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HomeMy WebLinkAbout05-6737Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN. LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) OF COUNSEL: Ronald E. Richman Heather Weine Brochin (pro hac vice to be filed) SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 Attorneys for Plaintiff Ames True Temper, Inc. AMES TRUE TEMPER, INC Plaintiff, N1 ? G 0\J kL IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY - CIVIL. ACTION V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART, Defendants. NO: O 5 - t?'7_3'1 oc u ` , ef2-1-71 JURY TRIAL DEMANDED NOTICE TO DEFEND You have been sued in court. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this complaint and notice are served, by entering a written appearance personally or by attorney and filing in writing with the court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the complaint or for any claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW. THIS OFFICE CAN PROVIDE YOU WITH INFORMATION ABOUT HIRING A LAWYER. IF YOU CANNOT AFFORD A LAWYER, THIS OFFICE MAY BE ABLE TO PROVIDE YOU WITH INFORMATION ABOUT AGENCIES THAT MAY OFFER LEGAL SERVICES TO ELIGIBLE PERSONS AT A REDUCED FEE OR NO FEE. Cumberland County Bar Association 2 Liberty Avenue Carlisle, Pennsylvania 17013 (717) 249-3166 Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) OF COUNSEL: Ronald E. Richman Heather Weine Brochin (pro hac vice to be filed) SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 Attorneys for Plaintiff Ames True Temper, Inc. AMES TRUE TEMPER,, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND Plaintiff, COUNTY - CIVIL ACTION CONN-SELMER, INC., STEINWAY NO: d MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART, Defendants. JURY TRIAL DEMANDED COMPLAINT Plaintiff Ames True Temper, Inc. ("ATT"), by and through the undersigned attorneys allege as follows: NATURE OF THE ACTION Defendants Conn-Selmer, Inc. ("Conn-Selmer"), Steinway Musical Instruments, Inc. ('Steinway"), John M. Stoner Jr. ("Stoner"), and Judy A. Schuchart ("Schuchart") (collectively, "Defendants") have wrongfully and intentionally conspired to raid ATT's employees. 2. In connection with such actions: (a) Stoner and Schuchart solicited for employment and/or hired numerous ATT employees and/or adversely influenced their employment with ATT in blatant violation of Stoner's and Schuchart's contractual obligations to ATT; (b) Conn-Selmer, Steinway, and Stoner, as applicable, unlawfully and intentionally interfered with Stoner's and Schuchart's contractual relationships with ATT and encouraged Stoner and Schuchart to violate their contractual obligations to ATT; (c,) Schuchart knowingly and willfully breached her duty of loyalty to ATT by encouraging several ATT employees to join Conn-Selmer and performing other services for Conn-Selmer during her employment with ATT; (d) Stoner, Conn-Selmer, and Steinway knowingly participated in, induced and/or substantially assisted in the breach of Schuchart's duty of loyalty to ATT; and (e) Conn-Selmer, Steinway, Stoner, and Schuchart jointly sought to solicit ATT employees in blatant violation of contractual obligations. As a result of Defendants' wrongful conduct, ATT seeks damages and injunctive relief for its claims of breach of contract, intentional interference with contractual relations, tortious interference with business relations, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and conspiracy tort. JURISDICTION AND VENUE 4. This Court may exercise personal jurisdiction over all the Defendants because they caused a harm and/or tortious injury in this jurisdiction by acts committed within and outside this county. 2 5. This Court also may exercise personal jurisdiction over defendants Conn- Selmer and Steinway, generally, because, upon information and belief, they carry on a continuous and systematic part of their business within the state of Pennsylvania. 6. This Court also may exercise personal jurisdiction over defendants Schuchart and Stoner because they contracted to provide services in this county and the dispute in this action arose from such contract. Venue in this Court is proper because a substantial part of the events giving rise to this action occurred within this county. THE PARTIES 8. Plaintiff ATT is a corporation organized under the laws of the State of Delaware, and maintains a principal place of business at 465 Railroad Avenue, Camp Hill, Pennsylvania. 9. Upon information and belief, defendant Conn-Selmer is a corporation organized under the laws of the State of Delaware, and maintains a principal place of business at 600 Industrial Parkway, Elkhart, Indiana. 10. Upon information and belief, defendant Conn-Selmer is a wholly owned subsidiary of defendant Steinway. 11. Upon information and belief, defendant Steinway is a corporation organized under the laws of the State of Delaware, and maintains a principal place of business at 800 South Street, Suite 305, Waltham, Massachusetts. 12. Upon information and belief, defendant Stoner resides at 51251 Pebble Beach Court, Granger, Indiana. 13. Upon information and belief, defendant Schuchart resides at 50593 Hollybrook Drive, Granger, Indiana. ALLEGATIONS COMMON TO ALL CAUSES OF ACTION Stoner's Binding Agreements with ATT 14. From October 17, 1977 until August 24, 2002, Stoner was an employee of ATT and/or its predecessor. He served as the President and Chief Executive Officer of ATT for a period ending January 14, 2002. After serving as President and Chief Executive Officer, Stoner served as President of Sales and Marketing until August 24, 2002. Stoner also served as President of True Temper Hardware Company, a predecessor of ATT, from November 29, 1995 until October 31, 1999. 15. In connection with his employment with ATT, Stoner executed the Amended and Restated Employment Agreement, dated February 28, 2002, including the exhibits annexed thereto ("Stoner's Employment Agreement"). (A copy of the Stoner Employment Agreement is annexed hereto as Exhibit 1.) 16. Stoner's Employment Agreement attached as Exhibit B and incorporated by reference the Confidentiality, Invention and Non-Solicitation Agreement ("Stoner's Non- Solicitation Agreement") also executed by Stoner. Pursuant to Stoner's Non-Solicitation Agreement, Stoner agreed to following: [he] will not, during the term of [his] employment with [ATT] and for two (2) years thereafter (the "Restricted Period"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity: (i) employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of [his] employment with [ATT] for any reason, an employee of [ATT] or otherwise seek to adversely influence or alter such individual's relationship with [ATT] ... 17. By letter agreement dated August 14, 2002 and executed by Stoner on August 19, 2002 (the "Non-Solicitation Extension Agreement"), Stoner .agreed to extend the 4 "Restricted Period," as defined in Stoner's Employment Agreement and Stoner's Non-Solicitation Agreement, to three (3) years in exchange for a bonus payment equal to $155,000. (A copy of the Non-Solicitation Extension Agreement is annexed hereto as Exhibit 2.) 18. Pursuant to the Separation Agreement and General Release, executed by Stoner on August 19, 2002 (the "Separation Agreement") which is attached as Exhibit D to the Separation Agreement, Stoner reaffirmed his agreement to be bound by Stoner's Non-Solicitation Agreement and the Non-Solicitation Extension Agreement (together, "Stoner's Extended Non- Solicitation Agreement"), and the Company agreed to provide Stoner with salary continuation equal to $260,000 and payment of the Company portion of Stoner's health premiums for a period of one year in addition to the bonus payment set forth in the Non-Solicitation Extension Agreement. Schuchart's Binding Agreements with ATT 19. From March 18, 1996 until July 18, 2005, Schuchart was an employee of ATT. She served as the Chief Financial Officer from January 2002 until July 18, 2005. 20. In connection with her employment with ATT, Schuchart executed the Amended and Restated Employment Agreement, dated June 28, 2004, including the exhibits annexed thereto ("Schuchart's Employment Agreement"). (A copy of the Schuchart Employment Agreement is annexed hereto as Exhibit 3.) 21. Schuchart's Employment Agreement attached as Exhibit A and incorporated by reference the Confidentiality, Invention, Non-Competition and Non-Solicitation Agreement ("Schuchart's Non-Solicitation Agreement") also executed by Schuchart. Pursuant to Schuchart's Non-Solicitation Agreement, Schuchart agreed to the following: [she] will not, during the Restricted Period, directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity: (i) employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of [her] employment with [ATT] for any reason, an employee of [ATT] or otherwise seek to adversely influence or alter such individual's relationship with [ATT] ... 22. Schuchart's Non-Solicitation Agreement defined the "Restricted Period" as the period from June 28, 2004, when a certain defined transaction closed, until two years following the termination of her employment for any reason. 23. Both Stoner's Extended Non-Solicitation Agreement and Schuchart's Non- Solicitation Agreement (together, the "Non-Solicitation Agreements") also provide that the "Restricted Period shall be extended for a period equal to any time period that" the applicable individual is in violation of the non-solicitation obligations. Stoner, Conn-Selmer, and Steinway Solicit and Hire Schuchart in Violation of Stoner's Extended Non-Solicitation Agreement 24. Following the termination of Stoner's employment with ATT, Stoner commenced employment with Conn-Selmer or its predecessor. 25. Upon information and belief, during all times relevant to the instant action, Stoner served as President and Chief Executive Officer of Conn-Selmer and served on Steinway's board of directors. 26. From the termination of Stoner's employment from ATT on August 24, 2002 until August 24, 2005, Stoner was prohibited, pursuant to Stoner's Extended Non- Solicitation Agreement, from directly or indirectly soliciting or employing any ATT employees or certain former employees or otherwise adversely influencing or altering their relationships with ATT. 27. Upon information and belief, during all times relevant to the instant action, members of Steinway's board of directors were aware that Stoner's Extended Non- Solicitation Agreement restricted him from directly or indirectly soliciting or employing any ATT employees or certain former employees or otherwise adversely influencing or altering their relationships with ATT until August 24, 2005. 28. Upon information and belief, members of Steinway's board of directors and/or in-house counsel for Steinway repeatedly advised Stoner regarding means to circumvent his obligations to ATT pursuant to Stoner's Extended Non-Solicitation Agreement. 29. Prior to the expiration of his obligations under Stoner's Extended Non- Solicitation Agreement, Stoner solicited Schuchart for employment with Conn-Selmer. Upon information and belief, Stoner strongly supported her as an applicant to other Conn-Selmer employees and Steinway's board of directors and assisted her in the interview process. 30. Upon information and belief, prior to and during the time Stoner solicited Schuchart for employment with Conn-Selmer, Stoner and Schuchart were involved in an intimate, sexual relationship. They sent each other explicit emails of asexual nature using the email accounts of their respective employers at the time. In numerous emails, they discussed and reviewed what occurred during their meetings. 31. Upon information and belief, during their meetings and communications, Stoner and Schuchart created a plan to solicit unlawfully other ATT employees for employment with Conn-Selmer. Upon information and belief, both Stoner and Schuchart went to great lengths to effectuate covertly their plan. 32. Upon information and belief, Stoner and Schuchart took measures to destroy evidence of their plan, including but not limited to email communications. 33. Upon information and belief, in or about June 2005, Stoner was responsible for negotiating with Schuchart concerning the terms of Cann-Selmer's offer of employment. 34. Upon information and belief, members of Steinway's board of directors were aware that Stoner solicited Schuchart for employment from ATT in violation of Stoner's Extended Non-Solicitation Agreement. Upon information and belief, imembers of Steinway's board of directors were involved in decisions regarding the compensation and benefits offered to Schuchart. 35. Upon information and belief, in or about June 2005, Dana Messina, a member of Steinway's board of directors and the Chief Executive Officer of Steinway, offered to assist Schuchart with any dispute she may have regarding her ATT stork, including paying her legal fees. 36. Upon information and belief, prior to and during the time Stoner solicited Schuchart for employment with Conn-Selmer, negotiated her terms of employment with Conn- Selmer, and hired her for employment with Conn-Selmer, Stoner and Schuchart were involved in an intimate, sexual relationship. 37. On or about July 18, 2005, Schuchart resigned her employment with ATT. Because Schuchart possessed significant institutional knowledge about ATT, ATT was significantly impaired both by the fact that she resigned and the timing of her resignation. As a result of Schuchart's resignation, ATT has incurred and will incur significant costs associated with recruiting a new Chief Financial Officer, including but not limited to recruiter fees, travel expenses, relocation costs, and additional compensation and benefits needed to recruit a new Chief Financial Officer. ATT has incurred and will also incur costs associated with conducting business without a Chief Financial Officer, the transition of responsibilities to a new Chief Financial Officer and the time and training needed to allow the new Chief Financial Officer to gain institutional knowledge. 38. Upon information and belief, in or about July, 2005, Schuchart commenced employment with Conn-Selmer as its Chief Financial Officer. Conn-Selmer, Steinway, Stoner, and Schuchart Solicit Other ATT Emplovees in Violation of the Non-Solicitation Agreements 39. From May through August 2005, Stoner also solicited for employment with Conn-Selmer at least five other ATT employees, including but not limited to Jennifer Allison, Brian Imel, Karen Richwine, Darlene Santacroce, and Bill Babbs. 40. Stoner also solicited Grant Henry, a former ATT employee, who had been employed during the twelve-month period immediately prior to the termination of Stoner's employment with ATT. Upon information and belief, as a result of Stoner's solicitation and/or influence, Grant Henry commenced employment with Conn-Selmer. 41. Upon information and belief, Stoner employed tactics to attempt to circumvent the obligations of Stoner's Extended Non-Solicitation Agreement as instructed by the members of Steinway's board of directors and/or Steinway's in-house counsel. 42. In an email to one ATT employee, Stoner explained that at a "board meeting . , . in Boston" he discussed his desire to recruit ATT employees for employment with Conn-Selmer and the impact of his non-solicitation obligation, Stoner further explained to the ATT employee that a "loophole" to his non-solicitation obligation existed if an ATT employee contacted him or was known to be looking for other employment. 43. From June 28, 2004 until July 18, 2007, Schuchart was prohibited, pursuant to Schuchart's Non-Solicitation Agreement, from directly or indirectly soliciting or 9 employing any ATT employees or certain former employees or otherwise adversely influencing or altering their relationships with ATT. 44. Upon information and belief, during her employment with ATT, Schuchart communicated and met with many of the ATT employees that Stoner was soliciting for employment, including but not limited to Brian Imel and Jennifer Allison, and encouraged them to join Conn-Selmer. Upon information and belief, Schuchart and Stoner conspired to use various measures to solicit covertly ATT employees for employment with Conn-Selmer. 45. Upon information and belief, in July and August 2005, Schuchart solicited several other employees for employment with Conn-Selmer and/or adversely influenced or altered their decision to continue employment with Conn-Selmer, including but not limited to Alan Tumblin and Michael Hutchinson. 46. Upon information and belief, during all times relevant to the instant action, members of Steinway's board of directors were aware that Stoner and Schuchart were soliciting current and former ATT employees for employment with Conn-Selmer and/or encouraging them to commence employment with Conn-Selmer in violation of the Non- Solicitation Agreements. 47. Upon information and belief, as a result of Stoner's and/or Schuchart's solicitation and/or influence, Brian Imel resigned his employment with ATT and commenced employment with Conn-Selmer. From January 22, 2001 until August 16, 2005, ATT or its predecessor employed Brian Imel. At the time of his resignation, Brian Imel served as ATT's Director of Marketing. 48. From August 31, 1987 to August 31, 2005, ATT employed Bobbi Imel. Upon information and belief, as a result of Brian Imel's employment with Conn-Selmer and 10 desire to move his current residence, his wife, Bobbi Imel, also resigned her employment with ATT. At the time of Bobbi Intel's resignation, she served as a Human Resources Manager. 49. As a result of the resignation of Brian and Bobbi Intel, ATT incurred costs associated with recruiting individuals to replace them, including but not limited to advertising costs and recruiter fees. 50. Upon information and belief, as a result of Schuchart's solicitation, influence and resignation from ATT, Michael Hutchinson resigned his employment with ATT. From January 20, 2003 until August 30, 2005, ATT employed Michael Hutchinson. At the time of Michael Hutchinson's resignation, he served as ATT's Operations Controller. As a result of the resignation of Michael Hutchinson, ATT incurred costs associated with recruiting his replacement. Schuchart's Disloyalty During Her Employment with ATT 51. Upon information and belief, during her employment at ATT and during business time and/or using ATT's equipment, Schuchart worked with Conn-Selmer, Steinway's assistant general counsel, John Dudek, and Stoner to set up an international venture for Conn- Selmer. 52. Upon information and belief, Conn-Selmer, Steinway, and Stoner assisted and encouraged Schuchart's work for Conn-Selmer while she was still an employee of ATT. Irreparable Harm and Relief 53. As a result of Stoner's and Schuchart's breaches of the Non-Solicitation Agreements, ATT has suffered, are suffering, and wilt continue to suffer, irreparable damage to ATT's business, business relationships, and reputation for which ATT has no adequate remedy at law 11 54. Upon information and belief, unless enjoined from doing so, Stoner and Schuchart will continue to solicit ATT employees and/or adversely impact their employment with ATT. 55. In the Non-Solicitation Agreements, Stoner and Schuchart acknowledged and agreed that: the agreements and covenants ... are reasonable and necessary for the protection of [ATT's] business interests, that irreparable injury will result to [ATT] if [Stoner or Schuchart] breach[] any of the terms of said covenants, and that in the event of [their] actual or threatened breach of any such covenants, [ATT] will have no adequate remedy at law. [They] accordingly agree[] that, in the event of any actual or threatened breach by [them] of any of said covenants, [ATT] will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and within the necessity of showing actual money damages. Nothing in [the provision] will be construed as prohibiting [ATT] from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 56. Stoner and Schuchart also agreed in the Employment Agreements that: [i]f either party prevails in a legal action to enforce or protect its rights under this Employment Agreement, then that party shall be entitled to recover reasonable attorneys' fees, costs, and expenses, in addition to all other relief, including but not limited to damages and injunctive relief. AS AND FOR A FIRST CAUSE OF ACTION BREACH OF CONTRACT (against Stoner) 57. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 56 of this Complaint with the same force and effect as if set forth at length herein. 58. In connection with his employment and the separation therefrom, Stoner executed Stoner's Employment Agreement, Non-Solicitation Agreement, Separation Agreement, 12 and Non-Solicitation Extension Agreement, valid written contracts under which he was prohibited from soliciting or employing any ATT employees or certain former employees or otherwise adversely influencing or altering their relationships with ATT until August 24, 2005. 59. Stoner breached his contractual obligation to ATT by soliciting ATT employees and a former employee for employment with Conn-Selmer and/or adversely influencing or altering their relationship with ATT. 60. Stoner breached and is currently in breach of his contractual obligations to ATT by hiring and employing Schuchart, Brian Imel, and Grant Henry. 61. ATT has performed all obligations imposed upon it by the terms of the Stoner's Employment Agreement, Non-Solicitation Agreement, Separation Agreement, and Non- Solicitation Extension Agreement. 62. ATT has suffered damages as a result of Stoner's breach of contract. AS AND FOR A SECOND CAUSE OF ACTION BREACH OF CONTRACT (againstSchuchart) 63. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 62 of this Complaint with the same force and effect as if set forth at length herein. 