Document:

SKUL-EX10.32_12.31.13-10K

Exhibit 10.32

Separation Agreement 

This Separation Agreement (“Agreement”) is entered into by Skullcandy (the “Company”) and Kyle Wescoat (“Employee.”) 

1.    Termination of Employment. Employee acknowledges Employee’s employment with the Company was terminated effective October 4, 2013 (“Separation Date”), after which date Employee performed no further duties, functions or services for the Company. Employee’s termination shall be considered a voluntary resignation following Employee’s decision to return to California.

2.    Payment of Moneys Owed. Employee acknowledges the Company has paid all compensation owed to Employee as a result of Employee’s employment with the Company, including but not limited to Employee’s salary/wages through the Separation Date, all accrued but unused vacation/flex time through that date, all commissions and/or bonuses owed to Employee, and all business expenses, if any, incurred by Employee as a result of Employee’s employment with the Company. Employee further agrees that he has no present claim for wages or benefits, and that he is not and would not be entitled to any future wages or benefits pursuant to any claims, other than the severance pay and benefits under this Agreement.

3.    Additional Payment. Within fourteen (14) days after the execution of this Agreement, the Company shall pay Employee a lump sum in the gross amount equal to twelve (12) months of Employee’s current base salary minus the pro-rated salary paid to Employee from June 18, 2013, through the Separation Date $197,185.74, less appropriate income tax withholding and payroll deductions. The payment of this additional amount, nor the provision of an email address following the Separation Date, does not constitute continued employment or contractor status with the Company.

4.    Medical Insurance Continuation. If Employee elects to continue coverage for himself and his family under the Company’s group medical plan pursuant to COBRA, the Company shall pay the premiums to continue such coverage from the Separation Date through June 2014, including continued coverage for Employee’s family during that period in the event Employee dies before June 30, 2014. Thereafter, Employee shall be solely responsible for any COBRA payments or continued coverage under the Company’s medical plan (under the terms of COBRA).

5.    Acknowledgment of Full Payment. Employee acknowledges the payments and arrangements described in paragraphs 2 through 4 above shall constitute full and complete satisfaction of any and all amounts due and owing to Employee as a result of Employee’s employment with the Company and/or the termination of employment, and that in the absence of this Agreement, Employee would not be entitled to, among other things, the payments specified in paragraph 3 above and the continued medical insurance coverage specified in the first sentence of paragraph 4 above.

6.    Options. In accordance with IRS guidelines, Employee has 90-days from the Separation Date to exercise his vested stock options (if any), after which time any unexercised options will be cancelled and forfeited. Employee acknowledges that he is not entitled to, and the Company will not provide, any acceleration of unvested stock options, including any unvested Performance Share Units pursuant to the Long Term Incentive Plan.

7.    Unemployment Benefits. The Company will not contest Employee’s application for unemployment insurance benefits, if any, as a result of this Agreement. If requested by the appropriate agency, the Company will respond that the Employee’s employment ended due to a reorganization. The Company does not admit or deny, by so doing, that Employee had a right to receive unemployment insurance benefits.

8.    Non-Disclosure of Confidential Information. Employee acknowledges and agrees that Employee has not revealed and will not reveal in the future, nor use for Employee’s own purposes, any trade secret, proprietary information or any confidential information about the Company, its products, its service, its customers, or its methods of doing business. Employee further acknowledges his obligations under the Company’s Employment, Confidential Information, Invention Assignment, Noncompetition and Arbitration Agreements, entered into as a condition of his employment, including, without limitation, his duties related to confidential Company information, non-solicitation of Company employees, and inventions made during his tenure at the Company.

9.    Return of Company Property. No later than the Separation Date, Employee shall return all property issued by the Company, including without limitation, all keys, access cards, credit cards, calling cards, computer hardware and software, cellular phones, pdas, blackberries and other mobile communications devices, and any and all confidential or proprietary 

Documents. For purposes of this Agreement, the term “Documents” means any written records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, forms, or any other written material, whether in physical or digital form.

