasonably withheld or delayed for transfers of issued and outstanding
Common Stock or other capital stock of the Company from Executive to
either (i) family trusts or partnerships for the benefit of Executive and
his family members, provided Executive retains voting and dispositive
power over the transferred shares and the transferee executes an agreement
with the Company restricting further transfer, or (ii) other senior
management shareholders of the Company who at the time of transfer are
employed and in good standing with the Company.

“Person” means any individual, corporation, association, partnership, limited
liability the Company, estate, trust and any other entity or organization,
governmental or otherwise.

“Put/Call Payment” means the sum of (i) the product of the Put/Call Price
multiplied by the number of share of Common Stock held by Executive and
his Permitted Transferees as of the date of exercise of the Put/Call
Option, plus (ii) for each vested option issued under the Stock Option
Plan, the excess, if any, of the Put/Call Price over the exercise price of
the option, multiplied by the number of shares covered by the vested
option (options, to the extent not vested, shall be excluded); provided,
however, that, notwithstanding the foregoing, in the event the Company
terminates Executive’s employment for Cause, the Put/Call Payment shall
not exceed the aggregate cash amount (including any option exercise price)
paid by Executive for Common Stock held by Executive and/or his Permitted
Transferees, as applicable.

“Put/Call Price” means the applicable Enterprise Value divided by the sum of
the number of fully diluted shares of Common Stock outstanding or issuable
upon exercise of outstanding stock options, warrants, convertible debt or
equity or other rights to acquire Common Stock, as of the date of exercise
of the Put/Call Option. In the event of the recapitalization of the
Company, reclassification of the Common stock into one or more classes or
series of capital stock, stock split or similar event, the Board shall
adjust the Put/Call Price in good faith, so that the aggregate Put/Call
Payment is no smaller or larger as a result of such event than it would
have been had such event not occurred.

PART SIX

MISCELLANEOUS

-13-

 

     6.01 Assignment. Executive and the Company acknowledge and agree that the
covenants, terms and provisions contained in this Agreement constitute a
personal employment contract and the rights of the parties thereunder cannot be
transferred, sold, assigned, pledged or hypothecated, excepting that the rights
and obligations of the Company under this Agreement may be assigned or
transferred by operation of law pursuant to a merger, consolidation, share
exchange, sale of substantially all of the Company’s assets, or other
reorganization, or through liquidation, dissolution or otherwise, whether or
not the Company is the continuing entity, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the rights and duties of the
Company, if any, as contained in this Agreement, either contractually or as a
matter of law.

     6.02 Capacity. Executive hereby represents and warrants that, in entering
into this Agreement, he is not in violation of any contract or agreement,
whether written or oral, with any other Person to which he is a party or by
which he is bound and will not violate or interfere with the rights of any
other Person. In the event that such a violation or interference does occur,
or is allleged to occur, notwithstanding the representation and warranty made
hereunder, Executive shall indemnify the Company from and against any and all
manner of expenses and liabilities incurred by the Company or any Affiliate of
the Company of the Company in connection with such violation or interference or
alleged violation or interference.

     6.03 Severability. If any phrase, clause or provision of this Agreement
is declared invalid or unenforceable by a court of competent jurisdiction, such
phrase, clause or provision shall be deemed severed from this Agreement, but
will not affect any other provisions of this Agreement, which shall otherwise
remain in full force and effect. If any restriction or limitation in this
Agreement is deemed to be unreasonable, onerous and unduly restrictive by a
court of competent jurisdiction, it shall not be stricken in its entirety and
held totally void and unenforceable, but shall remain effective to the maximum
extent permissible within reasonable bounds.

     6.04 Notices. Any notice, request or other communication required to be
given pursuant to the provisions hereof shall be in writing and shall be deemed
to have been given when delivered in person, one (1) day after being sent by
overnight courier, or five (5) days after being deposited in the United States
mail, certified or registered, postage pre-paid, return receipt requested and
addressed to the party at its or his last known addresses. The address of any
party may be changed by notice in writing to the other parties duly served in
accordance herewith.

     6.05 Waiver. The waiver by the Company or Executive of any breach of any
term or condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition hereof.

