Document:

exv10w69

EXHIBIT 10.69

SEVERANCE AND CHANGE IN CONTROL AGREEMENT

     SEVERANCE AND CHANGE IN CONTROL AGREEMENT dated June 27 2008, by and between SMITH & WESSON
HOLDING CORPORATION, a Nevada corporation (“Employer”), and William F. Spengler (“Employee”).

     WHEREAS, Employer desires to engage Employee as Executive Vice President and Chief Financial
Officer of Employer.

     WHEREAS, Employer and Employee desire to agree to the results of any termination of Employee’s
employment under certain circumstances.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:

     1. Definitions.

          (a) “Cause” shall mean any termination of Employee’s employment by Employer as a result of
Employee engaging in an act or acts involving a crime, moral turpitude, fraud, or dishonesty;
Employee taking any action that may be injurious to the business or reputation of Employer; or
Employee willfully violating in a material respect Employer’s Corporate Governance Guidelines, Code
of Conduct, or any applicable Code of Ethics, including, without limitation, the provisions thereof
relating to conflicts of interest or related party transactions.

          (b) “Change in Control” of Employer shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934 as in effect on the date of this Agreement or, if Item
6(e) is no longer in effect, any regulations issued by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 that serve similar purposes; provided that, without
limitation, such a Change in Control shall be deemed to have occurred if and when (i) any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
directly or indirectly of equity securities of Employer representing 20 percent or more of the
combined voting power of Employer’s then-outstanding equity securities, except that this provision
shall not apply to any person currently owning at least five percent or more of the combined voting
power of Employer’s currently outstanding equity securities or to an acquisition of up to 20
percent of the then-outstanding voting securities that has been approved by at least 75 percent of
the members of the Board of Directors who are not affiliates or associates of such person; (ii)
during the period of this Agreement, individuals who, at the beginning of such period, constituted
the Board of Directors of Employer (the “Original Directors”), cease for any reason to constitute
at least a majority thereof unless the election or nomination for election of each new director was
approved (an “Approved Director”) by the vote of a Board of Directors constituted entirely of
Existing Directors and/or Approved Directors; (iii) a tender offer or exchange offer is made
whereby the effect of such offer is to take over and control Employer, and such offer is consummated for
the equity securities of Employer representing 20 percent or more of the combined voting power of

 

 

Employer’s then-outstanding voting securities; (iv) Employer is merged, consolidated, or enters
into a reorganization transaction with another person and, as the result of such merger,
consolidation, or reorganization, less than 75 percent of the outstanding equity securities of the
surviving or resulting person shall then be owned in the aggregate by the former stockholders of
Employer; or (v) Employer transfers substantially all of its assets to another person or entity
that is not a wholly owned subsidiary of Employer. Sales of Employer’s Common Stock beneficially
owned or controlled by Employee shall not be considered in determining whether a Change in Control
has occurred.

     2. Result of Termination Other than for Cause. In the event that Employer terminates Employee’s
employment with Employer other than for
Cause, (a) Employer shall pay Employee’s base salary for a period of 12 months following such
termination, (b) Employer shall pay to Employee, at the same time as bonuses are paid to Employer’s
other executives, a portion of the bonus earned by Employee pro rata for the period commencing on
the first day of the fiscal year for which the bonus is calculated and ending on the date of
termination; and (c) all unvested stock-based compensation held by Employee shall vest as of the
date of termination.

     3. Termination Following Change in Control. In the event of a “Change in Control” of Employer,
Employee, at Employee’s option and upon
written notice to Employer, may terminate Employee’s employment effective on the date of the notice
with the same force and effect as if such termination were other than for Cause as provided in
Section 2 above, except that the 12-month period shall be 18 months, unless (A) the Change in
Control shall have been approved by the Board of Directors of the Company, (B) the provisions of
this Agreement remain in full force and effect as to Employee and (C) Employee suffers no reduction
in Employee’s status, duties, authority, or compensation following such Change in Control, provided
that Employee will be considered to suffer a reduction in Employee’s status, duties, authority, or
if, after the Change in Control, (i) Employee is not the chief financial officer of the company
that succeeds to the business conducted by Employer and its subsidiaries immediately prior to the
Change in Control, (ii) such company’s common stock is not listed on a national stock exchange
(such as the New York Stock Exchange, the Nasdaq National Market, or the American Stock Exchange),
(iii) such company terminates Employee or reduces Employee’s status, duties, authority, or
compensation within one year of the Change in Control, or (iv) as a result of such Change in
Control Employee is required to relocate out of either Springfield, Massachusetts (or surrounding
areas) or Washington, D.C. (or surrounding areas).