10.    Release and Discharge of Claims. Except as to such rights or claims as may be created by this Agreement, Employee hereby irrevocably and unconditionally remises, releases, and forever discharges the Company and any predecessor, successor, parent, subsidiary or affiliated corporation, and all present or former directors, officers, agents, employees, insurers, representatives, and attorneys, (and directors, officers, agents, employees, insurers, representatives, and attorneys of any parent, subsidiary, or affiliated corporations), and all persons acting by, through, under or in concert with any of them (collectively the “Releasees”), or any of them, from any and all actions, causes of action, suits, debts, charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, and expenses (including attorney’s fees and costs actually incurred), of any nature whatsoever, in law or equity, known or unknown, suspected or unsuspected, fixed or contingent, which any of them ever had or now has against the Releasees, from the beginning of time to the date of this Agreement, including but without limitation on the foregoing general terms, any claims arising from or relating to Employee’s employment relationship with the Company or the termination thereof, including any claims arising from any alleged breach of contract, covenant of good faith and fair dealing, wrongful termination, tort or any violation of any federal, state or local statutes, ordinances or common law, including but not limited to:  (1) the Civil Rights Act of 1964, as amended; (2) 42 U.S.C. § 1981; (3) Section 503 of the Rehabilitation Act of 1973; (4) the Americans with Disabilities Act; (5) the Fair Labor Standards Act (including the Equal Pay Act); (6) the California and Federal Family and Medical Leave Act; (7) the Employee Retirement Income Security Act, as amended; (8) the Age Discrimination in Employment Act of 1967 (“ADEA”); (9) the Older Workers Benefit Protection Act (“OWBPA”); (10) the Federal Worker Adjustment and Retraining Notification Act; (11) the California Fair Employment and Housing Act; (12) the California Labor Code; (13) the Utah Antidiscrimination Act; and (14) the Utah Code, including the Utah Labor Code which Employee now has, owns or holds, or claims to have, own or hold, or which Employee at any time heretofore had, owned or held, or claimed to have, own or hold against any of the Releasees relating to any conduct occurring prior to and including the date of execution of this Agreement.

In addition, in return for the consideration identified in Paragraphs 3 and 4 above, Employee specifically represents that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have for age discrimination under the ADEA or OWBPA.

11.    Knowing and Voluntary Waiver. Section 1542 of the Civil Code of the State of California provides, generally, that a release does not extend to unknown claims. Specifically, Section 1542 of the Civil Code of the State of California states as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

For the purposes of implementing a full and complete release and discharge of Releasees, Employee expressly waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of the State of California and acknowledges that this Agreement is intended to include and discharge all claims which Employee does not know or suspect to exist at the time of execution of this Agreement related to Employee’s employment with the Company and/or the termination of that employment.

12.    Consideration Period. In accordance with the ADEA and OWBPA, Employee acknowledges that: (1) Employee has been advised by the Company that he is entitled to a period of forty-five (45) days from the Separation Date within which to consider this Agreement before signing it; (2) he is free to sign this Agreement at any time prior to the expiration of this forty-five (45) day period if he so wishes; (3) he expressly acknowledges that he has taken sufficient time to consider this Agreement before signing it; and (4) this Agreement is written in a manner that he can understand, and he has fully considered the terms and conditions of this Agreement.
13.    Revocation Period. Employee acknowledges that Employee is knowingly and voluntarily waiving and releasing any rights Employee may have under the ADEA and OWBPA. Employee also acknowledges that the consideration given for the waiver and release set forth in paragraphs 3 and 4 of this Agreement is in addition to anything of value to which Employee was already entitled. Employee further acknowledges that Employee has been advised by this writing, as required by the OWBPA Act, that:  (1) Employee’s waiver and release does not apply to any rights or claims that may arise after the effective date of this Agreement, or that are otherwise prohibited from release by law; (2) Employee should consult with an attorney prior to executing this Agreement; (3) Employee has up to forty-five (45) days from the Separation Date to consider this Agreement (although Employee may execute this Agreement earlier at the Employee’s discretion); (4) Employee has seven (7) days following execution of this Agreement to revoke the Agreement; and (5) this Agreement shall not be effective until the date upon which the revocation 

