July 5, 2000
PERSONAL & CONFIDENTIAL
Bill Bracy
Bell Sports, Inc.
6350 San Ignacio
San Jose, California 95119
Re: Separation Agreement
Dear Bill,
This Letter Agreement ("Agreement") sets forth the terms and conditions of
your separation from Bell Sports Corp. and Bell Sports, Inc. (collectively, the
"Company"). Your employment with the Company will be terminated as of August 4,
2000. The Company appreciates your service to Bell Sports and sincerely wishes
you the very best in your future endeavors.
In consideration of the mutual covenants and promises made in this
Agreement, you and the Company agree as follows:
EFFECTIVE DATE OF AGREEMENT. This Agreement will be effective as of the
eighth day after you sign it.
TERMINATION. Your employment with the Company will be terminated effective
August 4, 2000.
SEPARATION COMPENSATION. In consideration for your signing this Agreement,
the Company agrees to pay to you, within ten (10) days following the date of
your termination, at the home address listed in your employment records,
Separation Compensation as set forth below (less all applicable state and
federal tax withholding and other lawful deductions, and any loan amounts
outstanding to the Company):
(1) The full annual bonus to which you would have been entitles for the
current fiscal year, as if you were fully employed for the fiscal year, if
earned and payable when other employee bonus payments are made following the
year end audit, in the amount of Two Hundred Sixty One Thousand Dollars
($261,000.00); and
<PAGE>
(2) A lump-sum amount equal to your highest annual base salary in effect
during the 12-month period prior to the date of your termination, in the amount
of Two Hundred Ninety Thousand Dollars ($290,000.00).
BENEFIT CONTINUATION. For a period of one year from the date of your
termination, the Company will continue to keep in full force and effect all
medical, dental, accident, disability and life insurance plans with respect to
you and your dependents with the same level of coverage, upon the same terms,
and to the same extent as such plans were in effect immediately prior to your
termination. Your execution of this Agreement will not be considered a waiver of
any rights or entitlements you and your dependents may have under applicable law
to continuation of coverage under the group medical plan maintained by the
Company
OUTPLACEMENT SERVICES. The Company will reimburse you for your expenditures
for obtaining outplacement services, provided, however, that the Company will
have no obligation to reimburse you in an amount exceeding 10% of your highest
annual base salary from the Company in effect during the 12-month period prior
to your termination.
OUTSTANDING LOANS. There are currently two outstanding loans to you, which
will be treated as follows:
(1) A loan in the amount of One Hundred Fifty Thousand Dollars
($150,000.00), with a current principal balance of One Hundred Twelve Thousand
Five Hundred Dollars ($112,500.00), evidenced by the Promissory Note dated April
8, 1998 between you and Chris Bracy as payors and Bell Sports, Inc. as payee. By
its own terms, this note provides that the principal balance is due and payable
upon your termination, and the outstanding balance will be deducted from the
amount of your Separation Compensation; and
(2) A loan in the amount of One Hundred Fifteen Thousand Ten Dollars and
Seventy Seven Cents ($115,010.77), with a current principal balance of Ninety
One Thousand One Hundred Sixty One Dollars and Seven Cents ($91,161.07),
evidenced by the Promissory Note dated January 29, 1999 between you as maker and
Bell Sports Corp. as payee. Payment of this note will be accelerated pursuant to
the terms and conditions of the Bell Sports Corp. Investment and Incentive Plan
and the Bell Sports Corp. Class C Investment Plan, both dated December 21, 1998,
and the outstanding balance will become payable upon the earlier to occur of (i)
a Liquidity Event (in which case this Promissory Note will become immediately
due and payable) or (ii) your employment termination date of August 4, 2000 (in
which case the amount due and payable will be deducted from the amount of your
Separation Compensation).
STOCK. Notwithstanding any provision to the contrary which may be contained
in either the Bell Sports Corp. Investment and Incentive Plan or the Bell Sports
Corp. Class C Investment and Incentive Plan, the shares of Series A Preferred
Stock, Class A Common Stock, Class B Common Stock, and Class C Common Stock
described in the Bell Sports Corp. Form of Stock Purchase Agreement and the Bell
2
<PAGE>
Sports Corp. Form of Class C Stock Purchase Agreement, both dated January 29,
1999 will continue to vest to the degree consistent with your employment by the
Company until October 1, 2000
RELEASE. You hereby release and discharge the Company and its divisions,
affiliates, parents, subsidiaries, predecessor and successor corporations, and
the past and present directors, officers, management committees, shareholders,
agents, servants, employees, representatives, administrators, partners, general
partners, managing partners, limited partners, benefit plan fiduciaries and
administrators, assigns, heirs, successors or predecessors in interest,
adjustors, and attorneys, from all rights, claims, causes of action, and
damages, both known and unknown, in law or in equity, concerning and/or arising
out of your employment with the Company prior to the date of this Agreement
which you now have, or ever had, included but not limited to any rights, claims,
causes of action or damages arising under Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act of 1967, the Older Workers'
Benefit Protection Act, Employee Retirement Income Security Act, the Americans
with Disabilities Act, the California Fair Employment and Housing Act, and the
California Labor Code.
You hereby waive and relinquish all rights and benefits afforded by
California Civil Code section 1542. You understand and acknowledge the
significance and consequences of this specific waiver of section 1542.