64. In consideration of her employment with ATT, Schuchart executed Schuchart's Employment Agreement and Non-Solicitation Agreement, valid written contracts under which she was prohibited from soliciting or employing any ATT employees or certain former employees or otherwise adversely influencing or altering their relationships with ATT. 13 65, Schuchart has breached her contractual obligations to ATT by soliciting ATT employees for employment with Conn-Selmer and/or adversely influencing or altering their relationships with ATT. 66. Schuchart breached and is currently in breach of her contractual obligations to ATT by hiring and employing Brian Intel. 67. ATT has performed all obligations imposed upon it by the terms of Schuchart's Employment Agreement and Non-Solicitation Agreement. 68. ATT has suffered damages as a result of Schuchart's breach of contract. AS AND FOR A THIRD CAUSE OF ACTION INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS (against Conn-Selmer, Steinway, and Stoner) 69. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 68 of this Complaint with the same force and effect as if set forth at length herein. 70. ATT and Schuchart were parties to Schuchart's Employment Agreement and Non-Solicitation Agreement. Upon information and belief, Conn-Selmer, Steinway, and Stoner were aware that these agreements were in effect and further knew the obligations of Schuchart contained therein. 71. Upon information and belief, Conn-Selmer, Steinway, and Stoner intentionally, improperly and without privilege or justification interfered with Schuchart's performance of these agreements by inducing Schuchart to terminate her contractual relationship with ATT under Schuchart's Employment Agreement and to breach her obligations to ATT under Schuchart's Non-Solicitation Agreement. 14 72. Upon information and belief, Conn-Selmer's, Steinway's, and Stoner's actions were specifically intended to harm the contractual relationships between Schuchart and ATT 73. As a result of the foregoing, ATT has suffered damages. 74. Conn-Selmer's, Steinway's, and Stoner's conduct, as described above, was willful, wanton, malicious, and in reckless disregard of Schuchart's contractual obligations to ATT entitling ATT to an award of punitive damages in an amount to be determined at trial. AS AND FOR A FOURTH CAUSE OF ACTION INTENTIONAL INTERFERENCE WITH CONTRACTUAL RELATIONS (against Conn-Selmer and Steinway) 75. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 74 of this Complaint with the same force and effect as if set forth at length herein. 76. ATT and Stoner were parties to Stoner's Extended Non-Solicitation Agreement. Upon information and belief, Conn-Selmer and Steinway were aware that the agreements were still in effect and further knew the obligations of Stoner contained therein. 77. Upon information and belief, Conn-Selmer and Steinway intentionally, improperly and without privilege or justification interfered with Stoner's performance of his obligations under Stoner's Extended Non-Solicitation Agreement, by inducing Stoner to breach his obligations to ATT thereunder. 78. Upon information and belief, Conn-Selmer's and Steinway's actions were specifically intended to harm this contractual relationship between Stoner and ATT. 79. As a result of the foregoing, ATT has suffered damages. 15 80. Conn-Selmer's and Steinway's conduct, as described above, was willful, wanton, malicious, and in reckless disregard of Stoner's contractual obligations to ATT entitling ATT to an award of punitive damages in an amount to be determined at trial. AS AND FOR A FIFTH CAUSE OF ACTION TORTIOUS INTERFERENCE WITH EMPLOYER'S BUSINESS (against Conn-Selmer, Steinway, Stoner, and Schuchart) 81. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 80 of this Complaint with the same force and effect as if set forth at length herein. 82. Upon information and belief, Conn-Selmer, Steinway, Stoner, and Schuchart systematically solicited and induced ATT employees to leave their employment with ATT and become employed with Conn-Selmer. 83. Upon information and belief, the purpose of the solicitation, inducement and hiring of certain employees was to harm the business of ATT. 84. As a result of the foregoing, ATT has suffered damages. 85. Conn-Selmer's, Steinway's, Stoner's, and Schuchart's conduct, as described above, was willful, wanton, malicious, and reckless entitling ATT to an award of punitive damages in an amount to be determined at trial. AS AND FOR A SIXTH CAUSE OF ACTION BREACH OF FIDUCIARY DUTY (against Schuchart) 86. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 85 of this Complaint with the same force and effect as if set forth at length herein. 16 87. ATT instilled trust and confidence in Schuchart during her employment with ATT. 88. As an employee of ATT, Schuchart owed ATT a fiduciary duty of undivided loyalty and good faith. 89. Upon information and belief, while Schuchart was still employed by ATT, Schuchart knowingly and willfully breached her fiduciary duty to ATT by encouraging several important ATT employees to join Conn-Selmer and performing services for Conn- Selmer during her business time. 90. As a result of Schuchart's breach of her duty of loyalty, ATT has suffered damages, in an amount to be determined at trial, including, but not limited to, the amount in salary and benefits that ATT paid to Schuchart during the period in which she was disloyal and wrongfully engaged in conduct that was contrary to ATT's legitimate business interests. 91. Schuchart's conduct, as fully described above, was willful, wanton, malicious, and in reckless disregard for her contractual and common law duties to ATT entitling ATT to an award of punitive damages in an amount to be determined at trial. AS AND FOR A SEVENTH CAUSE OF ACTION AIDING AND ABETTING BREACH OF FIDUCIARY DUTY (against Conn-Selmer, Steinway, and Stoner) 92. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 91 of this Complaint with the same force and effect as if set forth at length herein. 93. Schuchart breached her fiduciary duty of loyalty and good faith to ATT. 94. Upon information and belief, Conn-Selmer, Steinway, and Stoner knew of the fiduciary duty of loyalty and good faith owed by Schuchart to ATT. 17 95. Upon information and belief, Conn-Selmer, Steinway, and Stoner knowingly and willfully participated in, encourages, induced, and/or substantially assisted Schuchart's breach of her fiduciary duty of loyalty and good faith to ATT. 96. As a result of the foregoing, ATT has suffered significant damages. 97. Conn-Selmer's, Steinway's, and Stoner's conduct, as fully described above, was willful, wanton, malicious, and in reckless disregard for Schuchart's contractual and common law duties to ATT entitling ATT to an award of punitive damages in an amount to be determined at trial. AS AND FOR A EIGHTH CAUSE OF ACTION CONSPIRACY TORT (against Conn-Selmer, Steinway, Stoner, and Schuchart) 98. Plaintiff repeats and realleges each and every allegation contained in paragraphs 1 through 97 of this Complaint with the same force and effect as if set forth at length herein. 99. Upon information and belief, Conn-Selmer, Steinway, Stoner, and Schuchart jointly sought to solicit and employ ATT employees and certain former employees in blatant violation of the Non-Solicitation Agreements. 100. Upon information and belief, Conn-Selmer, Steinway, Stoner, and Schuchart affirmatively acted in furtherance of this purpose. 101. As a result of the foregoing, ATT has suffered damages. 102. Conn-Selmer's, Steinway's, Stoner's, and Schuchart's conduct, as fully described above, was willful, wanton, malicious, and reckless entitling ATT to an award of punitive damages in an amount to be determined at trial. 19 AS AND FOR A NINTH CAUSE OF ACTION INJUNCTIVE RELIEF (against Conn-Selmer, Steinway, Stoner and Schuchart) 103. Plaintiff repeats and realleges each and every allegation contained in paragraphs I through 102 of this Complaint with the same force and effect as if set forth at length herein. 104. Upon information and belief, Conn-Selmer, Steinway, Stoner, and Schuchart have and will continue to solicit and employ ATT employees and otherwise adversely influence or alter the employment relationships of ATT employees with ATT. 105. By reason of the foregoing, ATT is entitled to an injunction enjoining Conn-Selmer, Steinway, Stoner, and Schuchart from employing, engaging or explicitly soliciting any employees of ATT or its affiliates, or individuals employed by ATT during the twelve months prior to Stoner's or Schuchart's termination of employment, or otherwise adversely influencing or altering the employment relationships of employees of ATT and its affiliates with ATT and its affiliates. WHEREFORE, plaintiff demands judgment against defendants as follows: A. issuing a permanent injunction enjoining defendant Stoner for a period equal to the duration of the period in which he was in breach of Stoner's Extended Non- Solicitation Agreement from directly or indirectly (whether as an owner-, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity, employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of defendant Stoner's employment with ATT or any of its affiliates for any reason, 19 an employee of ATT or any of its affiliates or otherwise seek to adversely influence or alter such individual's relationship with ATT or any of its affiliates; B. issuing a permanent injunction enjoining defendant Schuchart for a period equal to two years extended by the period in which she was in breach of Schuchart's Non- Solicitation Agreement from directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity, employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of defendant Schuchart's employment with ATT or any of its affiliates for any reason, an employee of ATT or any of its affiliates or otherwise seek to adversely influence or alter such individual's relationship with ATT or any of its affiliates; C. issuing a permanent injunction enjoining defendants Conn-Selmer and Steinway for a period equal to the longer of the duration of the period in which defendant Stoner or defendant Schuchart are bound by a non-solicitation obligation from directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity, employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve- month period immediately prior to the termination of defendant Stoner's or defendant Schuchart's employment with ATT or any of its affiliates for any reason, an employee of ATT or any of its affiliates or otherwise seek to adversely influence or alter such individual's relationship with ATT or any of its affiliates; D. requiring the return to ATT of the $155,000 paid to defendant Stoner in connection with his execution of the Non-Solicitation Extension Agreement and the $260,000 20 plus certain benefit costs paid to or on behalf of defendant Stoner in connection with the Separation Agreement; E. requiring the return to ATT of the compensation and benefits paid to defendant Schuchart during her period of disloyalty to ATT; F. awarding to ATT the damages associated with the resignation and replacement of defendant Schuchart, Brian and Bobbi Imel, and Michael Hutchinson; G. awarding to ATT such other damages as it shall prove at trial against Defendants; H. awarding to ATT punitive damages against each defendant in an amount to be determined at trial; awarding to ATT the costs and expenses, including attorneys' fees, incurred in connection with their violation of defendant Stoner's and defendant Schuchart's contractual obligations to ATT and its affiliates and in connection with this action; and granting to ATT such other and further relief as the Court shall deem just and proper. 21 ATT demands a trial by jury on all claims other than its claim for injunctive relief. Respectfully submitted, ( a.-E'J Mi el L. Banks (I.D. No. 350 Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-538715495 (215) 963-5001 (facsimile) OF COUNSEL: Ronald E. Richman Heather Weine Brochin (pro hac vice to be filed) SCHULTE ROTH & ZAiBEL LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 Attorneys for Plaintiff Dated: December 22, 2005 Ames True Temper, Inc. 22 ???i? 1 ?? 101Z DRAFT: February 21, 2002 AMENDED AND RESTATED EMPLOYMENT AGREEMENT J This AMENDED AND RESTATED 401-MENT AGREEMENT (this "Employment Agreement) is made this _ day of February, 2002 by and between Ames True Temper, Inc,, a Delaware corporation (the "Company"), and JOHN M STONER, JP_ ("Eaeeutive'?. WHEREAS, the Company and its: subsidiaries are engaged in the business of (i) manufacturing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, and decorative accessories for the lawn and garden, and (ii) conducting such other activities as are undertaken from time to time by the Company, its parent, ATT Holding Co., a Delaware corporation ("Parent"), and each of their subsidiaries as a result of future acquisitions, or otherwise (collectively, the "Business'); WHEREAS, Executive entered into that certain Employment Agreement dated as of June 1, 2000 (the "Old Employment Agreement's with True Temper Hardware Company, a Delaware corporation ("True Temper"); WITEREAS, on October 1, 2000, True Temper merged with and into the Company, and in connection therewith, among other things, the Company changed its name to "Ames True Temper, Inc." and succeeded to all of the rights and obligations of True Temper under the Old Employment Agreement; WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, as the President of the Company, in accordance with the tests and conditions set forth herein; and WHEREAS, the Company and Executive each desire that the Old Employment Agreement be amended and restated in its entirety as set forth in this Employment Agreement and that this Employment Agreement supercede the Old Employment Agreement, and all other agreements with respect to the subject matter hereof, other than that certain Incentive Award Agreement dated as of July 19, 2001 between the Company and Executive (the "Incentive Award Agreement"), which Incentive Aware Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement; and WHEREAS, in partial consideration for Executive's agreement to amend and restate the Old Employment Agreement as set forth herein, Executive will be entitled to purchase 30,000 shares of Class A Common Stock, par value $0.0001 per share of Parent ("Class A Common Stock', at a purchase price of $1.00 per share (the "Executive Shares', which Executive Shares shall be purchased by Executive pursuant to that certain senior management agreement to be entered into between Parent and the Executive (the "Management Agreement'D, 1 Doe 0:CH102(87309-00015)60029856v6;072J200 me:15:13 - NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises in this Employment Agreement, the parties, intending to be legally bound, hereby agree as follows: 1. Emplovment. The Company hereby agrees to employ Executive as President of the Company, and Executive hereby agrees to accept such employment and agrees to act as President of the Company, all in accordance with the terms and conditions of this Employment Agreement. Executive hereby represents and warrants that neither Executive's entry into this Employment Agreement nor Executive's performance of Executive's obligations hereunder will conflict with or result in a breach of the terns, conditions or provisions of any other agreement or obligation of any nature to which Executive is a party or by which Executive is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement entered into by Executive. 2. Term of Employment and Automatic Renewal. The term of Executive's employment under this Employment Agreement will commence on the date of this Employment Agreement and will continue until the third (3rd) anniversary of the date of this Employment Agreement (the "Initial Employment Period"). THE INITIAL EMPLOYMXNT PERIOD AND ANY RENEWAL EMPLOYIN ENT PERIOD (AS DEFINED HEREIN) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON THE, SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (EACH, A "RENEWAL EMPLOYMENT PERIOD"), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT PERIOD, AS THE CASE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial Employment Period and the Renewal Employment Periods are hereinafter referred to as the "Employment Period" For purposes of this Employment Agreement, any notice of termination electing not to renew this Employment Agreement pursuant to this Section 2 shall be deemed: (1) a termination without Due Cause pursuant to Section 11(d) if such notice is delivered by the Company; or (ii) a voluntary resignation without Good Reason pursuant to Section 11(e) if such notice is delivered by Executive. Notwithstanding anything to the contrary contained herein, the Employment Period is subject to termination pursuant to Section 11 below. 3. Position and Responsibilities. Executive shall report to and be subject to the direction of the Chief Executive Officer of the Company. Executive shall perform and discharge such duties and responsibilities for the Company as the Chief Executive Officer may from time to time reasonably assign Executive. Executive understands and acknowledges that such duties shall be subject to revision and modification by the Board upon reasonable notice to Executive. During the Employment Period, Executive shall devote Executive's full business time, attention, skill and efforts to the faithful performance of Executive's duties herein, and shall perform the duties and carry out the responsibilities assigned to Executive, to the best of Executive's ability, in a diligent, trustworthy and businesslike manner for the purpose of advancing the Company. Executive acknowledges that Executive's duties and responsibilities will require Executive's full-time business efforts and agrees that during the Employment Period, Executive will not Doc k:CMo2 (BT709dW IS) 60039E56.bOr1S?200T17'une:15:17 engage in any outside business activities that conflict with his obligations under this Employment Agreement. 4. Com ensatioq. (a) Base. Salary. During the EmploymFnt Period, the Company shall pay to Executive a minimum base salary at the rate of'S260,g Q per year (the "Base Salary"), less applicable tax withholding, subject to increase from t le to time, solely at the Company's discretion, payable at the Company's regular employee payroll intervals. Executive's performance shall be reviewed annually and the Base Salary may be increased at the Company's sole discretion. (b) Discretionary Bonus. During the Employment Period, Executive shall be eligible to receive a cash bonus based upon the achievement of certain budgeted performance goals pursuant to a program approved by the Board of Directors of the Company (the "Board") and substantially similar to that set forth on Exhibit A attached hereto (the "Performance Bonus"). Executive shall also be eligible to receive additional bonuses, in such amounts, if any, as determined by the Board in its sole discretion based upon the achievement of performance goals and objectives approved by the Board. .i (c) Stock Pursuant to the Management Agreement, Executive will purchase the Executive Shares, which Executive Shares shall be subject to certain vesting, repurchase and other obligations and restrictions set forth in the Management Agreement and in that certain stockholders agreement (the "Stockholders Agreement D previously entered into among Parent, the Investors (as defined therein) and certain other shareholders of Parent, which Executive shall join as a patty by executing a joinder thereto in form and substance satisfactory to the Company. In addition, pursuant to that certain stock purchase agreement (the "Stock Purchase Agreemene) previously entered into among Parent, the Investors (as defined therein) and certain other executives of the Company, which Executive shall join as a patty by executing a joinder thereto in form and substance satisfactory to the Company, Executive will purchase certain additional shares of Class A Common Stock and certain shares of Series A Preferred Stock, par value $0.0001 per share, of Parent (collectively, the "Coinvest Shares"), which Coinvest Shares shall be subject to certain repurchase and other obligations and restrictions set forth in the Management Agreement and in the Stockholders Agreement. 5. Benefit Plans. During the Employment Period, Executive will be entitled to receive traditional employment benefits comparable to those provided to other senior executive officers of the Company (subject to any applicable waiting periods, eligibility requitcments, or other restrictions), which may include insurance (medical, dental, life, disability, directors and officers, etc.), retirement plans, and profit sharing plans. 