period has expired. Employee shall provide a fully executed copy of this Agreement to the Company, attention Leslie McMahon, the date of execution of which by Employee shall begin the seven-day revocation period. Employee may revoke this Release only by giving Ms. McMahon, formal, written notice of the revocation of this Agreement, which should be addressed to Skullcandy, Attn: Leslie McMahon, 1441 Ute Boulevard, Suite 250, Park City, UT 84098, and which should be received by Ms. McMahon, by the close of business on the seventh (7th) day following Employee’s execution of this Agreement.
14.    No Filings or Assignment. Employee represents that Employee has not initiated any suit or action before any federal, state or local judicial or administrative forum with respect to any matter arising out of or connected with Employee’s employment by the Company and/or the termination of that employment. Employee also represents that he has not previously transferred, assigned or conveyed any right or claim released in this Agreement. Employee further represents that he has not suffered any work-related injury during his employment with the Company that he has not reported to the Company.

15.    Confidentiality. Employee represents and agrees that Employee will keep the terms, amount and fact of this Agreement confidential, and that Employee will not disclose any information concerning this Agreement to any third person, other than Employee’s legal and financial advisors or members of Employee’s family, who shall also be advised of its confidentiality and who shall agree to be bound by this confidentiality agreement. Without limiting the generality of the foregoing, Employee specifically agrees that Employee shall not disclose information regarding this Agreement to any current or former employee of the Company. Employee agrees that a prohibited disclosure by Employee, Employee’s family, attorneys, agents, advisors or representatives, whether individually or jointly, of any of the terms and conditions in violation of the foregoing shall constitute and be treated as a material breach of this Agreement.

16.    Mutual Non-disparagement. The Parties agree that, for a period of one year following the Separation Date, they shall not, in any communications with the press or other media or to any customer, client or supplier of the Company, or any affiliate of the Company, criticize, ridicule or make any statement which disparages or is derogatory of each other or its affiliates or any of their respective directors or senior officers, employees or contractors. In responding to inquiries about Employee from prospective employers or other third parties, the Company shall confirm only Employee’s dates of employment, titles, and final rate of pay. 

17.    No Representations. Employee represents and acknowledges that in executing this Agreement Employee does not rely and has not relied on any representation or statement by any of the Releasees or by any of the Releasees’ agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement. 

18.    Binding Agreement/Governing Law. This Agreement shall be binding upon Employee and Employee’s heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of Releasees and each of them, and to their heirs, administrators, representatives, executors, successors, and assigns. This Agreement is made and entered into in the State of California, and shall in all respects be interpreted, enforced and governed under the laws of the State of California. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

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

20.    Encouragement to Consult With Attorney. Employee is encouraged to consult with an attorney before signing this Agreement, but is free to sign the Agreement at the Employee’s discretion.
21.    Voluntary Agreement. Employee acknowledges that Employee has carefully read and fully understands this entire Agreement, and that Employee is voluntarily entering into this Agreement. 
22.    Entire Agreement. This Agreement sets forth the entire agreement between the parties, and fully supersedes any and all prior agreements or understandings between the parties pertaining to the subject matter of the Agreement and/or Employee’s employment with the Company.

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Sincerely,

_______________________
Leslie McMahon
Director, Talent Crew

I expressly acknowledge that I enter this Agreement knowingly and voluntarily, without any coercion or duress, and that I have had an adequate opportunity to review this letter and to consult my attorney regarding it to the extent I wish to do so. I understand the contents of this letter, and I agree to all of its terms and conditions.

Date: ______________________                                    ______________________________
                                                                                               Kyle WescoatSKUL-EX10.35_12.31.13-10K

Exhibit 10.35
ASTRO GAMING 
Change in Control Plan
____________, 20__

 
Highlights 
Skullcandy, Inc. has created this Change in Control Plan (CIC) solely related to its AG Acquisition Corporation subsidiary, otherwise known as Astro Gaming, to reward Astro employees for their contributions to the long-term success of Astro. The objective of the CIC is to support Astro’s culture and provide an incentive to increase Astro’s value. The CIC is compensation in the form of a transaction award upon with the sale of Astro to an independent third party. As a participant in the CIC, employees play an important role in helping to achieve Astro’s goals and its future success. 
The CIC is designed to meet the following objectives: 
 
	
			
	 
	 
	Focus Astro’s employees on long-term performance; 

 
	
			
	 
	 
	Strengthen the link between pay and overall performance; 

 
	
			
	 
	 
	Offer competitive, market-based long-term incentive award opportunities; and 

 
	
			
	 
	 
	Align employee interests with long-term success of Astro. 