     6.06 Executive Acknowledgment/Injunctive Relief. Executive acknowledges
and agrees that Executive’s covenants set forth in this Agreement are
reasonable and necessary for the protection of the Company’s business
interests, that such covenants will not result in undue economic hardship to
Executive, that irreparable injury will result to the Company if Executive
breaches any of the terms of Executive’s covenants in this Agreement, and that
in the event of

-14-

 

Executive’s actual or threatened breach of any of his covenants, the
Company will have no adequate remedy at law. Executive accordingly agrees that
in the event of any actual or threatened breach by him of any of his covenants
in this Agreement, the Company shall be entitled to immediate injunctive and
other equitable relief, without bond and without the necessity of showing, any
actual monetary damages, and Executive shall pay the Company any and all of the
Company’s, costs and expenses in enforcing Executive’s covenants in this
Agreement (including court costs and reasonable attorney’s, accountant’s,
financial advisor’s and expert witness’s fees). Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for any breach or threatened breach by Executive of any of his covenants
contained in this Agreement, including the recovery of any damages which it is
able to prove.

     6.07 Governing Law. This Agreement and the enforcement thereof shall be
governed and controlled in all respects by the laws of the State of Illinois
(applicable to agreements to be performed wholly within such state), without
regard to conflicts of law principles.

     6.08 Jurisdiction and Service of Process. EXECUTIVE AND THE COMPANY HEREBY
CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN COOK
COUNTY, ILLINOIS, AND IRREVOCABLY AGREE THAT, SUBJECT TO THE OTHER PROVISIONS
OF THIS AGREEMENT, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT WHICH MAY BE LITIGATED SHALL BE LITIGATED IN SUCH COURTS. EACH
OF EXECUTIVE AND THE COMPANY ACCEPTS FOR SUCH PARTY AND IN CONNECTION WITH SUCH
PARTY’S PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT
SHALL BE MAILED BY REGISTERED MAIL TO THE APPLICABLE PARTY, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY EACH SUCH PARTY TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW.

     6.09 TRIAL. EACH OF EXECUTIVE AND THE COMPANY HEREBY WAIVES SUCH PARTY’S
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO
THE SUBJECT MATTER HEREOF. EACH OF EXECUTIVE AND THE COMPANY ALSO WAIVES ANY
BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF ANY PARTY TO THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT. EACH OF EXECUTIVE AND
THE COMPANY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO AN EMPLOYMENT AND BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON
THE WAIVER IN ENTERING

-15-

 

INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH OF EXECUTIVE AND THE COMPANY FURTHER WARRANTS
AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH SUCH PARTY’S LEGAL
COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY’S JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first hereinabove written.

	 	 	 	 	 
	 	 	HOME PRODUCTS INTERNATIONAL, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ Joseph Gantz
	

	 	 	 	

	

	 	 	 	Joseph Gantz, Chairman of the Board
	 
	 	 	 	 
	 	 	EXECUTIVE:
	 
	 	 	/s/ Richard Hassert
	 	 	

	 	 	Richard Hassert

-16-

 

EXHIBIT A

STOCK OPTION PLAN TERM SHEET

	•	 	Aggregate of 10% of Common Stock (or approximately 787,000 shares)
available for a combination of options to Hassert, Ramsdale and a third
senior executive and SARs to other employees.

	•	 	All options and SARs expire on fifth anniversary of issuance.

	•	 	All options and SARs vest 1/3 on each of the first three anniversaries of issuance.

	•	 	Accelerated vesting on change of control.

	•	 	Initial grant of 150,000 options with an exercise price of $2.25
per share to each of Hassert, Ramsdale and the third senior executive.

	•	 	The Board will determine subsequent grants and the exercise prices
therefor.