     4. Competition and Confidential Information.

          (a) Interests to be Protected. The parties acknowledge that Employee will perform essential
services for Employer, its
employees, and its stockholders during the term of Employee’s employment with Employer. Employee
will be exposed to, have access to, and work with, a considerable amount of Confidential
Information (as defined below). The parties also expressly recognize and acknowledge that the
personnel of Employer have been trained by, and are valuable to, Employer and that Employer will
incur substantial recruiting and training expenses if Employer must hire new personnel or retrain
existing personnel to fill vacancies. The parties expressly recognize that it could seriously
impair the goodwill and diminish the value of Employer’s business should Employee compete with
Employer in any

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manner whatsoever. The parties acknowledge that this covenant has an extended
duration; however, they agree that this covenant is reasonable and it is necessary for the
protection of Employer, its stockholders, and employees. For these and other reasons, and the fact
that there are many other employment opportunities available to Employee if his employment is
terminated, the parties are in full and complete agreement that the following restrictive covenants
are fair and reasonable and are entered into freely, voluntarily, and knowingly. Furthermore, each
party was given the opportunity to consult with independent legal counsel before entering into this
Agreement.

          (b) Non-Competition. For the period equal to 12 months after the termination of Employee’s employment with
Employer for any reason, Employee shall not (whether directly or indirectly, as owner, principal,
agent, stockholder, director, officer, manager, employee, partner, participant, or in any other
capacity) engage or become financially interested in any competitive business conducted within the
Restricted Territory (as defined below). As used herein, the term “competitive business” shall
mean any business that sells or provides or attempts to sell or provide products or services the
same as or substantially similar to the products or services sold or provided by Employer during
Employee’s employment, and the term “Restricted Territory” shall mean any state or other
geographical in which Employer sells products or provides services during Employee’s employment.

          (c) Non-Solicitation of Employees. For a period of 24 months after the termination of
Employee’s employment with Employer for
any reason, Employee shall not directly or indirectly, for Employee, or on behalf of, or in
conjunction with, any other person, company, partnership, corporation, or governmental entity,
solicit for employment, seek to hire, or hire any person or persons who is employed by or was
employed by Employer within 12 months of the termination of Employee’s employment for the purpose
of having any such employee engage in services that are the same as or similar or related to the
services that such employee provided for Employer.

          (d) Confidential Information. Employee shall maintain in strict secrecy all confidential
or trade secret information
relating to the business of Employer (the “Confidential Information”) obtained by Employee in the
course of Employee’s employment, and Employee shall not, unless first authorized in writing by
Employer, disclose to, or use for Employee’s benefit or for the benefit of, any person, firm, or
entity at any time either during or subsequent to the term of Employee’s employment, any
Confidential Information, except as required in the performance of Employee’s duties on behalf
of Employer. For purposes hereof, Confidential Information shall include without limitation any
materials, trade secrets, knowledge, or information with respect to management, operational, or
investment policies and practices of Employer; any business methods or forms; any names or
addresses of customers or data on customers or suppliers; and any business policies or other
information relating to or dealing with the management, operational, or investment policies or
practices of Employer.

          (e) Return of Books, Records, Papers, and Equipment. Upon the termination of Employee’s employment
with Employer for any reason, Employee shall
deliver promptly to Employer all files, lists, books, records, manuals, memoranda, drawings, and
specifications; all cost, pricing, and other financial data; all other written or printed materials
and computers, cell phones, PDAs, and other equipment that are the property of Employer (and any

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copies of them); and all other materials that may contain Confidential Information relating to the
business of Employer, which Employee may then have in Employee’s possession or control whether
prepared by Employee or not.