6. Ea eases. The Company, in accordance with policies and practices established by the Board from time to time, will pay or reimburse Executive for all expenses (including travel and cell phone expenses) reasonably incurred by Executive during the Employment Period in connection with the performance of Executive's duties under this Employment Agreement, Da O:CM02 (37309-0001 S) W929d36 :CM2t2OOYn+ax15:13 provided that Executive shall provide to the Company documentation or evidence of expenses for which Executive seeks reimbtusement in accordance with the policies and procedures established by the Board from time to time. 7. Vacation. Executive shall be entitled to vacation at the rate of four (4) weeks per year in accordance with the Company's vacation policy. Executive shall make good faith efforts to schedule vacations so as to least conflict with the conduct of the Company's business and will give the Company adequate advance notice of Executive's planned absences. Up to one-half (1/2) of Executive's unused vacation time may be carried over to subsequent years; r vided however that in no event shall Executive be entitled to greater than six (6) weeks vacation per year. 8. Confidentiality, Inventions and Non-Solicitation Agreement. On the date hereof, Executive shall execute a confldeatiality, inventions and non-solicitation agreement, in the form of Exhibit B attached hereto and made a part hereof (the "Confidentiality, Inventions and Non-Solicitation AgreemenfD, 9. Restrietive Covenants. (a) Executive's Acknowledgment. Executive acknowledges that; (1) Parent and the Company are and will be engaged in the Business during the Employment Period and thereafter, (ii) Parent and the Company are and will be actively engaged in the Business throughout the world; (iii) Executive is one of a limited number of persons who will be developing the Business; (iv) Executive will occupy a position of trust and confidence with the Company after the date of this Employment Agreement and during the Employment Period Executive will become familiar with Parent's and the Company's (and their subsidiaries') trade secrets and with other proprietary and confidential information concerning Parent and the Company (and their subsidiaries and portfolio companies) and the Business (and the business of their subsidiaries and portfolio companies); (v) the agreements and covenants contained in this Section 9 are essential to protect Parent, the Company and the goodwill of the Business and are a condition precedent to the Company entering into this Employment Agreement; (vi) Executive's employment with the Company has special, unique and extraordinary value to the Company and Parent and the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Employment Agreement; and (vu) Executive has means to support Executive and Executive's dependents other than by engaging in the Business, and the provisions of this Section 9 will not impair such ability. (b) Restrictions. Executive will not, during the Restricted Period (as defined below), anywhere in the world (the "Restricted Territory"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) own, operate, manage, control, invest in, perform services for, or engage or participate in any manner in, or render services to (alone or in association with any person or entity) or otherwise assist any person or entity that engages in, or owns, invests in, operates, manages or controls any venture or enterprise that engages in, the Business. 4 Dm ,;craoz(87)09MIS)60079ess.6Ovt7no0YI-I c:ts,ta The term "Restricted Period" means the period of time from the date of this Employment Agreement until two (2) years after the termination for any reason of Executive's employment relationship with the Company or any successor thereto (whether pursuant to a written agreement or otherwise, including any Renewal Employment Period under this Employment Agreement). The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of Section 9. Nothing contained in Section 9(b) above shall be construed to prevent Executive from investing in the stock of any competing cq' oration listed on a national securities exchange or traded in the over-the-counter market, but only if Executive is not involved in the business of said corporation and if Executive and Executive's associates (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of one percent (1%) of the stock of such corporation. (c) Scoae/Severability. The parties acknowledge that the business of Parent and the Company is and will be national and international in scope and thus the covenants in this Section 9 would be ineffective if the covenants were to be limited to a particular geographic area. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy, or the Restricted Territory unreasonably extensive, of any of the covenants set forth in this Section 9 not fully enforceable, the other provisions of this Section 9, and this Employment Agreement in general, will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Employment Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Period be deemed to be the longest period permissible by law, but not in excess of the length provided for in Section 9(b), and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances but not in excess of the territory provided for in Section 9(b)). 10. Equitable Remedies. Executive acknowledges and agrees that.the agreements and covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. I1. Termination, (a) Death. The Employment Period will terminate immediately upon the death of Executive. If the Emplovment Period is terminated pursuant to this Section 11(a), the Company shall have no further obligation to Executive (or his estate) except for salary and Dx &GH202 (97309-0001.`) 60029956v6:07l2WDOVriM:15:(3 benefits accrued through the date of termination, and except as otherwise described in Section, 4(e) of this Employment Agreement, (b) Due Cause. The Company may terminate the Employment Period immediately upon written notice to Executive for a material breach of this Employment Agreement by Executive. The following events will be deemed a material breach of this Employment Agreement (each of which shall constitute "If µe Cause"): (i) Executive's material breach of any of Executive's obligations under the Confidentiality, Inventions and Non-Solicitation Agreement, this Employment Agreement, the Stock Purchase Agreement, the Management Agreement or the Stockholders Agreement; or (u) Executive's continued and deliberate neglect of, willful misconduct in connection with the performance of, or refusal to perform Executive's duties in accordance with Section 3 of this Employment Agreement, which, in the case of neglect or failure to perform., has not been cured within thirty (30) days after Executive has been. provided notice of the same; or (iii) Executive's `,engagement in any conduct which injures the integrity, character or 'reputation of the Company or which impugns Executive's own integrity, character or reputation so as to came Executive to be unfit to act in the capacity of President of the Company; or (iv) the Board's good faith determination that Executive has committed an act or acts constituting a felony, or other act involving dishonesty, disloyalty or fraud against the Company. If the Employment Period is terminated pursuant to this Section I1(b), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(q) of this Employment Agreement. (c) Permanent Disability. The Company may terminate the Employment Period upon the Permanent Disability (as defined below) of the Executive. If the Employment Period is terminated pursuant to this Section 11(e), then Executive will be entitled to receive his salary and benefits accrued through the date of termination and such benefits, if any, as may be provided Executive pursuant to the Company's disability insurance policy with ReliaStar. Except as set forth in the immediately preceding sentence and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section 11(c), the Company shall have no further obligation to Executive. For purposes of this Employment Agreement, the term "Permanent Disability" shall mean that Executive is unable to perform, with or without reasonable accommodation, by reason of physical or mental incapacity, the essential functions of his or her position for ninety (90) or more days in any one hundred twenty (120) day period. The Board shall determine, according to the facts then available, whether and 6 Doc x;c'?aoa csr3os.ooots? eonssss.s:ovzartaoarr?„??:?s: u when a Permanent Disability has occurred, Such determination shall not be arbitrary or unreasonable. (d) Termination by the Companv without Due Cause. The Company may terminate the Employment Period without Cause upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 11(d), then Executive will be entitled to receive as severance pay his Base Salary, , plug1+ benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. Except as set forth in the first sentence of this Section 11(d) and as otherwise described in Section 4(c) of this Employment Agreement, if the Employmeut Period is terminated pursuant to this Section 11(d), the Company shall have no £tuther obligation to Executive, (e) Voluntarl Resignation by Executive. Executive may terminate the Employment Period at any time for any reason upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 11(e), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement; providedhowever. that if Executive is terminating the Employment Period for Good Reason (as defined below), then Executive will'be entitled to receive as severance pay his Base Salary plus benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. The following events will be deemed "Good Reason" for which Executive may terminate the Employment Period and receive the severance payments set forth in this Section 11(e): (i) a material diminution of the Executive's responsibilities after notice to the Company and a thirty (30) day opportunity to cure; or (ii) any material breach of this Employment Agreement on the part of the Company (including, but not limited to, any decrease in the Base Salary without the consent of the Executive, or relocation of Executive's place of employment to a location that is greater than fifty (50) miles from the Harrisburg, Pennsylvania metropolitan area), after notice to the Board, and a thirty (30) day opportunity to cure; rovide however; that Executive is not in material breach of any of the terms of this Employment Agreement. (f) General Release. The receipt of any payment as set forth in Seetioas 11(c)•(e) above shall be contingent upon Executive's execution of a general release of all claims against the Company and its Affiliates (as defined below), substantially in the form attached hereto as Exhibit C. For purposes of this Employment Agreement, the term "AiRlistes" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly or indirectly, through one or 1 C1pc L`.C1ROT gTjm-M15)606?9656v6;62n2lWYrime 15:13 more intermediaries, controls, is controlled by, or is under cot mon control with, the Company including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 1404 of the Code. (g) M19 eation. Notwithstanding anything herein to the contrary, to the extent Executive obtains employment during the first six (6) `(months of tlne severance period, the Company's severance obligations under this Employ eat Agreement, including, without limitation, the continuation of Executive's benefits heret?der, shall cease upon the first day of the seventh (7th) month of the severance period. Executive agrees that if Executive accepts other employment during the first six (6) months of the severance period, Executive shall notify the Company in writing within two (2) business days of such acceptance. Executive acknowledges that his failure to abide by this provision shall entitle the Company to recoup all severance pay previously paid to Executive pursuant to this Employment Agreement. (h) Survival. 'termination of the Employment Period in accordance with this Section 11, or expiration of the Employment Period, will not affect the provisions of this Employment Agreement that survive such termination, including, without limitation, the provisions in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, and will not limit either party's ability to pursue remedies at law or equity. 12. Attorney's Fees. If either party prevails in a legal action to enforce or protect its rights under this Employment Agreement, then that party shall be entitled, to recover reasonable attorneys' fees, costs, and expenses, in addition to all other relief, including but not limited to damages and injunctive relief. U. Executive Assistance. Both during and after Executive's employment with the Company, Executive shall, upon reasonable notice, famish the Company with such information as may be in Executive's possession or control, and cooperate with the Company, as the Company may reasonably request (with due consideration to Executive's business activities and obligations after the Employment Period), in connection with any litigation, claim, or other dispute in which the Company or any of its Affiliates is or may become a'party. The Company shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in fulfilling Executive's obligations under this Section 13. 14. Effect of Prior Agreements. This Employment Agreement, the Management Agreement, the Stockholders Agreement, the Stock Purchase Agreement and the Confidentiality, Inventions and Non-Solicitation Agreement contain the entire understanding between Parent, the Company and Executive relating to the subject matter hereof and supersede any prior employment agreement between Executive, Parent and the Company, including, without limitation, the Old Employment Agreement, or other agreement relating to the subject matter hereof between Parent, the Company and Executive, other than the Incentive Award Agreement, which Incentive Award Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement. 8 Ax tl'CHI02 (81309.00015) 60029856.6:0721/200YI'ime:15:13 15. Modification and Waiver. This Employment Agreement may not be modified or amended, nor may any provisions of this Employment Agreement be waived, except by an instrument in writing signed by the parties. No written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the, specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 16. Severability. If, for any reason, any provision of this Employment Agreement is held invalid, such invalidity will not affect any other provision of this Employment Agreement, and each provision will to the full extent consistent with law continue in full force and effect, If any provision of this Employment Agreement is held invalid in part, such invalidity will in no way affect the rest of such provision, and the rest of such provision, together with all other provisions of this Employment Agreement, will, to the full extent consistent with law, continue in full force and effect. 17. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Employment Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by' U'S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day.atter deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312)9,02-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 9 Dm *C14102 (8730940015) 6002985M;02=0D2Mm 15:0 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 17. 18. Third Party Beneflciaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any perso or entity, other than the parties to this Employment Agreement and their respective pezmitt%successors and .assigns, any rights or remedies under or by reason of this Employment Agreement. 19. Headings. The headings and other captions in this Employment Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Employment Agreement. 20. Governing Law; Arbitration. This Employment Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. Except for disputes arising out of an alleged violation of the Restrictive Covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. The arbitration process shall be instigated by either party giving written notice to the other of the desire for arbitration and the factual allegations underlying the basis for the dispute. The arbitration shall be conducted by such alternative dispute resolution service as is agreed to by the parties, or, failing such agreement within thirty (30) days after such dispute arises, by arbitrators selected as described below in accordance with the rules and procedures established by the American Arbitration Association. Only a person who is a practicing lawyer admitted to a state bar may serve as an arbitrator. Each party shall select one arbitrator, and those arbitrators shall choose a third arbitrator; these arbitrators shall constitute the panel. The American Arbitration Association rules for employment arbitration shall control any discovery conducted in connection with the arbitration. The expenses of arbitration (other than attorneys' fees) shall be shared as determined by arbitration. Each side to the claim or controversy shall pay their own attorneys' fees. Any result reached by the panel shall be binding on all parties to the arbitration, and no appeal may be taken. It is agreed that any party to any award rendered in such arbitration proceeding may seek a judgment upon the award and that judgment may be entered thereon by any court having jurisdiction. The arbitration shall be conducted in the Commonwealth of Pennsylvania. 21. Non-AssigRabilitv/Binding Effect. This Employment Agreement shall not be assignable by either patty without the prior written consent of the other party. This Employment Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. 22. No Strict Construction. The language used in this Employment Agreement will be deemed to he the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. 10 Doe e;CHI03 (87309.00015) 69929E56v6;0712LS0U1lriroe: 15:19 [Remainder of Page Intentionally Blank; Signature Page to Follow] 1 1111 1 V 1 II Doc *CFD02 (87309-00015) 60029856v6-,OMM00 VTh=15:13 1?1 IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be executed by its duly authorized officer and Executive has signed this Employment Agreement, as of the date fast above written. AMES TRUE TEMPER, INC. By: Its; EXECUTIVE john . Ston , Jr. / 12 Doc »:CHIU1 (87304-00x13) 60029856v6;07J2Y200?Jfimc:13:13 LKMrr A PERFORMANCE BONUS January' 02-September '02 BUDGET ti`s Percentage of Budget Percentage of Salary 90%44.9% 10% 95%-99.9% 20% 100% 40% 120% 70% x40%o 100% Payment starts at 90% of Budget, iP oanauce of 90%-94.9% pays as indicated - no graduation Performance of 95%-99.9% pays as indicated - no graduation. Performance of 100% of Budget pays as indicated and is graduated at straight line at the rate of a 1% increase yielding 1.5 % of Base Salary. The above calculations will be conducted for each (A) EBIMA and (B) FCF, The EBIMA calculation will be factored by x 66.7'/. The FCF calculation will be factored by x 33.3%. With regard to subsequent years incremental bonus as a percent of incremental EBITDA will be no more than 15% in Year 2 and 10% in Year 3 and beyond. A-1 Ckc H.CHI02 (8'1309-00°1?6°°29E56?6;°I/lYL°°7/C4oc13: iJ U MIT B CONFrDKMALrfY, INVENTIONS AMD NON-SOLICITA'T'ION AGREEMENT In consideration of employment by Ames True T4 per, Inc., a Delaware corporation, its successors or assigns (the "Coarpany") of Jahn M. Ston r, Jr. ("Executive'D, it is understood and agreed as follows: Confidential Information. (a) Executive acknowledges that the Confidential Information (as defined below) constitutes a protectible business interest of the Company and its parent, ATT Holding Co., a Delaware corporation ("Parent"), and covenants and agrees that at all times during the period of Executive's employment, and at all times after termination of such employment, Executive will not, directly or indirectly, disclose, furnish, make available or utilize any Confidential Information other than in the course of performing duties as an employee of the Company. Executive will abide by Company policies and miles as may be established from time to time by it for the protection of its Confidential Information. Executive agrees that in the course of employment with the Company Executive will not bring to the Company's offices nor use, disclose to the Company, or induce the Company to use, any confidential information or documents belonging to others. Executive's obligations under this Section la with respect to particular Confidential Information will survive expiration or termination of this Confidentiality, Inventions and Non-Solicitation Agreement (this "Agreement', and Executive's employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes generally known to the public other than through a breach of Executive's obligations under this Agreement (b) As used in this Agreement, the term "Confidential Informlation" means any and all confidential, proprietary or trade secret information, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is conceived or developed by Executive, applicable to or in any way related to: (i) the present or future business of Parent, the Company or any of their Affiliates (as defined below); (ii) the research and developmew of Parent, the Company or any of their Affiliates; or (iii) the business of any client or vendor of Parent, the Company or any of their Affiliates. Such Confidential information includes the following property or information of Parent, the Company and their Affiliates, by way of example and without limitation, trade secrets, processes, formulas, data, program documentation, customer lists, designs, drawings, algorithms, source code, object code, know-how, improvements, inventions, licenses, techniques, all plans or strategies for marketing, development and pricing, business plans, financial statements, profit margins and all information concerning existing or potential clients, suppliers or B•I Doe N!CMD2 (873MOW 15) 6DD79856v6;02/=ODNr1me M13 vendors. Confidential Information of Parent and the Company also means all similar information disclosed to Parent or the Company by third parties which is subject to confidentiality obligations. The term "Affiliates" means (i) all persons or entities controlling, controlled by or under common control with, Parent and/or the Company, (ii) all companies or entities in which Parent or the Company own an equity interest and (iii) all predecessor, successors and assigns of the those Affiliates identified in (i) and (ii). 2. Return of Materials. Upon termination of employment with the Company,' and regardless of the reason for such termination, Executive will leave with, or promptly return to, the Company all documents, records, notebooks, magnetic tapes, disks or other materials, including all copies, in Executive's possession or control which contain Confidential Information or any other information concerning Parent, the Company, any of their Affiliates or any of their respective products, services or clients, whether prepared by the Executive or others. Notwithstanding the foregoing, Executive shall be entitled to retain his personal effects provided any Confidential Information is removed therefrom. 