Eligibility 
Astro employees employed while the CIC is in effect are initially eligible to participate, capped at 40 participants during any one time, excluding Section 16 Officers.  An eligible employee’s participation in the CIC and any award determinations will be made solely by both the management of Astro and Skullcandy. Awards will be based on individual’s position and their ability to positively influence Astro’s long-term success, contributions and performance.  However, only eligible employees that remain employed through the sale of Astro to a third party will be eligible to receive any proceeds under the CIC.  If an eligible employee leaves Astro employment before the sale is completed, they will not be eligible to receive an award.  A sale or change of control relating to Skullcandy, Inc. automatically terminates the CIC and no payments are earned or owed by any participants in the CIC.  An eligibile employee will be notified in writing if they are a participant in the CIC.  
CIC Funding and Participation Criteria
		
	•
	Astro threshold valuation to be $50 million (Astro Gaming only)

		
	•
	CIC funded upon sale of Astro to an independent third party with 10% of net cash proceeds received by Skullcandy for sale of Astro in excess of the $50 million threshold

		
	•
	Sale of Astro to close on or before September 1, 2018

		
	•
	Eligible employee participation in CIC is based upon a percentage allocation of the CIC to each individual

		
	•
	Upon adoption of the CIC, approved eligible employees will be allocated a percentage payout of the CIC, as determined by both Astro and Skullcandy management.

		
	•
	New eligible employees may be added to the CIC at the beginning of each fiscal year upon the request of Astro management and approval of Skullcandy management

		
	•
	Percentage participation in CIC is based upon the following organization level guidelines: 10% Vice President, 5% Director, 2% Manager and 1% for all Individual Contributors 

		
	•
	At completion of sale, if the total CIC allocation does not equal 100%, then the existing allocations will be adjusted proportionately as needed so they sum to 100%.

		
	•
	If non-cash proceeds are received by Skullcandy, CIC valuation and funding will be determined at time non-cash proceeds are monetized, net of any transactional or other costs and/or deductions (excluding any governmental taxes).  

		
	•
	CIC funded based on cash proceeds received by Skullcandy only.  Other forms of consideration and holdbacks are not considered when determining initial funding of CIC.   

Transaction Award Example (Cash Transaction)
		
	•
	Astro sold for $150 million in cash, less $50 million threshold value, net cash proceeds received of $100 million 

		
	•
	Astro CIC funded with 10% of net cash proceeds received, or $10 million

		
	•
	Individual’s award percentage is 10% of CIC cash proceeds

		
	•
	Individual receives transaction award of $1,000,000, subject to applicable tax withholdings.

Transaction Award Example (Cash and Equity Transaction)
		
	•
	Astro sold for $100 million ($50 million cash and $50 million equity), less $50 million threshold value and $10 million costs, net proceeds received $40 million at close

		
	•
	Astro CIC not funded at close because no cash proceeds received in excess of threshold value

		
	•
	Equity monetized two years later for $30 million in cash ($10 million less than value of equity at close)

		
	•
	Astro CIC funded with 10% of cash proceeds received, or $3 million

		
	•
	Individual receives transaction award of $300,000, subject to applicable tax withholdings.

		
	•
	CIC funded based on cash proceeds received by Skullcandy only.  Other forms of consideration and holdbacks are not considered when determining initial funding of CIC.   

Administration of the Plan 
The CIC will be administered by Skullcandy’s Human Resource Department, which will have discretionary authority to interpret and modify the CIC as appropriate, and take any actions it deems necessary or advisable to carry out its duties under the CIC.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}]]