          (f) Disclosure of Information. Employee shall disclose promptly to Employer, or its nominee, any and all ideas, designs,
processes, and improvements of any kind relating to the business of Employer, whether patentable or
not, conceived or made by Employee, either alone or jointly with others, during working hours or
otherwise, during the entire period of Employee’s employment with Employer or within six months
thereafter.

          (g) Assignment. Employee hereby assigns to Employer or its nominee, the entire right, title, and interest
in and to all inventions, discoveries, and improvements, whether patentable or not, that Employee
may conceive or make during Employee’s employment with Employer, or within six months thereafter,
and which relate to the business of Employer.

          (h) Equitable Relief. In the event a violation of any of the restrictions contained in this Section occurs,
Employer shall be entitled to preliminary and permanent injunctive relief as well as damages and an
equitable accounting of all earnings, profits, and other benefits arising from such violation,
which right shall be cumulative and in addition to any other rights or remedies to which Employer
may be entitled. In the event of a violation of any provision of subsection (b), (c), (f), or (g)
of this Section, the period for which those provisions would remain in effect shall be extended for
a period of time equal to that period beginning when such violation commenced and ending when the
activities constituting such violation shall have been finally terminated in good faith.

          (i) Restrictions Separable. If the scope of any provision of this Agreement (whether in this Section 4 or otherwise) is
found by a Court to be too broad to permit enforcement to its full extent, then such provision
shall be enforced to the maximum extent permitted by law. The parties agree that the scope of any
provision of this Agreement may be modified by a judge in any proceeding to enforce this Agreement,
so that such provision can be enforced to the maximum extent permitted by law. Each and every
restriction set forth in this Section 4 is independent and severable from the others, and no such
restriction shall be rendered unenforceable by virtue of the fact that, for any reason, any other
or others of them may be unenforceable in whole or in part.

     5. Miscellaneous.

          (a) Notices. All notices, requests, demands, and other communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been duly given, made, and received (i)
if personally delivered, on the date of delivery, (ii) if by facsimile or e-mail transmission, upon
receipt, (iii) if mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, and addressed as provided below, or (iv) if
by a courier delivery service providing overnight or “next-day” delivery, on the next business day
after deposit with such service addressed as follows:

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	 	(1)	 	If to Employer:

2100 Roosevelt Avenue

Springfield, Massachusetts 01104

Attention: Chief Executive Officer

Phone: (413) 747-3349

Facsimile: (413) 739-8528

E-Mail: mgolden@smith-wesson.com
	 
	 	(2)	 	If to Employee:

2100 Roosevelt Avenue

Springfield, Massachusetts 01104-1606

Phone: (800) 331-0852

Facsimile: (413) 739-8528

E-Mail: wspengler@smith-wesson.com

Either party may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this Section 5 for the giving
of notice.

          (b) Indulgences; Waivers. Neither any failure nor any delay on the part of either party to exercise any right,
remedy, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power, or privilege preclude any other or further
exercise of the same or of any other right, remedy, power, or privilege, nor shall any waiver of
any right, remedy, power, or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power, or privilege with respect to any other occurrence. No waiver shall be
binding unless executed in writing by the party making the waiver.

          (c) Controlling Law. This Agreement and all questions relating to its validity, interpretation, performance and
enforcement, shall be governed by and construed in accordance with the laws of the state of
Massachusetts, notwithstanding any Massachusetts or other conflict-of-interest provisions to the
contrary. Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the
courts of the state of Massachusetts located in Hampden County and the United States District Court
for the District of Massachusetts for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action, or proceeding may be served on each party hereto
anywhere in the world by the same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court
in any such suit, action, or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE
PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN
ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

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          (d) Binding Nature of Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors, and assigns, except that no party may
assign or transfer such party’s rights or obligations under this Agreement without the prior
written consent of the other party.

          (e) Execution in Counterpart. This Agreement may be executed in any number of counterparts, each of which shall be deemed
to be an original as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the signatures of the parties
reflected hereon as the signatories.

          (f) Provisions Separable. The provisions of this Agreement are independent of and separable from each other, and no
provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in whole or in part.