3. Inventions as Sole Property of the Company. (a) Executive covenants ;and agrees that all Inventions (as defined below) shall be the sole and exclusive property of the Company. (b) As used in this Agreement, the term "Inventions" means any and all inventions, developments, discoveries, improvements, works of authorship, concepts or ideas, or expressions thereof, whether or not subject to patents, copyright, trademark, trade secret protection or other. intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice, conceived or developed by Executive while employed with the Company or within one (1) year following termination of such employment which relate to or result from the actual or anticipated business, work, research or investigatiou of Parent, the Company or any of their Affiliates or which are suggested. by or result from any task assigned to or performed by Executive for Parent the Company or any of their Affiliates. (c) Executive acknowledges that all original works of authorship which are made by him or her (solely or jointly) are works made for hire under the United States Copyright Act (17 U.S.C., et seq.). (d) Executive agrees to promptly disclose to the Company all Inventions, all original works of authorship and all work product relating thereto. This disclosure will include complete and accurate copies of all source code, object code or machine-readable copies, documentation, work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence or results (collectively, "Tangible Embodiments") of such Inventions, works of authorship and work product. All Tangible Embodiments of any Invention, work of authorship or work product related thereto will be deemed to have been assigned to the Company as a result of the act of expressing any Invention or work of authorship therein. B-2 Dx N;('1•a02 (97309.00015) ti0029d56v6;07lL/2007/Cima:15:13 (e) Executive hereby assigns to the Company (together with the right to prosecute or sue for infringements or other violations of the same) the entire worldwide right, title and interest to any such Inventions or works made for hire, and Executive agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company's expense, in registering, recording, obtaining, maintainir , defending, enforcing and assigning Inventions or works made for hire in any +Fd all countries.. Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agents and attomeys-in-fact to act for and in Executive's behalf and instead of Executive, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Executive; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest. (f) Without limiting the generality of any other provision of this Section 3, Executive hereby authorizes the Company and each of its Affiliates (and their respective successors) to make any desired changes to any part of any Invention, to combine it with other materials in any manner desired, and to withhold Executive's identity in connection with,, any distribution or use thereof alone or in combination with other materials. (g) Pursuant to the Illinois Executives' Patent Act, Public Act 83-493, this Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of Parent or the Company was used and which was developed entirely on Executive's own time, unless (1) the invention relates (a) to the business of Parent or the Company or (b) to Parent's or the Company's actual demonstrably anticipated research or development; or (2) the invention results from any work performed by Executive for Parent or the Company. (h) The obligations of Executive set forth in this Section 3 (including, but not limited to, the assignment obligations) will continue beyond the termination of Executive's employment with respect to Inventions conceived or made by Executive alone or in concert with others during Executive's employment with the Company and during the one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Executive and Executive's executors, administrators and other representatives. 4. List of Prior Inventions. All Inventions which Executive has made prior to employment by the Company are excluded from the scope of this Agreement. As a matter of record, Executive has set forth on Annes I hereto a complete list of those Inventions which might relate to Parent's or the Company's business and which have been made by Executive prior to employment with the Company. Executive represents that such list is complete. If no list is attached, Executive represents that there are no prior Inventions. B-3 Doc A:C}D02 (L7309.00?15160D2Sa36v6:07?If1W7lI"mm:15:17 5. Non-Solicitation. (a) Executive will not, during the term of Executive's employment with the Company and for two (2) years thereafter (the "Restricted Period`% directly or indirectly (whether as an owner, partner, shareholder; agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity: i. employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, an employee of Parent, the Company or any of their Affiliates or otherwise seek to adversely influence or alter such individual's relationship with Parent, the Company or any of their Affiliates; or ii. explicitly solicit or encourage any individual or entity that is, or was during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, a customer or vendor of Parent or the Company to terminate or otherwise alter his, her, or its relationship with Parent or the Company. (b) The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of this Section 5. 6. Egnitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the teams of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent, and the Company will be entitled to immediate injunctive and other equitable relies; without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 5 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 7. No Rio-lit to Employment. No provision of this Agreement shall give Executive any right to continue in the employ of the Company or any of its Affiliates, create any inference as to the length of employment of Executive, affect the right of the Company or its Affiliates to terminate the employment of Executive, with or without cause, or give Executive any right to participate in any Executive welfare or benefit plan or other program of the Company or any of its Affiliates. 8. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived, except by written inswurrient of the party charged 13-4 e ctt?oz ca?3us aunin eaozvese suzrnrtaozrr?, is: is with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of Stich term or condition for the future or as to any act other than that specifically waived. Severabilit_v. Executive acknowledges that the agreements and covenants contained in this Agreement are essential to protect Parent, the otnpany and their goodwill. Each of the covenants in this Agreement will be construed independent of 'any other covenants or other provisions of this Agreement. It is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully, enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. 10. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing: and will be deemed to have been properly. given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, ?in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Winois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 13-5 Dw0:CM02(67709-0001S) 60M$36v6,GV=OOVr e:1S:13 Each party will be entitled to specify a different address for the receipt of subseauent notices by giving written notice thereof to the other party in accordance with this Section 10. 11. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement 12. Governing. Law. This Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. /i 13. Binding, Effect. This Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement provided that the Company will remain liable to Executive should such assignee fail to perform its obligations under this Agreement 14. No Strict Constructieu. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied hainst any person B-6 DocB;CHI02(8730?-WIS) 6"6S6v6;02/2V2002rru IStu IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has signed this Agreement, as of the date written below, EUCUI'IVFr Date: February 2002 John . Stone , r. AMES TRUE TEMPER, INC. By: B-7 Doe WCM02 (87300-00015) 6002985616!02=WIM'Wft:16')3 ?X?jb,? ? ATT Holding Co. Ames True Temper 465 Railroad Avenue Camp Hill, PA 17011 1 ( tai August 14, 2002 John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 Re: Bonus Payment and Non-Compete Extension Dear Mr. Stoner: Reference is hereby made to that certain Termination Notice dated as of July 25, 2002 delivered by Ames True Temper, Inc. (the "Company") and ATT Holding Co. (the "Parent'D to you, a copy of which is attached hereto as Exhibit A (the "Termination Notice'. The purpose of this letter is to outline our agreement to provide you with a pro- rated portion of your bonus for the period commencing October 1, 2001 and continuing through August 24, 2002, the date of your termination (the "Termination Date") pursuant to the Termination Notice (such period, the `Bonus Period"), which bonus payment shall be in exchange for your agreement to extend the Restricted Period (as defined in your Amended and Restated Employment Agreement dated as of February 28, 2002, a copy of which is attached hereto as Exhibit B (the "Employment Agreement') for purposes of certain restrictive covenants.provided in the Employment Agreement from two (2) to three (3) years. In addition to the severance benefits described in the Termination Notice, you will be entitled to receive a pro rated bonus for the Bonus Period, which bonus shall be paid at the Company's regular bonus payment date in accordance with the Company's standard bonus payment procedures (the "Bonus"). In consideration of the Company's agreement to pay you the Bonus, you agree that the Restricted Period for purposes of Section 9 of the Employment Agreement shall be extended from two (2) to three (3) years commencing on the Termination Date, and that during the Restricted Period you will not be able to engage in any behavior in violation of Section 9 of the Employment Agreement. In summary and without in any way limiting the Company's rights or your responsibilities under Section 9 of the Employment Agreement, during the Restricted Period, you may not be employed by, or otherwise provide services to, any competitor of the Company. "Competitors" of the Company shall mean any companies; engaged in the business of manufacturing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, and decorative accessories for the lawn and garden. In addition, pursuant to that certain Confidentiality, Inventions and Non-Solicitation Dm9:CHI02(215494-0000)) 60095882Q;081J41200Ni.:i6.2I Agreement between you and the Company dated as of February 28, 2002, a copy of which is attached hereto as Exhibit C (the "Confidentiality, Inventions and Non- Solicitation Agreement"), you will not be able to solicit any employee or vendor of the Company to end or alter their relationship with the Company during the Restricted Period. Moreover, under Section I of the Confidentiality, Inventions and Non-Solicitation Agreement, and under applicable state law, you are not permitted to disclose trade secrets or other confidential information to any person and you may not make use of this information yourself. If you have any documents or information stored in a computer- readable format that contain any information regarding the Company, please return those documents or that information to the Company immediately, or permanently erase it, if it is not practical to return it to the Company. The Company's obligation to pay the Bonus described above and severance described in the Termination Notice will cease if you breach either Section 9 of the Employment Agreement or any section of the Confidentiality, Inventions and Non- Solicitation Agreement. As a further condition to your receipt of the Bonus and severance, pursuant to Section 11(f) of the Employment Agreement, you are required to execute and return a copy of the Separation Agreement and General Release, which was originally attached to the Termination Notice, and is attached hereto (in a form modified to reflect the Company's agreement to pay you the Bonus) as Exhibit D (the "Release'7. Pursuant to Section 12(b) of the Release, you originally had until August 15, 2002 to review the Release and determine whether or not you wish to sign a copy of the same. Per your request, we have agreed to extend this date until August 20, 2002. Should you elect to sign the Release, you must return an executed copy to the Company no later than the close of business on August 20, 2002. Except as otherwise described herein, this letter. is not intended to after or supercede the rights and obligations contained in the Termination Notice, Employment Agreement and related documents in any manner. This letter may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement. Please acknowledge your receipt of this letter and agreement to be bound by the terms contained herein by executing a copy of this letter in the space provided below and DoC N:CM02 (2154%-W W 1) 60095882v2;08/14/ 2002171=i6:21 returning it to the Company along with the Release. We wish you the best of luck in the future. 11 Smcl rely4 ATT Holding Co. By: Its: Ames True Temper, Inc. By: -- Its: l' i= n Agreed to and aclmowledged as of this 19 day of ?lyyV.s? .2002 by, Jo M. toner, Jr. cc: Richard Kracum Michael J. Solot Steven V. Napolitano Scott E. Lyons D.#:CM02(213494.WW1) 60095882v2;W142002M=:l621 Exhibit A Termination Notice Dn aCHI02(11549"W1) 60095882v2:0&l4/2002MMW..1611 ATT Holding Co. Ames True Temper 465 Railroad Avenue Camp Hill, PA 17011 July 25, 2002 John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 Re: Termination of Employment Dear Mr. Stoner: Please be advised that Ames True Temper, Inc. ("Company") is terminating your employment without Due Cause effective August 24, 2002 (the "Termination Date"), under Section 11(d) of the Amended and Restated Employment Agreement (the "Employment Agreement") between you and the Company dated February 28, 2002. This letter outlines payment schedules, stock repurchase details, and other matters in connection with the termination.) Through the Termination Date, the Company will continue your Base Salary and benefits, payable in accordance with the regular payroll schedule. The Company will not, however, require you to continue to perform your job duties after today. Rather, the Company will regard you as being on inactive status between July 25 and the Termination Date. You will continue to accrue your vacation benefits through the Termination Date, and will receive a check for all accrued but unused vacation time following the Tenminaton Date. The Company will also provide you with outplacement service through the Company's outplacement agency, Quinlivan & Company, for three consecutive months, to begin on a date of your choosing between July 25 and August 25. Because your termination is without Due Cause, you are eligible to receive severance pay. Pursuant to the Employment Agreement, the severance pay shall be equal to one year of your current Base Salary in the gross amount of $260,000, payable in equal installments during the one year period commencing on the Termination Date ("Severance Period'). Specifically, the severance pay will consist of twenty six (26) I Unless otherwise defined herein, the capitalized terms shall have the meaning ascribed to them in the applicable agreement between you and the Company. The short summaries set forth in this letter of the rights and obligations under the Employment Agreement, the Management Agreement and related documents are not intended to alter or supersede the rights and obligations contained in those documents in any mamwr. In addition, until the closing of the repurchase of your Executive Securities, nothing in this letter is intended to alter any of the rights of the parties under any other documents to which they are a party, including, without limitation, the Stockholders Agreement or the Registration Rights Agreement among the Parent, you and the other stockholders of Parent originally dated January 14, 2002, as amended. Doc M:CHb2 (215494-00001) 60D99N6,3;07/24/2DOMffi c! 12:50 payments of $10,000.00, made bi-weekly on the Company's regular salary payment dates, beginning with the first payroll period after the Termination Date. You are also eligible to maintain certain employment benefits during the Severance Period, including medical and dental benefits at the same contribution level as though you were still employed, provided that you remain eligible for and elect such benefit continuation through COBRA. The Company will forward the COBRA election documents to you under separate cover. Pursuant to Section 11(f) of the Employment Agreement, as a condition to receiving these severance benefits, you must execute and return a copy of the Separation Agreement and General Release (the "Release's provided to you with this letter. Pursuant to Section 12(b) of the Release, you will have until August 15, 2002 to sign the Release and tender it to the Company. You will then have seven ('7) days to revoke the Release should you change your mind. Of course, if you elect not to sign the Release or revoke it within the seven (7) day period, you will not be entitled to receive any of the severance benefits described above. As a further condition to receiving the severance benefits, you must continue to abide by the restrictive covenants contained in Section 9 of the Employment Agreement and the Confidentiality, Inventions and Non-Solicitation Agreement between you and the Company dated as of February 28, 2002, a copy of which is attached) hereto as Exhibit A. In short, these covenants restrict you from utilizing or disclosing the Company's trade secret or confidential information, and, for a period of two (2) years commencing on the Termination Date, from becoming employed by, or otherwise providing services to, any competitor of the Company, or soliciting any employee or vendor of the Company to end or alter their relationship with the Company. You should consult the applicable documents for a full description of your restrictive covenant obligations. In light of the termination, ATT Holding Co., the parent of the Company ("Parent"), is also hereby giving you notice of its intent to repurchase all of your Executive Securities under Section 3(d) of the Senior Management Agreement between you and Parent dated as of February 28, 2002, a copy of which is attached hereto as Exhibit B (the "Management Agreement"). Specifically, the Parent will repurchase your Executive Securities consisting of. (a) 30,000 shares of the Parent's Class A Common Stock (the "Incentive Shares") and (b) 98.646 shares of the Parent's Series A Preferred Stock (the "Preferred Coinvest Shares") and 1,354.167 shares of tine Parent's Class A Common Stock (the "Common Coinvest Shares" and, together with the Preferred Coinvest Shares, the "Coinvest Shares"). Pursuant to Sections 2(a) and 2(b) of the Management Agreement, all of the Incentive Shares are Unvested Shares (as defined in Section 2(b) of the Management Agreement). Therefore, pursuant to Section 3(b) of the Management Agreement, the purchase price for the Incentive Shares will be your original cost of $1.00 per share or an aggregate of $30,000 for the Incentive Shares. With respect to your Coinvest Shares, Parent will refund the full purchase price of your investment, plus accrued dividends on the Preferred Coinvest Shares. Therefore, the purchase price for (a) the Preferred Coinvest Shares will be your original cost of $11,000 per share plus accrued and unpaid dividends from the period of March 1, 2002 through September 15, Doc 11:Ca102(215494.WWI) 6W992060;07/M002 =:12:50 2002 of $54.52 per share or an aggregate cost plus dividends of $104,024.23 for the Preferred Coinvest Shares and (b) the Common Coinvest Shares will be your original cost of $1.00 per share or an aggregate of $1,354.167 for the Common Coinvest Shares. Pursuant to Section 3(e) of the Management Agreement, the closing date of the repurchase of your Executive Securities will be September 15, 2002 (the "Closing Date"). On the Closing Date, the Parent will pay you the aggregate price to be paid for the Executive Securities by check. As the Parent has in its possession the certificates representing the Executive Securities, such certificates will be canceled on the Closing Date, and the closing of the repurchase will take place without any :Further action on your part. John, we thank you for your service to the Company and wish you the best of luck in the future. If you have any questions, either now or in the coming weeks, please feel free to contact Rich Dell at (717) 730-2530. Sincerely, ATT Holding Co. By: Its: '772ed SL/ l1 ? 2 Ames True Temper, Inc. By; --z= Its: e e o M Richard Kracum Michael J. Solot Steven V. Napolitano Scott E. Lyons D. N:CMM(215494-00001) 60089206Y;07/23/200?fCi 1232 Exhibit B Amended and Restated Employment Agreement A Doc #:CFE07 (215494.0001) 60093682v2;08&14l7007jTimr1621 KMZ DRAFT: February 21, 2002 AMENDED AND RESTATED EMPLOYMENT AGREENIEEN This AMENDED AND RESTATED ,E {y 01YEENT AGREEMENT (this "Employment Agreement") is made this _ day of February, 2002 by and between Ames True Temper, Inc., a Delaware corporation (the "Compaay'D, and JOHN M. STONER, JIZ. ('Executive'). WHEREAS, the Company and its subsidiaries are engaged in the business of (i) manufacturing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, and decorative accessories for the lawn and garden, and (ii) conducting such other activities as are undertaken from time to time by the Company, its parent, ATT Holding Co., a Delaware corporation ("Parent"), and each of their subsidiaries as a result of future acquisitions, or otherwise (collectively, the "Business'; WHEREAS, Executive entered into that certain Employment Agreement dated as of June 1, 2000 (the "Old Employment Agreement'? with True Temper Hardware Company, a Delaware corporation ("True Temper ); VaXREAS, on October 1, 2000, True Temper merged with and into the Company, and in connection therewith, among other things, the Company changed its name to "Ames True Temper, Inc.