California Civil Code section 1542 states as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known to him must have materially affected his settlement with the
debtor.
RETURN OF COMPANY PROPERTY; EXPENSES. You agree to immediately return all
Company property and equipment in your possession or under your control,
including, but not limited to, keys, car phone, computer hardware and software,
manuals, notebooks, financial statements, reports, product samples, and any
other property of the Company. You must immediately submit to the Company all
outstanding business expenses incurred on or before your termination, for
reconciliation and payment.
TRADE SECRETS. You acknowledge and agree that: (a) by reason of your
position with the Company, you have been given access to certain pricing
structures, product development ideas, product specifications, product samples,
customer lists, and agreements, fee schedules, and various agreements between
the Company and its customers, vendors, sales representatives, contractors,
licensees and others which are unique to the Company, as well as the Company's
financial records and other confidential materials and information; and (b) the
foregoing constitute trade secrets and/or confidential information respecting
the Company's business affairs. You agree, covenant and represent, that you have
held, and will hold, all such trade secrets and/or confidential information
confidential and that you will not disclose or use such information for any
3
<PAGE>
reason without the prior written consent of the Company. You agree that you will
immediately return all documents and writings of any kind, including both
originals and copies, within your custody, possession, or control, which contain
any information which in any way relates or refers to the Company's trade
secrets or confidential information. You further agree not to solicit or attempt
to solicit directly or indirectly, any employees or contractors of the Company
or its affiliates, either for your own purpose or for any other person or
entity. You further agree not to divulge any of the Company's trade secrets or
confidential information to solicit or attempt to solicit, directly or
indirectly, contractors, licensees, or customers of the Company either for your
own purpose of for any other person or entity.
LEGAL REPRESENTATION. You and the Company each acknowledge that you have
had the opportunity to receive the advice of independent legal counsel prior to
the execution of the Agreement and the opportunity to receive an explanation
from legal counsel of the legal nature and effect of the Agreement, and you have
fully exercised that opportunity to the extent desired and you understand the
terms and provisions of this Agreement and its nature and effect. You further
represent that you are entering into this Agreement freely and voluntarily.
NO ADMISSION OF LIABILITY. Nothing contained in this Agreement or the fact
that the Company has signed this Agreement shall be considered as admission of
any liability whatsoever by the Company.
CONFIDENTIALITY. As a material inducement to the Company to enter into this
Agreement and as an indivisible part of the consideration to be received for
entering into this Agreement and for the performance of obligations under this
Agreement by each party to this Agreement, you agree that you will not disclose,
disseminate, and/or publicize or cause or permit to be disclosed, disseminated,
and/or publicized, any of the specific terms of this Agreement, any claims or
allegations or the basis for any claims or allegations, which were or could have
been made against the Company and its divisions, affiliates, parents,
subsidiaries, predecessor and successor corporations, and the past and present
directors, officers, management committees, shareholders, agents, servants,
employees, representatives, administrators, partners, general partners, managing
partners, limited partners, benefit plan fiduciaries and administrators,
assigns, heirs, successors or predecessors in interest, adjustors, and
attorneys, which concern and are within the scope of this Agreement, directly or
indirectly, specifically or generally, to any person, corporation, association,
governmental agency, or other entity except: (a) to the extent necessary to
report income to appropriate taxing authorities; (b) in response to an order of
a court of competent jurisdiction or a subpoena issued under authority thereof;
(c) in response to any subpoena issue d by a state or federal governmental
agency; or (d) as otherwise required by law.
NON DISPARAGEMENT. As a material inducement to both you and the Company to
enter into this Agreement, you and the Company each agree that you and the
Company will not make any negative or disparaging comments about one another.
4
<PAGE>
WAIVER. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar. No waiver shall constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party charged with the waiver.
SEVERABILITY. In the event any provision of the Agreement shall be
determined to be unlawful, such provision shall be deemed to be severed from
this Agreement and every other provision of this Agreement shall remain in full
force and effect.
ENTIRE INTEGRATED AGREEMENT. This Agreement constitutes the entire
integrated agreement between you and the Company and supersedes any and all
other agreements, understandings, negotiations, or discussions, either oral or
in writing, express or implied, between you and the Company.
FEES AND COSTS. You and the Company agree that in the event of litigation
relating to this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees and costs.
CONSIDERATION PERIOD. You have twenty-one (21) days from receipt of this
Agreement to consider it. The Company hereby advises you to consult with an
attorney before signing this Agreement.
REVOCATION PERIOD. For a period of seven (7) days following the signing of
this Agreement, you may revoke this Agreement. The Agreement does not become
effective or enforceable until the revocation period has expired.
Please acknowledge your understanding and acceptance of this Agreement by
signing this Agreement below and returning it to me at your earliest
convenience, but no later than 5:00 p.m. on __________, 2000, the twenty-first
day from the day you receive this Agreement. An extra copy of the Agreement has
been signed by me and is attached for your records.
Sincerely,
BELL SPORTS CORP.
By: /s/ Tikie Holewski
------------------------------------
Its: Senior Vice President
BELL SPORTS, INC.
By: /s/ Tikie Holewski
------------------------------------
Its: Senior Vice President
ACKNOWLEDGED AND AGREED:
Dated: July 10, 2000. /s/ W L Bracy
----------------------------------------
William Bracy
5