          (g) Entire Agreement. This Agreement contains the entire understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements, and conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of performance and/or usage
of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

          (h) No Participation in Severance Plans. Except as contemplated by this Agreement, Employee acknowledges and agrees that the
compensation and other benefits set forth in this Agreement are and shall be in lieu of any
compensation or other benefits that may otherwise be payable to or on behalf of Employee pursuant
to the terms of any severance pay arrangement of Employer or any affiliate thereof, or any other
similar arrangement of Employer or any affiliates thereof providing for benefits upon involuntary
termination of employment.

          (i) Paragraph Headings. The paragraph headings in this Agreement are for convenience only; they form no part of
this Agreement and shall not affect its interpretation.

          (j) Gender. Words used herein, regardless of the number and gender specifically used, shall be deemed
and construed to include any other number, singular or plural, and any other gender, masculine,
feminine, or neuter, as the context requires.

          (k) Number of Days. In computing the number of days for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays, and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday, or holiday, then the final day shall be deemed to be the next
day that is not a Saturday, Sunday, or holiday.

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     6. Successors and Assigns.

     This Agreement shall inure to the benefit of and be binding upon the successors and assigns of
the parties hereto; provided that because the obligations of Employee hereunder involve the
performance of personal services, such obligations shall not be delegated by Employee. For
purposes of this Agreement successors and assigns shall include, but not be limited to, any
individual, corporation, trust, partnership, or other entity that acquires a majority of the stock
or assets of Employer by sale, merger, consolidation, liquidation, or other form of transfer.
Employer will require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business and/or assets of Employer
to expressly assume and agree to perform this Agreement in the same manner and to the same extent
that Employer would be required to perform it if no such succession had taken place. Without
limiting the foregoing, unless the context otherwise requires, the term “Employer” includes all
subsidiaries of Employer.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	SMITH & WESSON HOLDING CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 /s/ Michael Golden	 	 
	 

	 	 	 	 

Michael Golden
	 	 
	 

	 	 	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 
	 	/s/ William F. Spengler 	 	 	 	 
	 	 	 	 	 
	 	 	William F. Spengler	 	 

7Exhibit 4.1 - Specimen Stock Certificate.

Exhibit 4.1

 

	Number  	  	Shares  
	10-4 CORPORATION 
	INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA 
	200,000,000 SHARES COMMON STOCK AUTHORIZED, 
	$0.00001 PAR VALUE 
	  
	  	  	CUSIP  
	  	  	SEE REVERSE  
	  	  	FOR  
	This  	  	CERTAIN  
	certifies  	  	DEFINITIONS  
	that  	  	  
	is the owner of  	  	  
	  
	  
	FULLY PAID AND NON-ASSESSABLE 
	SHARES OF COMMON STOCK OF 
	  
	  
	10-4 CORPORATION 
	transferable on the books of the corporation in person or by duly 
	authorized attorney upon surrender of this certificate properly 
	endorsed. This certificate and the shares represented hereby 
	are subject to the laws of the State of Nevada, and to the 
	Articles of Incorporation and Bylaws of the Corporation, 
	as now or hereafter amended. This certificate is not valid 
	unless countersigned by the Transfer Agent. WITNESS 
	the facsimile seal of the Corporation and the signature 
	of its duly authorized officers 
	  
	  
	  
	  
	PRESIDENT  	[SEAL]  	SECRETARY  

 

 

 

 

     The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations.

	TEN COM  	as tenants in common  	UNIF GIFT MIN ACT  _______________	Custodian _______________ 
	TEN ENT  	as tenants by the entireties  	                                        (Cust)  	                (Minor)  
	JT TEN  	as joint tenants with the right of  	                                                   Act________________________________  
	  	survivorship and not as tenants  	  	(State)  
	  	in common  	  	  

Additional abbreviations may also be used though not in the above list.

	For value received,  	________________________________	hereby sell, assign and transfer unto  
	  	PLEASE INSERT SOCIAL SECURITY OR OTHER  	  
	  	IDENTIFYING NUMBER OF ASSIGNEE  	  

_____________________________________________________________________________________

                (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________________

_____________________________________________________________________________ shares of 

the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

_____________________________________________________________________________, Attorney to 

transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.

Dated _______________________

X ________________________________________________________________________________

THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE IN 

EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) MUST BE 

GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions)

 

 

SIGNATURE GUARANTEED:

 

 

TRANSFER FEE WILL APPLY

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