° and succeeded to all of the rights and obligations of True Temper under the Old Employment Agreement; WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, as the President of the Company, in accordance with the terms and conditions set forth herein; and WHEREAS, the Company and Executive each desire that the Old Employment Agreement be amended and restated in its entirety as set forth in this Employment Agreement and that this Employment Agreement supercede the Old Employment Agreement, and all other agreements with respect to the subject matter hereof, other than that certain Incentive Award Agreement dated as of July 19, 2001 between the Company and Executive (the "Incentive Award Agreement"), which Incentive Aware Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement; and WHEREAS, in partial consideration for Executive's agreement to amend and restate the Old Employment Agreement as set forth herein, Executive will be entitled to purchase 30,000 shares of Class A Common Stock, par value $0.0001 per share of Parent ("Class A Common Stock"), at a purchase price of $1.00 per share (the "Executive Stares"), which Executive Shares shall be purchased by Executive pursuant to that certain senior management agreement to be entered into between Parent and the Executive (the "Management Agreement', Oft #:Ca102 (87309-00015) 60079856v6;02/4ln0021rime:15.13 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises in this Employment Agreement, the parties, intending to be legally bound, hereby agree as follows: 1. Employment. The Company hereby agrees to employ Executive as President Of the Company, and Executive hereby agrees to accept such employment and agrees to act as President of the Company, all in accordance with the terms and conditions of this Employment Agreement. Executive hereby represents and warrants that neither Executive's entry into this Employment Agreement nor Executive's performance of Executive's obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation of any nature to which Executive is a party or by which Executive is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement entered into by Executive. 2. Term of Employment and Automatic Renewal. The term of Executive's employment under this Employment Agreement will commence on the date of this Employment Agreement and will continue until the third (3rd) anniversary of the date of this Employment Agreement (the "Initial Employment Period"). THE INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL EMPLOYMENT PERIOD (AS DEFINED HEREIN) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (EACH, A "RENEWAL EMPLOYMENT PERIOD"), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT PERIOD, AS THE CASTE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTH1:R PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial Employment Period and the Renewal Employment Periods are hereinafter referred to as the "Employment Period." For purposes of this Employment Agreement, any notice of termination electing not to renew this Employment Agreement pursuant to this Section 2 shall be deemed: (1) a termination without Due Cause pursuant to Section 11(d) if such notice is delivered by the Company; or (ii) a voluntary resignation without Good Reason pursuant to Section 11(e) if such notice is delivered by Executive. Notwithstanding anything to the contrary contained herein, the Employment Period is subject to termination pursuant to Section 11 below. 3. Position and Responsibilities. Executive shall report to and be subject to the direction of the Chief Executive Officer of the Company. Executive shall perform and discharge such duties and responsibilities for the Company as the Chief Executive Officer may from time to time reasonably assign Executive. Executive understands and acknowledges that such duties shall be subject to revision and modification by the Board upon reasonable notice to Executive. During the Employment Period, Executive shall devote Executive's full business time, attention, skill and efforts to the faithful performance of Executive's duties herein, and shall perform the duties and carry out the responsibilities assigned to Executive, to the best of Executive's ability, in a diligent, trustworthy and businesslike manner for the purpose of advancing the Company. Executive acknowledges that Executive's duties and responsibilities will require Executive`s full-time business efforts and agrees that during the Employment Period, Executive will not Doc =:CH102 (87309-00015) 60029B56.6;02/=002rrim,11:13 engage in any outside business activities that conflict with his obligations under this Employment Agreement. 4. Compensation. (a) Base Salary. During the EmploymFnt Period, the Company shall pay to Executive a minimum base salary at the rate of $2.60,?Q per year (the 'Base Salary, less applicable tax withholding, subject to increase from a to time, solely at the Company's discretion, payable at the Company's regular employee payroll intervals. Executive's performance shall be reviewed annually and the Base Salary may be increased at the Company's sole discretion. (b) Discretionary Bonus. During the Employment Period, Executive shall be eligible to receive a cash bonus based upon the achievement of certain budgeted performance goals pursuant to a program approved by the Board of Directors of the Company (the "Board) and substantially similar to that set forth on Exhibit A attached hereto (the "Performance Bonus"), Executive shall also be eligible to receive additional bonuses, in such amounts, if any, as determined by the Board in its sole discretion based upon the achievement of performance goals and objectives approved by the Board. (c) Stock Pursuant to the Management Agreement, Executive will purchase the Executive Shares, which Executive Shares shall be subject to certain vesting, repurchase and other obligations and restrictions set forth in the Management Agreement and in that certain stockholders agreement (the "Stockholders AgreemeneD previously entered into among Parent, the Investors (as defined therein) and certain other shareholders of Parent, which Executive shall join as a party by executing a joinder thereto in form and substance satisfactory to the Company. In addition, pursuant to that certain stock purchase agreement (the "Stock Purchase Agreement'D previously entered into among Patent, the Investors (as defined therein) and certain other executives of the Company, which Executive shall join as a party by executing a joinder thereto in form and substance satisfactory to the Company, Executive will purchase certain additional shares of Class A Common Stock and certain shares of Series A Preferred Stock, par value $0.0001 per share, of Parent (collectively, the "Coinvest Shares"), which Coinvest Shares shall be subject to certain repurchase and other obligations and restric(7ons set forth in the Management Agreement and in the Stockholders Agreement 5. Benefit Flans. During the Employment Period, Executive will be entitled to receive traditional employment benefits comparable to those provided to other senior executive officers of the Company (subject to any applicable waiting periods, eligibility requirements. or other restrictions), which may include insurance (medical, dental, life, disability, directors and officers, etc.), retirement plans, and profit sharing plans. 6. a enses. The Company, in accordance with policies and practices established by the Board from time to time, will pay or reimburse Executive for all expenses (including travel and cell phone expenses) reasonably incurred by Executive during the Employment Period in connection with the performance of Executive's duties under this Employment Agreement, 3 Dae#:CM(S4309-00013) 6Wn85M: M7/2DrM %13:13 provided that Executive shall provide to the Company documentation or evidence of expenses for which Executive seeks reimbursement in accordance with the policies and procedures established by the Board from time to time. 7. Vacation. Executive shall be entitled to vacation at the rate of four (4) weeks per year in accordance with the Companys vacation policy. Executive shall make good faith efforts to schedule vacations so as to least conflict with the conduct of the Company's business and will give the Company adequate advance notice of Executive's planned absences, Up to one-half (1/2) of Executive's unused vacation time may be carried over to subsequent years; provided however, that in no event shall Executive be entitled to greater than six (6) weeks vacation per year. 8. Confidentialityl Inventions and Non-Solicitation Agreement. On the date hereof, Executive shall execute a confidentiality, inventions and non-solicitation agreement, in the form of Fibibit B attached hereto and made a part hereof (the "ConSdendality, Inventions and Non-Solicitation Agreemeaf 9, Restrictive Covenants. (a) Executive's Acknowledatment. Executive acknowledges that: (i) Parent and the Company are and will be engaged in the Business during the Employment Period and thereafter, (ii) Parent and the Company are and will be actively engaged in the Business throughout the world; (iii) Executive is one of a limited number of persons who will be developing the Business; (iv) Executive will occupy a position of trust and confidence with the Company after the date of this Employment Agreement and during the Employment Period Executive will become familiar with Parent's and the Company's (and their subsidiaries') trade secrets and with other proprietary and confidential information conceming Parent and the Company (and their subsidiaries and portfolio companies) and the Business (and the business of their subsidiaries and portfolio companies); (v) the agreements and covenants contained in this Section 9 are essential to protect Parent, the Company and the goodwill of the Business and are a condition precedent to the Company entering into this Employment Agreement; (vi) Executive's employment with the Company has special, unique and extraordinary value to the Company and Parent and the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Employment Agreement; and (vii) Executive has means to support Executive and Executive's dependents other than by engaging in the Business, and the provisions of this Section 9 will not impair such ability. (b) Restrictions. Executive will not, during the Restricted Period (as defined below), anywhere in the world (the "Restricted Territory"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultaat, or otherwise) own, operate, manage, control, invest in, perform services for, or engage or participate in any manner in, or render services to (alone or in association with any person or entity) or otherwise assist any person or entity that engages in, or owns, invests in, operates, manages or controls any venture or enterprise that engages in, the Business. 4 DM s{}02 (8f3?9-0OOI SJ 60039856.6A22VJSOO7J1'rtne:l S:IJ The term "Restricted Period" means the period of time from the date of this Employment Agreement until two (2) years after the termination for any reason of Executive's employment relationship with the Company or any successor thereto (whether pursuant to a written agreement or otherwise, including any Renewal Employment Period under this Employment Agreement). The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of Section 9. Nothing contained in Section 9(i) above shall be construed to prevent Executive from investing in the stock of any competing eq poration listed on a national securities exchange or traded in the over-the-counter market, but only if Executive is not involved in the business of said corporation and if Executive and Executive's associates (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of one percent (IV*) of the stock of such corporation. (c) Scoae/Severability. The parties acknowledge that the business of Parent and the Company is and will be national and international in scope and thus the covenants in this Section 9 would be ineffective if the covenants were to be limited to a particular geographic area. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants set forth in this Section 9 not fully enforceable, the other provisions of this Section 9, and this Employment Agreement in general, will nevertheless stand and to the full extent comisteut with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Employment Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Period be deemed to be the longest period permissible by law, but not in excess of the length provided for in Section 9(b), and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances but not in excess of the territory provided for in Section 9(b)). 10. Equitable Remedies. Executive acknowledges and agrees that,the agreements and covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing in this Section 1.0 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 11. Termination, (a) Death. The Employment Period will terminate immediately upon the death of Executive. If the Employment Period is terminated pursuant to this Section 11(a), the Company shall have no further obligation to Executive (or his estate) except for salary and Doc N:CH102120309-00015) 6002985696:02/2L2002mme: 15;13 benefits accrued through the date of termination, and except as otherwise described in Section. 4(e) of this Employment Agreement. (b) Due Cause. The Company may terminate the Employment Period immediately upon written notice to Executive for a material breach of this Employment Agreement by Executive. The following events will be deemed a material breach of this Employment Agreement (each of which shall constitute "Due ue Cause"): (i) Executive's material breach of any of Executive's obligations under the Confidentiality, Inventions and Non-Solicitation Agreement, this Employment Agreement, the Stock Purchase Agreement, the Management Agreement or the Stockholders Agreement; or (U) Executive's continued and deliberate neglect of, willful misconduct in connection with the performance of, or refusal to perform Executive's duties in accordance with Section 3 of this Employment Agreement, which, in the case of neglect or failure to perform, has not been cured within thirty (30) days after Executive has been provided notice of the same; or (iii) Executive' s'. engagement in any conduct which injures the integrity, character or reputation of the Company or which impugns Executive's own integrity, character or reputation so as to cause Executive to be unfit to act in the capacity of President of the Company; or (iv) the Board's good faith determination that Executive has committed an act or acts constituting a felony, or other act involving dishonesty, disloyalty or fraud against the Company. If the Employment Period is terminated pursuant to this Section 11(b), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement. (c) Permanent Disability. The Company may terminate the Employment Period upon the Permanent Disability (as defined below) of the Executive. If the Employment Period is terminated pursuant to this Section 11(e), then Executive will be entitled to receive his salary and benefits accrued through the date of termination and such benefits, if any, as may be provided Executive pursuant to the Company's disability insurance policy with ReliaStar. Except as set forth in the immediately preceding sentence and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section 11(c), the Company shall have no further obligation to Executive. For purposes of this Employment Agreement, the term "Permanent Disability" shall mean that ]Executive is unable to perform, with or without reasonable accommodation, by reason of physical or mental incapacity, the essential functions of his or her position for ninety (90) or more days in any one hundred twenty (120) day period. The Board shall determine, according to the facts then available, whether and 6 Doe M<TU02 (87709-00015) 6DD2?psEb:o7JL?20o2/f?me:)1;?3 when a Permanent Disability has occurred, unreasonable. Such determination shall not be axbitrary or (d) Termination by the Comuanv without Due Cause. The Company clay terminate the Employment Period without Cause upon thirty (30) days' prior written notice. if the Employment Period is terminated pursuant to this Section 11(d), then Executive will be entitled to receive as severance pay his Base Salary, p1q,` benefits for. a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. Except as set forth in the first sentence of this Section 11(d) and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section 11(d), the Company shall have no futther obligation to Executive. (e) Voluntary Resignation by Executive. Executive may terminate the Employment Period at anytime for any reason upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section-11(e),-the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement; Provided, however that if Executive is terminating the Employment Period for Good Reason (as defined below), then Executive will'be entitled to receive as severance pay his Base Salary plus benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. The following events will be deemed "Good Reason" for which Executive may terminate the Employment Period and receive the severance payments set forth in this Section 11(e): (1) a material diminution of the Executive's responsibilities after notice to the Company and a thirty (30) day opportunity to cure; or (ii) any material breach of this Employment Agreement on the part of the Company (including, but not limited to, any decrease in the Base Salary without the consent of the Executive, or relocation of Executive's place of employment to a location that is greater than filly (50) miles from the Harrisburg, Pennsylvania metropolitan area), after notice to the Board, and a thirty (30) day opportunity to cure; provided, however that Executive is not in material breach of any of the terms of this Employment Agreement. (f) General Release. The receipt of any payment as set forth in Sections 11(c)-(e) above shall be contingent upon Executive's execution of a general release of all claims against the Company and its Affiliates (as defined below), substantially in the form attached hereto as Exhibit C. For purposes of this Employment Agreement, the tent "At1711iates" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly or indirectly, through one or Dx *?.M92 (STM-Ml ) OM9U&6;OZ7MOONme: 19;17 more intermediaries, controls, is controlled by, or is under common control with, the Company including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 1404 of the Code. (g) Mitigation. Notwithstanding anything herein to the contrary, to the extent Executive obtains employment during the first six (ti) ponths of the severance period, the Company's severance obligations under this Employ ent Agreement, , including, without limitation, the continuation of Executive's benefits hereinder, shall cease upon the first day of the seventh (7th) month of the severance period. Executive agrees that if Executive accepts other employment during the first six (4) months of the severance period, Executive shall notify the Company in writing within two (2) business days of such acceptance. Executive acknowledges that his failure to abide by this provision shall entitle the Company to recoup all severance pay previously paid to Executive pursuant to this Employment Agreement. (h) urviyal, Termination of the Employment Period in accordance with this Section 11, or expiration of the Employment Period, will not affect the provisions of this Employment Agreement that survive such termination, including, without limitation, the provisions in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, and will not limit either party's ability to pursue remedies at law or equity. 12. Attorney's Fees. If either party prevails in a legal action to enforce or protect its rights under this Employment Agreement, then that party shall be entitled to recover reasonable attorneys' fees, costs, and expenses, in addition to all other relief, including but not limited to damages and injunctive relief. 13. Exeeutiye Assistance. Both during and after Executive's employment with the Company, Executive shall, upon reasonable notice, furnish the Company with such information as may be in Executive's possession or control, and cooperate with the Company, as the Company may reasonably request (with due consideration to Executive's business activities and obligations after the Employment Period), in connection with any litigation, claim, or other dispute in which the Company or any of its Affiliates is or may become a panty, The Company shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in fulfilling Executive's obligations under this Section 13. 14. Effect of Prior Agreements, This Employment Agreement, the Management Agreement, the Stockholders Agreement, the Stock Purchase Agreement and the Cotifidentiality, Inventions and Non-Solicitation Agreement contain the entire understanding between Parent, the Company and Executive relating to the subject matter hereof and supersede any prior employment agreement between Executive, Parent and the Company, including, without limitation, the Old Employment Agreement, or other agreement relating to the subject matter hereof between Parent, the Company and Executive, other than the Incentive Award Agreement, which Incentive Award Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement. 