 

 

EXHIBIT B

SEVERANCE RELEASE

     1. In consideration for the payments and, if applicable, benefits to be
provided to me pursuant to Section 4.0   of my Employment Agreement with Home
Products International, Inc., a Delaware corporation (the “Company”), dated
                    ,                     , I, Richard Hassert, on behalf of myself and my heirs,
executors, administrators, assigns, and attorneys (hereinafter collectively
referred to as the “Releasing Parties”) do hereby fully and forever waive,
release, relieve and discharge the Company, its direct and indirect parent
corporation(s), subsidiaries and affiliates and its and their respective
directors, officers, employees, members, partners, shareholders, attorneys and
agents, past, present and future, and each of their respective successors and
assigns (hereinafter collectively referred to as the “Released Parties”) of and
from any and all actions, causes of action, claims, judgments, orders,
attorneys’ fees, damages, controversies, lawsuits, demands or liabilities of
any kind of nature, known or unknown, vested or contingent, suspected or
unsuspected, concealed or hidden, and all other claims and demands whatsoever
in law or in equity which any Releasing Parties have had or now have against
any Released Party from the beginning of the world to the date of this
Agreement, as a result of, arising from or in any way pertaining to, my
employment, or the termination of my employment, with the Company or any direct
and indirect parent corporation(s), subsidiaries and affiliates of the Company,
including, for purposes of illustration and not limitation:

	(a)	 	claims, actions, causes of action, demands, or liabilities
arising under Title VII of the Civil Rights Act of 1964, as amended,
the Age Discrimination in Employment Act, as amended, the Employee
Retirement Income Security Act, as amended, the Rehabilitation Act
of 1973, as amended, the Americans with Disabilities Act, and/or any
other federal, state, municipal or local employment discrimination
statues (including, but not limited to, claims based on age, sex,
attainment of benefit plan rights, race, religion, marital status,
national origin, handicap, retaliation, and veteran status); and/or
	 
	(b)	 	claims, actions, causes of action, demands, or liabilities
under any other federal, state, municipal or local statute, common
law, order, ordinance or regulation; and/or
	 
	(c)	 	any other claim whatsoever, including, but not limited to,
claims based upon breach of contract (express or implied), tort,
public policy, wrongful termination, claims for compensatory or
punitive damages, defamation, intentional infliction of emotional
distress, personal injury claims, negligence and/or any other common
law, statutory, or other claim,

but excluding any claims which by law cannot be waived.

     2. I UNDERSTAND THAT THIS RELEASE AND SETTLEMENT AGREEMENT INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST THE

 

 

COMPANY AND THE OTHER RELEASED PARTIES AS A RESULT OF, ARISING FROM OR IN ANY
WAY PERTAINING TO, MY EMPLOYMENT, OR THE TERMINATION OF MY EMPLOYMENT, WITH THE
COMPANY OR ANY DIRECT AND INDIRECT PARENT CORPORATION(S), SUBSIDIARIES AND
AFFILIATES OF THE COMPANY TO THE DATE OF THIS AGREEMENT.

     3. I also agree that I have been paid for all hours worked, all pay earned
and owed, not suffered any on-the-job injury for which I have not already filed
a claim, and have received all of the sick pay and vacation pay that I am owed.

     4. I covenant and agree never to institute any suit, charge, complaint,
proceeding or action at law, in equity, or otherwise in any court of the United
States or any state thereof or in any administrative agency of either the
United States or any state, county or municipality thereof or before any other
tribunal, public or private, against the Company or any other Released Party,
or in any way voluntarily aid in the institution or prosecution of any suit,
action, or claim of any kind, or any other kind of relief, in any way against
the Company or any other Released Party as a result of, arising from or in any
way pertaining to, my employment, or the termination of my employment, with the
Company or any direct and indirect parent corporation(s), subsidiaries and
affiliates of the Company.

     5. I understand that neither I nor the Company shall reveal the contents
of this Agreement and both expressly agree that if asked about my separation
from the Company, both I and the Company will say nothing more than that I have
left the Company to pursue other interests. In addition, I shall not in any
manner make any defamatory, derogatory, disparaging or denigrating statements
about the Company or its products or services. I acknowledge that the absolute
confidentiality of this Agreement and compliance with the non-disparagement
terms of this Agreement are of utmost importance to the Company and without the
unequivocal commitment by myself regarding these provisions, the Company would
not have entered into this Agreement or my Employment Agreement. As such, if I
breach this Paragraph 5, I shall, in addition to any other relief, return all
moneys paid to me by the Company.