09c M:CHro2 (87309.00015) 60029856,6;0=Z'M M=:16:13 8 15, Modification and Waiver. This Employment Agreement may not be modified or amended, nor may any provisions of this Employment Agreement be, waived, except by an instrument in writing signed by the parties. No written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as'to the specific term or condition waived and shall not constitute a waiver of such terra or condition for the future or as to any act other than that specifically waived, 16. Severability. If, for any reason, any provision of this Employment Agreement is held invalid, such invalidity will not affect any other provision of this Employment Agreement, and each provision will to the full extent consistent with law continue in full force and effect. If any provision of this Employment Agreement is held invalid in part, such invalidity will in no way affect the rest of such provision, and the rest of such provision, together with all other provisions of this Employment Agreement, will, to the full extent consistent with law, continue in full force and effect. 17. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Employment Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by' U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: Uto the Company: Ames True Temper, Inc. c/o wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 ;Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 Doc *M01 ($7309-00017) 6=9956v6:03==rkm )5:13 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 17. 18. Third Partv Beneficiaries, Nothing hwein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than the parties to this Employment Agreement and their respective persnittq?? successors and assigns, any rights or remedies under or by reason of this Employment Agreement. 19. Headings. The headings and other captions in this Employment Agreement are included solely for convenience, of reference and will not control the meaning and interpretation of any provision of this Employment Agreement. 20. Governing Law; Arbitration. This Employment Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. Except for disputes arising out of an alleged violation of the Restrictive Covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. The arbitration process shall be instigated by either party giving written notice to the other of the desire for arbitration and the factual allegations underlying the basis for the dispute. The arbitration shall be conducted by such alternative dispute resolution service as is agreed to by the parties, or, failing such agreement within thirty (30) days after such dispute arises, by arbitrators selected as described below in accordance with the rules and procedures established by the American Arbitration Association. Only a person who is a practicing lawyer admitted to a state bar may serve as an arbitrator. Each party shall select one arbitrator, and those arbitrators shall choose a third arbitrator; these arbitrators shall constitute the panel. The American Arbitration Association rules for employment arbitration shall control any discovery conducted in connection with the arbitration. The expenses of arbitration (other than attorneys' fees) shall be shared as determined by arbitration. Each side to the claim or controversy shall pay their own attorneys' fees. Any result reached by the panel shall be binding on all parties to the arbitration, and no appeal may be taken. It is agreed that any party to any award rendered in such arbitration proceeding may seek a judgment upon the award and that judgment may be entered thereon by any court having jurisdiction. The arbitration shall be conducted in the Commonwealth of Pennsylvania. 21. Non-Assigsnabilit_ylBindinp Effect. This Employment Agreement shall not be assignable by either party without the prior written consent of the other party. This Employment Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. 22. No Strict Construction. The language used in this Employment Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. 10 Doc M;CHM2187309.W915) b0029L56v6:07/2LSPU!(('imc: Is; 13 [Remainder of Page Intentionally Blank; Signature Page to FoUow] i? 11 Dx #.CM03 (87309.WI5) 6OM36,d:o2/2v2aruriM15!13 IN WITNESS FVHEREOF, the Company has caused this Employment Agreement to be executed by its duly authorized offices and Executive has signed this Erployment Agreement, as of the date fast above written. AMES TRUE ,TEIV,IpER, PiC. By: Its: EXECUTIVE John K. 5ton , 7r. / 12 Doc 4:CHI07 i?3?'?013) 80029836yd;0227R007lIuoc:13:13 Eabibit C Confidentiality, Inventions and Non-Solicitation Agreement Doc PICM02(215494-OMI) 600958622;0&14/2002Mwe:16:21 CONFIDENTIALITY, INVENTIONS AND NON-SOLICITATION AGREEMENT In consideration of employment by Ames True Temper, Inc., a Delaware corporation, its successors or assigns (the "Company") of John M. Stoner, Jr. ("Executive"), it is understood and agreed as follows: Confidential Information. (a) Executive acknowledges that the Confidential Information (as defined below) constitutes a protectible business interest of the Company and its parent, ATT Holding Co., a Delaware corporation ("Parent"), and covenants and agrees that at all times during the period of Executive's employment, and at all times after termination of such employment, Executive will not, directly or indirectly, disclose, famish, make available or utilize any Confidential Information other than in the course of performing duties as an employee of the Company. Executive will abide by Company policies and rules as may be established from time to time by it for the protection of its Confidential Information. Executive agrees that in the course of employment with the Company Executive will not bring to the Company's offices nor use, disclose to the Company, or induce the Company to use, any confidential information or documents belonging to others. Executive's obligations under this Section La. with respect to particular Confidential Information will survive expiration or termination of this Confidentiality, Inventions and Non-Solicitation Agreement (this "Agreement"), and Executive's employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes generally known to the public other than through a breach of Executive's obligations under this Agreement. (b) As used in this Agreement, the term "Confidential Information" means any and all confidential, proprietary or trade secret information, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is conceived or developed by Executive, applicable to or in any way related to: (i) the present or future business of Parent, the Company or any of their Affiliates (as defined below); (ii) the research and development of Parent, the Company or any of their Affiliates; or (iii) the business of any client or vendor of Parent, the Company or any of their Affiliates. Such Confidential Information includes the following property or information of Parent, the Company and their Affiliates, by way of example and without limitation, trade secrets, processes, formulas, data, program documentation, customer lists, designs, drawings, algorithms, source code, object code, know-how, improvements, inventions, licenses, techniques, all plans or strategies for marketing, development and pricing, business plans, financial statements, profit margins and all information concerning existing or potential clients, suppliers or B-1 vendors. Confidential Ihformation of Parent and the Company also means all similar information disclosed to Parent or the Company by third parties which is subject to confidentiality obligations. The term "Affiliates" means (i) all persons or entities controlling, controlled by or under common control with, Parent and/or the Company, (ii) all companies or entities in which Parent or the Company own an equity interest and (iii) all predecessors, successors and assigns of the those Affiliates identified in (i) and (ii). 2. Return of Materials. Upon termination of employment with the Company, and regardless of the reason for such termination, Executive will leave with, or promptly return to, the Company all documents, records, notebooks, magnetic tapes, disks or other materials, including all copies, in Executive's possession or control which contain Confidential Information or any other information concerning Parent, the Company, any of their Affiliates or any of their respective products, services or clients, whether prepared by the Executive or others. Notwithstanding the foregoing, Executive shall be entitled to retain his personal effects provided any Confidential Information is removed therefrom. 3. Inventions as Sole Property of the Company. (a) Executive covenants and agrees that all Inventions (as defined below) shall be the sole and exclusive property of the Company. (b) As used in this Agreement, the term "Inventions" means any and all inventions, developments, discoveries, improvements, works of authorship, concepts or ideas, or expressions thereof, whether or not subject to patents, copyright, trademark, trade secret protection or other intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice, conceived or developed by Executive while employed with the Company or within one (1) year following termination of such employment which relate to or result from the actual or anticipated business, work, research or investigation of Parent, the Company or any of their Affiliates or which are suggested by or result from any task assigned to or performed by Executive for Parent, the Company or any of their Affiliates. (c) Executive acknowledges that all original works of authorship which are made by him or her (solely or jointly) are works made for hire under the United States Copyright Act (17 U.S.C., et seq.). (d) Executive agrees to promptly disclose to the Company all Inventions, all original works of authorship and all work product relating thereto. This disclosure will include complete and accurate copies of all source code, object code or machine-readable copies, documentation, work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence or results (collectively, "Tangible Embodiments' of such Inventions, works of authorship and work product. All Tangible Embodiments of any Invention, work of authorship or work product related thereto will be deemed to have been assigned to the Company as a result of the act of expressing any Invention or work of authorship therein. B-2 (e) Executive hereby assigns to the Company (together with the right to prosecute or sue for infringements or other violations of the same) the entire worldwide right, title and interest to any such Inventions or works made :for hire, and Executive agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company's expense, in registering, recording, obtaining, maintaining, defending, enforcing and assigning Inventions or works made for hire in any and all countries. Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agents and attomeys-in-fact to act for and in Executive's behalf and instead of Executive, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Executive; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest. (f) Without limiting the generality of any other provision of this Section 3, Executive hereby authorizes the Company and each of its Affiliates (and their respective successors) to make any desired changes to any part of any Invention, to combine it with other materials in any manner desired, and to withhold Executive's identity in connection with any distribution or use thereof alone or in combination with other materials. (g) Pursuant to the Illinois Executives' Patent Act, Public Act 83-493, this Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of Parent or the Company was used and which was developed entirely on Executive's own time, unless (1) the invention relates (a) to the business of Parent or the Company or (b) to Parent's or the Company's actual demonstrably anticipated research or development; or (2) the invention results from any work performed by Executive for Parent or the Company. (h) The obligations of Executive set forth in this Section 3 (including, but not limited to, the assignment obligations) will continue beyond the termination of Executive's employment with respect to Inventions conceived or made by Executive alone or in concert with others during Executive's employment with the Company and during the one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Executive and Executive's executors, administrators and other representatives. 4. List of Prior Inventions. All Inventions which Executive has made prior to employment by the Company are excluded from the scope of this Agreement. As a matter of record, Executive has set forth on Annex I hereto a complete list of those Inventions which aright relate to Parent's or the Company's business and which have been made by Executive prior to employment with the Company. Executive represents that such list is complete. If no list is attached, Executive represents that there are no prior Inventions. B-3 Non-Solicitation. (a) Executive will not, during the term of Executive's employment with the Company and for two (2) years thereafter (the "Restricted Period"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity: i. employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, an employee of Parent, the Company or any of their Affiliates or otherwise seek to adversely influence or alter such individual's relationship with Parent, the Company or any of their Affiliates; or ii. explicitly solicit or encourage any individual or entity that is, or was during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, a customer or vendor of Parent or the Company to terminate or otherwise alter his, her or its relationship with Parent or the Company. (b) The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of this Section 5. 6. Equitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 5 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they art: able to prove. No Right to Employment. No provision of this Agreement shall give Executive any right to continue in the employ of the Company or any of its Affiliates, create any inference as to the length of employment of Executive, affect the right of the Company or its Affiliates to terminate the employment of Executive, with or without cause, or give Executive any right to participate in any Executive welfare or benefit plan or other program of the Company or any of its Affiliates. 8. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement B-4 will be deemed to have been waived, except by written instrutnent of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 9. Severabilitv. Executive acknowledges that the agreements and covenants contained in this Agreement are essential to protect Parent, the Company and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. It is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. 10. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner. Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 B-5 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 10. 11. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement. 12. Governing Law. This Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. 13. Binding Effect. This Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement provided that the Company will remain liable to Executive should such assignee fail to perform its obligations under this Agreement. 14. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. B-6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has signed this Agreement, as of the date written below. EXECUTIVE: Date: February, 2002 John . Stone , r. AMES TRUE TEMPER, INC, Its: B-7 Exhibit A Separation Agreement and General Release I? Doc N:CM02(215494-00001) 60095882v2:08/14/2007,lime:16:21 SEPARATION AGREEMENT AND GENERAL F'.ELEASE AMES TRUE TEMPER, INC. ("Company"), and JOHN M. STONER, JP ("Executive', agree that this Separation Agreement and General Release ("Agreement") sets forth their complete agreement and understanding regarding the termination of Executive's employment with Company. 1. Separation Date. Executive's employment with Company will terminate effective August 24, 2002 (the "Separation Date"). Executive agrees to return all Company property to Company no later than the Separation Date. Except as specifically provided below, Executive shall not be entitled to receive any benefits of employment following the Separation Date. 2. Consideration of Comnanv. In consideration for the releases and covenants by Executive in this Agreement, Company will provide Employee with the following: (i) payment of twelve (12) months of salary at Employee's current annual rate of Two Hundred Sixty Thousand Dollars ($260,000.00), less applicable withholdings, payable at regular payroll intervals following the Revocation Period, as set forth in paragraph I1 below; (ii) payment of the Employer portion of Employee's premiums for continued coverage under Employer's group health care plan and dental plan until August 24, 2003, if Employee elects, and to the extent Employee is and remains eligible for, such continued cove OBRA; and (iii) a pro rated bonus for the period --? commencing October 1, 389 vata codt>li2rag through August 24, 2002, less applicable withholdings, which bonus shall be paid at the Company's regular bonus payment date in accordance with the Company's standard bonus payment procedures. 3. Executive Release of Rights. Executive (defined for the purpose of this Paragraph 3 as Executive and Executive's agents, representatives, attorneys, assigns,, heirs, executors, and administrators) releases the Released Parties (defined as the Company, Parent and any of their past or present employees, agents, insurers, attorneys, administrators, officials, directors, shareholders, divisions, parents, subsidiaries, predecessors, successors, employee benefit plans, and the sponsors, fiduciaries, or administrators of the Company's employee benefit plans) from any and all liability, claims, demands, actions, causes of action, suits, grievances, debts, sums of money, agreements, promises, damages, back and from pay, costs, expenses, attorneys' fees, and remedies of any type, arising or that may have arisen out of or in connection with Executive's employment with or termination of employment from the Company, from the beginning of time to the date hereof, including but not limited to claims, actions or liability under: (1) Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Workers' Adjustment and Retraining Notification, the Employee Retirement Income Security Act of 1974, and the Illinois Human Rights Act; (2) any other federal, state or local statute, ordinance, or regulation regarding employment, termination of employment, or discrimination in employment, and (3) the cottmton law of ,my state relating to employment contracts, wrongful discharge, defamation, or any other matter. 4. Waiver of Reinstatement. Executive waives any reinstatement or future employment with Company and agrees never to apply for employment or otherwise seek to be Dm-c1902 (215994 ODW 0 60099155v3,o9/16rz0071f= 15:45 hired, rehired, employed, re-employed, or reinstated by Company or any of its affiliated companies or corporations. 1 5. No Dispar emern or Encouragement of Claims. Executive agrees not to make any oral or written statement that disparages or place Parent or the Company in a false or negative light. Executive further agrees not to encourager assist any person who files a lawsuit, charge, claim or complaint against the Released Parties (as defined in Paragraph 3) unless Executive is required to render such assistance pursuant to a lawful subpoena or other legal obligation. The Board of Directors (and each of its individual members) and the Chief Executive Officer of the Company agree not to make ( t "5 Y o ( o written statement that disparages or places Executive in a false or negative light; and these individuals finther agree not to encourage or assist any person who files a lawsuit, charge, claim or complaint against Executive unless such individuals are required to render such assistance pursuant to a lawful subpoena or other legal obligation. b. Cooperation of Executive. Executive agrees to cooperate with Company in any reasonable manner as Company may request, including but not limited to fiunishing information to and otherwise consulting with the Company; and assisting Company in any litigation or potential litigation or other legal matters, including but not limited to meeting with and fully answering the questions of Company or its representatives or agents, and testifying and preparing to testify at any deposition or trial. Company agrees to compensate Executive for any reasonable out of pocket expenses incurred as a result of such cooperation. 7. Non-admission/Inadmissibility. This Agreement does not constitute an admission by Company that any action it took with respect to Executive was wrongful, unlawful or in violation of any local, state, or federal act, statute, or constitution, or susceptible of inflicting any damages or injury on Executive, and Company specifically denies any such -wrongdoing or violation This Agreement is entered into solely to resolve fully all matters related to or arising out of Executive's employment with and termination from Company, and its execution, and implementation may not be used as evidence, and shall not be admissible in a subsequent proceeding of any kind, except one alleging a breach of this Agreement. 8. Severability. The provisions of this Agreement shall be severable and the invalidity of any provision shall not affect the validity of the other provisions. 