     6. I have been given at least twenty-one (21) days to consider this
Agreement, and understand that I may revoke this Agreement within seven (7)
days after its signing and that any revocation must be made in writing and
submitted within such seven (7) day period to the Company. I further
understand that if I revoke this Agreement, I will not be entitled to the
payments and benefits otherwise to be provided to me pursuant to
Section 4.0 __
of my Employment Agreement.

     7. I acknowledge and agree that I have carefully read and fully understand
all of the provisions of this Agreement and that I voluntarily and knowingly
enter into this Agreement.

     8. I understand that neither this Agreement nor any of the events which
have led to its execution may be used as evidence in any proceedings of any
kind between the parties (except for a

-2-

 

claim of breach of this Agreement) and that this Agreement does not constitute
an admission by the Company of any wrongdoing or liability.

     9. This Agreement constitutes the complete Agreement between myself and
the Company. No other promises or agreement, either express or implied, shall
be binding upon myself or the Company unless signed in writing by myself and
the Company. Each of the Released Parties is an intended third party
beneficiary of this Release and may enforce this Release against any Releasing
Party.

Signed:

EXECUTIVE:

	 	 	 
	

	 	

	Richard Hassert

	 	               date

HOME PRODUCTS INTERNATIONAL, INC.

	 	 	 	 	 
	By
	 	 	 	 
	

	 	

	 	

	

	 	 	 	               date

-3-

 

 

EXHIBIT C

PUT/CALL PAYMENT RELEASE

     KNOW ALL MEN BY THESE PRESENTS, that the undersigned,                    
(the “Releasing Party”), for and in consideration of the sum of $[applicable
Put/Call Payment Amount], which has been paid, or caused to be paid, to the
Releasing Party by Home Products International, Inc., a Delaware corporation
(the “Company”), the Releasing Party has remised, released and forever
discharged, and by these presents does, for both himself and his respective
representatives, successors and assigns, remise, release, and forever discharge
the Company, its direct and indirect parent corporation(s), subsidiaries and
affiliates and its and their respective directors, officers, employees,
members, partners, shareholders, attorneys and agents, past, present and
future), and each of their respective successors and assigns (collectively the
“Released Parties”), of and from any and all actions, causes of action, claims,
judgments, orders, attorneys’ fees, damages, controversies, lawsuits, demands
or liabilities of any kind of nature, known or unknown, vested or contingent,
suspected or unsuspected, concealed or hidden, and all other claims and demands
whatsoever in law or in equity, that the Releasing Party may have as a result
of, arising from or in any way pertaining to, the Releasing Party’s direct or
indirect ownership of Common Stock or other capital stock of the Company,
options to acquire Common Stock or other capital stock of the Company, or
membership or other equity interests in direct and indirect parent corporation
of the Company, which the Releasing Party may now have against the Released
Parties, or any of them, or which he ever had, or which he, his respective
representatives, successors or assigns hereafter can, shall or may have, for,
upon, or by reason of any matter, cause or thing whatsoever which shall have
arisen at any time prior to the date of these presents.

     The Releasing Party covenants and agrees never to institute any suit,
charge, complaint, proceeding or action at law, in equity, or otherwise in any
court of the United States or any state thereof or in any administrative agency
of either the United States or any state, county or municipality thereof or
before any other tribunal, public or private, against the Company or any other
Released Party, or in any way voluntarily aid in the institution or prosecution
of any suit, action, or claim of any kind, or any other kind of relief, in any
way against the Company or any other Released Party as a result of, arising
from or in any way pertaining to, the Releasing Party’s direct or indirect
ownership of Common Stock or other capital stock of the Company, options to
acquire Common Stock or other capital stock of the Company, or membership or
other equity interests in direct and indirect parent corporation of the
Company.

     THE RELEASING PARTY FURTHER STATES THAT HE HAS READ AND UNDERSTANDS THIS
RELEASE AND THAT HE INTENDS TO BE LEGALLY BOUND BY IT. EACH OF THE RELEASED
PARTIES IS AN INTENDED THIRD PARTY BENEFICIARY OF THIS RELEASE AND MAY ENFORCE
THIS RELEASE AGAINST ANY RELEASING PARTY.

     IN WITNESS WHEREOF, this Release is made as of                                        ,                    ,                    .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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}]]