9. Governing Law. Tbis Agreement shall be governed by and construed in accordance with laws and judicial decisions of the Commonwealth of Pennsylvania, without regard to its principles of conflicts of laws. 10. Scope of Agreement. Executive understands that he remains bound to those provisions in the Confidentiality, Inventions, and Non-Soficitation Agreement and his Amended and Restated Employment Agreement (the "Employment Agreement"), both signed in February 2002, which survive the termination of his employment, including those provisions in Paragraphs 8-11 and 13 of the Employment Agreement, as such provisions have been modified by that certain Doc #:CM02 (21549400001) 60099155v3;08/14Q002?i.0:15:45 Bonus Payment and Non-Compete Extension dated as of August 14, 2002. Except as specifically set forth in such provisions, this Agreement contains the entire agreement and understanding between Executive and Company concerning the matters described herein, and supersedes all prior agreements, discussions, negotiations, understandings and proposals of the parties. The terms of this Agreement cannot be changed except in a subsequent document signed by both parties. 11. Revocation Period. Executive has the right to revoke this Agreement for up to seven days after he signs it. In order to revoke this Agreement, Executive must sign and send a written notice of the decision to do so, addressed to Richard Dell, Chief Executive Officer of the Company at 465 Railroad Avenue, Camp Hill, PA 17011, and that written notice must be received by Company no later than the eighth day after Executive signed this Agreement. If Executive revokes this Agreement, Executive will not be entitled to any of the consideration from Company described in paragraph 2 above. 12. yohmtm Execution of Agreement. Executive acknowledges that: a. Executive has carefully read this Agreement and fully understands its meaning; b. Executive had the opportunity to take up to 21 days after receiving this Agreement to decide whether to sign it; C. Executive understands that the Company is hereby advising him, in writing, to consult with an attorney before signing it; d. Executive is signing this Agreement, knowingly, voluntarily, and without any coercion or duress; and e. everything Executive is receiving for signing this Agreement is described in the Agreement itself, and no other promises or representations have been made to cause Executive to sign it. AMES TRUE TEMPER, PIC. By, -r-?y---y.-- Jo . St ner Title: ? .EGA Dated: S-19-00 Dated: O - ZZ -6 3 Doc#:CM02(2154944 201?60089155v3;0Bl74200WriM: 15;45 ?x?? ? ?? 3 AMENDED AND RESTATED EMPLOYMENT AGREEMENT This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Employment Agreement") is made this 28'h day of June, 2004 by and between Ames True Temper, Inc., a Delaware corporation (the "Company"), at?o Judy A. Schuchart ("Executive"), WHEREAS, the Company and its subsidiaries are engaged in the business of (i) manufacturing, marketing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, pots and planters, snow tools, lawn carts, repair handles, garden hoses, and decorative accessories for the lawn and garden, and (ii) conducting such, other activities as are undertaken from time to time by the Company and each of its Affiliates, as defined in Section 9(f), as a result of future acquisitions, or otherwise; WHEREAS, Executive entered into that certain Employment Agreement as of February 28, 2002 (the "Old Employment Agreement") with the Company; WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, as the CFO of the Company, in accordance with the terms and conditions set forth herein; and WHEREAS, the Company and Executive each desire that the Old Employment Agreement be amended and restated in its entirety as set forth in this Employment Agreement and that this Employment Agreement supercede the Old Employment Agreement, and all other agreements with respect to the subject matter hereof. NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises in this Employment Agreement, the parties agree as follows: 1. Emplovment. The Company hereby agrees to continue to employ Executive as CFO of the Company, and Executive hereby agrees to accept such employment and agrees to act as CFO of the Company, all in accordance with the terms and conditions of this Employment Agreement. Executive hereby represents and warrants that neither Executive's entry into this Employment Agreement nor Executive's performance of Executive's obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation of any nature to which Executive is a party or by which Executive is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement entered into by Executive. 2. Term of Employment and Automatic Renewal. The term of Executive's employment under this Employment Agreement will commence on the date of this Employment Agreement and will continue until the third (3rd) anniversary of the date of this Employment Agreement (the "Initial Employment Period"). THE INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL EMPLOYMENT PERIOD (AS DEFINED HEREIN) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS 9667=09.2 1 (EACH, A "RENEWAL EMPLOYMENT PERIOD"), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT PERIOD, AS THE CASTE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial Employment Period and the Renewal Employment Periods are hereinafter referred to as the "Employment Period." For purposes of this Employment Agreement, any notice of termination electing not to renew this Employment Agreement pursuant to this Section 2 shall be deemed: (i) a termination without Due Cause pursuant to Section 9(d) if such notice is delivered by the Company; or (ii) a voluntary resignation without Good Reason pursuant to Section 9(e) if such notice is delivered by Executive. Notwithstanding anything to the contrary contained herein, the Employment Period is subject to termination pursuant to Section 9 below. 3. Position and Responsibilities. Executive shall report to and be subject to the direction of the CEO of the Company. Executive shall perform and discharge such duties and responsibilities for the Company as the CEO may from time to time reasonably assign Executive. Executive understands and acknowledges that such duties shall be ;subject to revision and modification by the Chief Executive Officer and/or the Board of Advisors (the "Board") of CHATT Holdings LLC ("CHATT" ), as appropriate, upon reasonable notice to Executive. During the Employment Period, Executive shall devote Executive's full business time, attention, skill and efforts to the faithful performance of Executive's duties herein, and shall perform the duties and carry out the responsibilities assigned to Executive, to the best of Executive's ability, in a diligent, trustworthy and businesslike manner for the purpose of advancing the Company. Executive acknowledges that Executive's duties and responsibilities will require Executive's full- time business efforts and agrees that during the Employment Period, Executive will not engage in any outside business activities that conflict with the Executive's obligations under this Employment Agreement. 4. Compensation. (a) Base Salary. During the Employment Period, the Company shall pay to Executive a minimum base salary at the rate of $180,180 per year (the "Base Salary"), less applicable tax withholding, subject to increase from time to time, solely at the Company's discretion, payable at the Company's regular employee payroll intervals. Executive's performance shall be reviewed annually and the Base Salary may be increased at the Company's sole discretion. (b) Discretionary Bonus. During the Employment Period, Executive shall be eligible to receive a cash bonus based upon the achievement of certain budgeted performance goals pursuant to a program approved by the Board; provided, that, notwithstanding the foregoing, for fiscal year 2004, Executive shall be eligible to receive a cash bonus based upon budgeted performance goals which are substantially similar to the goals approved by the Company prior to such fiscal year. Executive shall also be eligible to receive additional bonuses, in such amounts, if any, as determined by the Board in its sole discretion based upon the achievement of performance goals and objectives approved by the Board. (c) Stock. Pursuant to that Subscription Agreement (the "Subscription Agreement") entered into between CHATT and Executive, Executive purchased certain Class B units of CHATT, which Class B units shall be subject to certain vesting, repurchase and other 9647509.2 obligations and restrictions set forth in the Subscription Agreement 5, Benefit Plans. During the Employment Period, Executive will be entitled to receive traditional employment benefits comparable to (i) those benefits provided to other senior executive officers of the Company (subject to any applicable we.iting periods, eligibility requirements, or other restrictions), which may include insurance (medical, dental, life, disability, directors and officers, etc.), retirement plans,, ?nd profit sharing plans; and (ii) the benefits provided to the Executive immediately prior to th? Effective Date. Notwithstanding the foregoing, the Company may, at any time or from time to time, amend, modify, suspend or terminate any benefit plan or program contemplated hereunder in this Section 5 for any reason and without the Executive's prior written; provided that such amendment, modification, suspension or termination does not disproportionately impact the Executive as compared to the other participants under such plan or program. 6. Expenses. The Company, in accordance with policies and practices established by the Board from time to time, will pay or reimburse Executive for all expenses (including travel and cell phone expenses) reasonably incurred by Executive during, the Employment Period in connection with the performance of Executive's duties under this Employment Agreement, provided that Executive shall provide to the Company documentation or evidence of expenses for which Executive seeks reimbursement in accordance with the policies and procedures established by the Board from time to time. 7, Vacation. Executive shall be entitled to vacation at the rate of 4 weeks per year in accordance with the Company's vacation policy. Executive shall make good faith efforts to schedule vacations so as to least conflict with the conduct of the Company's business and will give the Company adequate advance notice of Executive's planned absences. Up to half of Executive's unused vacation time may be carried over to subsequent years; provided, however, that in no event shall Executive be entitled to greater than 6 weeks vacation per year. g. Confidentiality Inventions Non-Competition and Non.- Solicitation-Agreement. As of the date hereof, Executive shall have entered into a confidentiality, inventions, non-competition and non-solicitation agreement, in the form of Exhibit A attached hereto and made a part hereof (the "Confidentiality, Inventions, Non- Competition and Non-Solicitation Agreement"). 9. Termination. (a) Death. The Employment Period will terminate immediately upon the death of Executive. If the Employment Period is terminated pursuant to this Section 9(a), the Company shall have no further obligation to Executive (or the Executive's estate) except for salary and benefits accrued through the date of termination, and except as otherwise described in the Subscription Agreement. (b) Due Cause. The Company may terminate the Employment Period immediately upon written notice to Executive for a material breach of this Employment Agreement by Executive. The following events constitute the exclusive list of events that will be deemed a material breach of this Employment Agreement (each of which shall constitute "Due Cause"): 9667509.2 (i) Executive's material breach of any of Executive's obligations under the Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement; this Employment Agreement; the ;Subscription Agreement; the Amended and Restated Unitholders Agreement of CHATT, dated as of June 28, 2004, as in effect from time to time (the "Unitholders Agreement"); or the Limited Liability Company Agreement of CHATT, dated as of June 28, 2004, by and among the parties thereto, as in effect from time to time (the "LLC Agreement"); or (ii) Executive's continued and deliberate neglect of, willful misconduct in connection with the performance of, or refusal to perform Executive's duties in accordance with Section 3 of this Employment Agreement, which, in the case of neglect or failure to perform, has not been cured within thirty (30) days after Executive has been provided notice of the same; or (iii) Executive's engagement in any conduct which injures the integrity, character, financial position or financial performance of the business or reputation of the Company or which impugns Executive's own integrity, character or reputation so as to cause Executive to be unfit to act in the capacity of CFO of the Company; or (iv) the Board's good faith determination that Executive has committed an act or acts constituting a felony, or other act involving dishonesty, disloyalty or fraud against the Company. If the Employment Period is terminated pursuant to this Section 9(b), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in the Subscription Agreement. (c) Permanent Disability. The Company may terminate the Employment Period upon the Permanent Disability (as defined below) of the Executive. If the Employment Period is terminated pursuant to this Section 9(c), then Executive will be entitled to receive the Executive's salary and benefits accrued through the date of tennination and such benefits, if any, as may be provided Executive pursuant to the Company's disability insurance policy. Except as set forth in the immediately preceding sentence and as otherwise described in the Subscription Agreement, if the Employment Period is terminated pursuant to this Section 9(c), the Company shall have no further obligation to Executive. For purposes of this Employment Agreement, the term "Permanent Disability" shall mean that, pursuant to applicable law, Executive is unable to perform, with or without reasonable accommodation, by reason of physical or mental incapacity, the essential functions of the Executive's position for one hundred fifty (150) or more days in any one hundred eighty (180) day period. The Board shall determine, according to the facts then available, whether and when a Permanent Disability has occurred. Such determination shall not be arbitrary or unreasonable. (d) Termination by the Company without Due Cause. The Company may terminate the Employment Period without Due Cause upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 9(d), then Executive will be entitled to receive as severance pay the Executive's Base Salary plus benefits (at the same cost to 9667509.? 4 the Executive as in effect immediately prior to such termination of employment) for a period of twenty-four (24) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement. Except as set forth in the first sentence of this Section 9(d) and as otherwise described in the Subscription Agreement, if the Employtl? nt Period is terminated pursuant to this Section 9(d), the Company shall have no further obliga on to Executive.' (e) Voluntary Resignation by Executive. Executive may terminate' the Employment Period at any time for any reason upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 9(e), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement; provided, however, that if Executive is terminating the Employment Period for Good Reason (as defined below), then Executive will be entitled to receive as severance pay the Executive's Base Salary plus benefits (at the same cost to the Executive as in effect immediately prior to such termination of employment) for a period of twenty-four (24) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement. The following events will be deemed "Good Reason" for which Executive may terminate the Employment Period and receive the severance payments set forth in this Section 9(e): (i) a material diminution of the Executive's responsibilities after notice to the Company and a thirty (30) day opportunity to cure; or (ii) any material breach of this Employment Agreement on the part of the Company (including, but not limited to, any decrease in the Base Salary without the consent of the Executive or relocation of Executive's place of employment to a location that is greater than fifty (50) miles from the Harrisburg, Pennsylvania metropolitan area), after notice to the Board, and a thirty (30) day opportunity to cure; provided, however, that Executive is not in material breach of any of the terms of this Employment Agreement. (f) General Release. The receipt of any severance payment as set forth in Sections 9(c)-(e) above shall be contingent upon Executive's execution of a general release of all claims against the Company and its Affiliates (as defined below), substantially in the form attached hereto as Exhibit B. For purposes of this Employment Agreement, the term "Affiliates" means all persons or entities that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Company, all companies or entities in which the Company owns an equity interest, and all predecessors, successors and assigns of such affiliates. (g) Mitigation. Notwithstanding anything herein to the contrary, to the extent Executive obtains employment at any time during the entire twenty-four (24) months of the severance period, the Company's severance obligations under this Employment Agreement, including, without limitation, the continuation of Executive's benefits hereunder, shall be reduced by the amount of any compensation or benefits received (or accrued) by the Executive, including without limitation any equity or other incentive compensation and any bonus, under 9667509.2 such new employment arrangement. Executive agrees that if Executive accepts other employment at any time during the entire twenty-four (24) months of the severance period, Executive shall notify the Company in writing within two (2) business clays of such acceptance. Executive acknowledges that the Executive's failure to abide by this provision shall entitle the Company to recoup all severance pay previously paid to Executive pursuant to this Employment Agreement. (h) Survival. Termination of the Employment Period in accordance with this Section 11, or expiration of the Employment Period, will not affect the provisions of this Employment Agreement that survive such termination, including without limitation, the provisions in the Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement and will not limit either party's ability to pursue remedies at law or equity. 10. Attornev's Fees. If either party prevails in a legal action to enforce or protect its rights under this Employment Agreement, then that party shall be entitled to recover reasonable attorneys' fees, costs, and expenses, in addition to all other relief, including but not limited to damages and injunctive relief. The Company shall reimburse the Executive for the Executive's reasonable attorneys fees and costs incurred with respect to the negotiation and execution of (a) the amendment and restatement of this Agreement; (b) the Subscription Agreement; (c) the Amended and Restated Operating Agreement of CHATT; (d) the Amended and Restated Unitholders Agreement of CHATT; and (e) the Registration Rights Agreement by and among CHATT, Castle Harlan Partners IV, L.P. and each executive or employee signatory thereto. 11. Executive Assistance. Both during and for two years after Executive's employment with the Company, Executive shall, upon reasonable notice, furnish the Company with such information as may be in Executive's possession or control, and cooperate with the Company, as the Company may reasonably request (with due consideration to Executive's business activities and obligations after the Employment Period), in connection with any litigation, claim, or other dispute in which the Company or any of its Affiliates is or may become a party. The Company shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in fulfilling Executive's obligations under this Section 11. In addition, to the extent that the Executive provides such assistance at any time afler six months from the date that Executive's employment with the Company has terminated, and Executive is required to be absent from employment for one or more days in order to provide such assistance, the Company shall pay the Executive for each such day an amount equal to the daily rate of the Executive's Base Salary as in effect as of the date of termination. 12. Effect of Prior Agreements. This Employment Agreement, the Subscription Agreement, the Confidentiality, hrventions, Non-Competition and Non-Solicitation Agreement, the Unitholders Agreement and the LLC Agreement contain the entire understanding among the Company, CHATT and Executive relating to the subject matter hereof and supersede any prior employment agreement between Executive, ATT Holding Co., and the Company, including, without limitation, the Old Employment Agreement, or other agreement relating to the subject matter hereof between ATT Holding Co., the Company and Executive. 13. Modification and Waiver. This Employment Agreement may not be modified or amended, nor may any provisions of this Employment Agreement be waived, except by an instrument in writing signed by the parties. No written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate: only as to the specific 9667509.2 term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 14. S_everability. If, for any reason, any provision of this Employment Agreement is held invalid, such invalidity will not affect any other provision of this Employment Agreement, and each provision will to the full extent consistent with 14W continue in full force and effect. If any provision of this Employment Agreement is held invh$id in part, such invalidity will in no way affect the rest of such provision, and the rest of such provision, together with all other provisions of this Employment Agreement, will, to the full extent consistent with law, continue in full force and effect. 15. Notices. Any notice, consent, waiver and other communications required'or permitted pursuant to the provisions of this Employment Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Castle Harlan, Inc. 150 East 581h Street New York, New York 10155 Attn: Justin Wender Fax: (212) 207-8042 With a copy to: Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attn.: Marc Weingarten, Esq. Fax: (212) 593-5955 If to Executive: Judy A. Schuchart 763 Franklin Church Road Dillsburg, PA 17019 (717) 303-2576 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 15. 16. Third Partv Beneficiaries. Nothing herein expressed or :implied is intended or shall be construed to confer upon or give to any person or entity, other than the parties to this 9667509.2 Employment Agreement and their respective permitted successors and assigns, any rights or remedies under or by reason of this Employment Agreement. 17. Headings. The headings and other captions in this Employment Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Employment Agreement. 18. Governing Law; Arbitration. This Employment Agreement has been executed in the State of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. Except for disputes arising out of an alleged violation of the covenants set forth in the Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. The arbitration process shall be instigated by either party giving written notice to the other of the desire for arbitration and the factual allegations underlying the basis for the dispute. The arbitration shall be conducted by such alternative dispute resolution service as is agreed to by the parties, or, failing such agreement within thirty (30) days after such dispute arises, by arbitrators selected as described below in accordance with the rules and procedures established by the American Arbitration Association. Only a person who is a practicing lawyer admitted to a state bar may serve as an arbitrator. Each party shall select one arbitrator, and those arbitrators shall choose a third arbitrator; these arbitrators shall constitute the panel. The American Arbitration Association rules for employment arbitration shall control any discovery conducted in connection with the arbitration. The expenses of arbitration (other than attorneys' fees) shall be shared as determined by arbitration. Each side to the claim or controversy shall pay their own attorneys' fees. Any result reached by the panel shall be binding on all parties to the arbitration, and no appeal may be taken. It is agreed that any party to any award rendered in such arbitration proceeding may seek a judgment upon the award and that judgment may be entered thereon by any court having jurisdiction. The arbitration shall be conducted in the State of Pennsylvania. 19. Non-AssignabilitvBinding Effect. This Employment Agreement shall not be assignable by either party without the prior written consent of the other party. This Employment Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. 20. No Strict Construction. The language used in this Employment Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. [Remainder of Page Intentionally Blank; Signature Page to Follow] 9667509.2 KWITNESS WHEREOF, the Company has caused his Employment Agreement to be executed by its duly authorized officer and Executive has signed this Employment Agreement, as of the date first above written. AMES TRUE TEMPER, INC, B5 i. f EXECUTIVE 9663544.5 9 EXHIBIT A CONFIDENTIALITY, INVENTIONS, NON-COMPETITION AND NON-SOLICITATION AGREEMENT This Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement (the "Agreement") is entered into this _ day of 2004 by and between CHATT Holdings LLC, its successors or assigns (the "Company") and Judy A. Schuchart (the "Executive"). This Agreement sets forth the entire agreement between the parties hereto concerning the subject matter hereof and supersedes all prior agreements and understandings concerning the subject matter hereof, In consideration of employment by the Company and/or its Affiliates (as defined in Section 2(b) below) of Executive, which Executive acknowledges to be good and valuable consideration for the Executive's obligations hereunder, the Company and Executive agree as follows: The Business. Executive acknowledges that the Company and its Affiliates are engaged in the business of (i) manufacturing, marketing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, pots and planters, snow tools, lawn carts, repair handles, garden hoses, and decorative accessories for the lawn and garden, and (ii) conducting such other activities as are undertaken (or are proposed or contemplated to be undertaken) from time to time by the Company and each of its Affiliates as a result of future acquisitions or otherwise (collectively, the "Business"). 2. Confidential Information. (a) Executive acknowledges that the Confidential Information (as defined below) constitutes a protectible business interest of the Company and its Affiliates, and covenants and agrees that at all times during the period of Executive's employment, and at all times after termination of such employment, Executive will not, directly or indirectly, disclose, furnish, make available or utilize any Confidential Information other than in the course ofperfonning duties as an employee of the Company and/or its Affiliates. Executive will abide by Company policies and rules as may be established from time to time by it for the protection of its Confidential Information. Executive agrees that in the course of employment with the Company, Executive will not bring to the Company's offices or use, disclose to the Company, or induce the Company to use, any confidential information or documents belonging to others. Executive's obligations under this Section 2(a) with respect to Confidential Information will survive termination of Executive's employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes generally known to the public other than through a breach of Executive's obligations under this Agreement. 9667509.2 A-1 (b) As used in this Agreement, the term "Confidential Information" means any and all confidential, proprietary or trade secret information, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is conoeived or developed by Executive, applicable to or in any way related to; (i) the present or future business of the Company or any of its Affiliates (as defined J' low); (ii) the research and development of the Company or any of its Affiliates; or (iii) the business of any client, vendor, supplier or distributor of the Company or any of its Affiliates. Such Confidential Information includes the following property or information of the Company and its Affiliates, by way of example and without limitation, trade secrets, processes, formulas, data, program documentation, customer lists, designs, drawings, algorithms, source code, object code, know-how, improvements, inventions, licenses, techniques, all plans or strategies for marketing, development and pricing, business plans, financial statements, profit margins and all information concerning existing or potential clients, suppliers or vendors. Confidential Information also means all similar information disclosed to the Company or any Affiliate by third parties which is subject to confidentiality obligations. The term "Affiliates" means (i) all persons or entities controlling, controlled by or under common control with the Company, (ii) all companies or entities in which the Company owns an equity interest and (iii) all predecessors, successors and assigns of the those Affiliates identified in (i) and (ii). Return of Materials. Upon tenmination of employment with the Company, and regardless of the reason for such termination, Executive will leave with, or promptly return to, the Company all documents, records, notebooks, magnetic tapes, disks or other materials, including all copies, in Executive's possession or control which contain Confidential Information or any other information concerning the Company, any of its Affiliates or any of their respective products, services or clients, whether prepared by the Executive or others. Notwithstanding the foregoing, Executive shall be entitled to retain the Executive's personal effects provided any Confidential Information is removed therefrom. 4. Inventions as Sole Property of the Company. (a) Executive covenants and agrees that all Inventions (as defined below) shall be the sole and exclusive property of the Company. (b) As used in this Agreement, the term "Inventions" means any and all inventions, developments, discoveries, improvements, works of authorship, concepts or ideas, or expressions thereof, whether or not subject to patents, copyright, trademark, trade secret protection or other intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice, conceived or developed by Executive while employed with the Company and/or any Affiliate of the Company or within one (1) year following termination of such employment which relate to or result from the actual or anticipated business, work, research or 9667509.2 A-2 investigation of the Company or any of its Affiliates or which are suggested by or result from any task assigned to or performed by Executive for the Company or any of its Affiliates. (c) Executive acknowledges that all original works of authorship which are made by the Executive (solely or jointly) are works made for hire under the United States Copyright Act (17 U.S.C., et seq.). (d) Executive agrees to promptly disclose to the Company all Inventions, all original works of authorship and all work product relating thereto. This disclosure will include complete and accurate copies of all source code, object code or machine- readable copies, documentation, work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence or results (collectively, "Tangible Embodiments") of such Inventions, works of authorship and work product. All Tangible Embodiments of any Invention, work of authorship or work product related thereto will be deemed to have been assigned to the Company as a result of the act of expressing any Invention or work of authorship therein. (e) Executive hereby assigns to the Company (together with the right to prosecute or sue for infringements or other violations of the same) the entire worldwide right, title and interest to any such Inventions or works made for hire, and Executive agrees to perfonn, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company's expense, in registering, recording, obtaining, maintaining, defending, enforcing and assigning Inventions or works made for hire in any and all countries. Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agents and attorneys-in-fact to act for and on Executive's behalf and instead of Executive, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Executive; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest. (f) Without limiting the generality of any other provision of this Section 4, Executive hereby authorizes the Company and each of its Affiliates (and their respective successors) to make any desired changes to any part of any Invention, to combine it with other materials in any manner desired, and to withhold Executive's identity in connection with any distribution or use thereof alone or in combination with other materials. (g) This Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of the Company or any Affiliate was used and which was developed entirely on Executive's own time, unless (1) the invention relates (a) to the business of the Company or any Affiliate or (b) to the Company's or any Affiliate's actual demonstrably anticipated research or development; or (2) the invention results from any work performed by Executive for the Company or any Affiliate. 9667309?2 A-3 (h) The obligations of Executive set forth in this Section 4 (including, but not limited to, the assignment obligations) will continue beyond the termination of Executive's employment with respect to Inventions conceived or made by Executive alone or in concert with others during Executive's employment y6th the Company and during the one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations p ,ill be binding upon Executive and Executive's executors, administrators aW oii?er representatives. List of Prior Inventions. All Inventions which Executive has made prior to employment by the Company or any Affiliate (including without limitation Ames True Temper, Inc.) are excluded from the scope of this Agreement. As a matter of record, Executive has set forth on Annex I hereto a complete list of those Inventions which might relate to the Company's Business and which have been made by Executive prior to employmentwith the Company. Executive represents that such list is complete. If no list is attached, Executive represents that there are no prior Inventions. 6. Non-Competition. (a) Executive acknowledges that: (i) the Company and its Affiliates are and will be engaged in the Business during the term of the Executive's employment and thereafter; (ii) the Company and its Affiliates are and will be actively engaged in the Business throughout the world; (iii) Executive is one of a limited number of persons who will be developing the Business; (iv) Executive has and will continue to occupy a position of trust and confidence with the Company after the date hereof and during the term of the Executive's employment ]Executive will become familiar with the Company's (and its Affiliates') trade secrets and with other proprietary and confidential information concerning the Company (and its Affiliates) and the Business; (v) the agreements and covenants contained in this Agreement are essential to protect the Company, its Affiliates and the goodwill of the Business and are a condition precedent to the sale by the Company to Executive of certain Common Units, pursuant to the Subscription Agreement between the parties, dated as of the date hereof, and the participation in the exchange of equity held by Executive for strips of common and preferred units of the Company pursuant to the Equity Term Sheet, dated June 1, 2004; (vi) Executive's employment with the Company and/or its Affiliates has special, unique and extraordinary value to the Company and its Affiliates and the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Section 6; and (vii) Executive has means to support Executive and Executive's dependents other than by engaging in the Business, and the provisions of this Section 6 will not impair such ability. (b) Executive will not, during the Restricted Period (as defined below), anywhere in the world (the "Restricted Territory"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, 96675091 A-4 consultant, or otherwise) own, operate, manage, control, invest in, perform services for, or engage or participate in any manner in, or render services to (alone or in association with any person or entity) or otherwise assist any person or entity that engages in, or owns, invests in, operates, manages or controls any venture or enterprise that engages in, the Business. The term "Restricted Period" means the period of time from the date of the closing of the purchase and sale of shares, pursuant to the Stock Purchase Agreement by and among ATT Holding Co., the Shareholders of ATT Holding Co., the Warrantholders of ATT Holding Co., Wind Point Investors V, L.P., CHATT Holdings, Inc., and the Company, dated June 1, 2004, until two (2) years after the termination for any reason of Executive's employment relationship with the Company and/or any Affiliate or any successor thereto (including any termination based on non-renewal of any employment agreement or arrangement). The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of this Section 6. Nothing contained in this Section 6 shall be construed to prevent Executive from investing in the stock of any competing corporation I isted on a national securities exchange or traded in the over-the-counter market, but only if Executive is not involved in the business of said corporation and if Executive and Executive's associates (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of one percent (1%) of the stock of such corporation. (c) Scope/Severability. The parties acknowledge that the business of the Company and its Affiliates is and will be national and international in scope and thus the covenants in this Section 6 would be ineffective if the covenants were to be limited to a particular geographic area. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants set forth in this Section 6 not fully enforceable, the other provisions of this Section 6, and this Agreement in general, will nevertheless stand and, to the full extent consistent with law, continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Period be deemed to be the longest period permissible by law, but not in excess of the length provided for in Section 6(b), and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances but not in excess of the territory provided for in Section 6(b)). 96675092 A-5 Non-Solicitation. (a) Executive will not, during the Restricted Period, directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director,, employee, independent contractor, consultant, or otherwise) with or through any individual or entity: t i1 L employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of Executive's employment with the Company and/or any Affiliate for any reason, an employee of the Company or any of its Affiliates or otherwise seek to adversely influence or alter such individual's relationship with the Company or any of its Affiliates; or ii. solicit or encourage any individual or entity that is, or was during the twelve-month period immediately prior to the termination of Executive's employment with the Company or any Affiliate for any reason, a customer, supplier or vendor of the Company or any Affiliate to terminate or otherwise alter his, her or its relationship with the Company or any Affiliate. (b) The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of this Section 7. Equitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of the Company's and its Affiliates' business interests, that irreparable injury will result to the Company and its Affiliates if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, the Company and its Affiliates will have no adequate remedy at laws. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, the Company and its Affiliates will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 8 will be construed as prohibiting the Company or any Affiliate from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 9. Breach. (a) Executive's breach of any of the Executive's obligations under this Agreement will be deemed a material breach of any employment agreement or arrangement Executive has with the Company or any of its Affiliates and will constitute cause or due cause or the like for termination by the Company and/or its Affiliates, as appropriate. 9667509.2 A-6 (b) In the event that the Company and/or its Affiliates, as appropriate, terminates Executive without cause or due cause or the like or Executive voluntarily resigns, Executive will receive severance payments, to the extent entitled under any employment agreement or arrangement, only if Executive is not in breach of any of the provisions in this Agreement. 10. No Right to Employment. No provision of this Agreement shall give Executive any right to continue in the employ of the Company or any of its Affiliates, create an), inference as to the length of employment of Executive, affect the right of the Company or its Affiliates to terminate the employment of Executive, with or without cause, or give Executive any right to participate in any welfare or benefit plan or other program of the Company or any of its Affiliates. 11. Modification and Waiver. This Agreement may not be modified or amended or terminated except by an instrument in writing signed by the parties. No term or condition of this Agreement will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 12. Severability. Executive acknowledges that the agreements and covenants contained in this Agreement are essential to protect the Company and its Affiliates and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. It is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. 13. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: 9667509.2 A_7 If to the Company: CHATT Holdings LLC c/o Castle Harlan, Inc. 150 East 58`n Street New York, New York 10155 11 Attn: Justin Wender Fax: (212) 207-8042 With a copy to: Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 Attn.: Marc, Weingarten, Esq. Fax: (212) 593-5955 If to Executive: Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 13. 14. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement. 15. Governing Law. This Agreement has been executed in the State of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. 16. Binding Effect. This Agreement will be binding, upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns; provided, however, that Executive may not assign this Agreement or any part hereof. 17. Survival. The provisions in this Agreement shall survive the termination of Executive's employment with the Company. 18. Compliance. 96675091 A-8 In order to monitor compliance with the terms of this Agreement, Executive agrees to give written notice, including a pertinent description, to the Company of each position of employment, ownership of more than one percent (1%) of the stock of any corporation, participation with another entity or organization (except for religious institutions or charitable organizations not related to the Business) which Executive obtains during the Restricted Period. 19. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. 9667509.2 A-9 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has signed this Agreement, as of the date written below, EXECUTIVE: 1 Judy Schuchart Date: June. 2004 Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement EXHIBIT B SEPARATION AGREEMENT AND GENERAL RELEASE AMES TRUE TEMPER, INC. ("Company"), and Judy A. Schuchart ("Executive"), agree that this Separation Agreement and General Release ("Agreement") sets forth their complete agreement and understanding regarding the termination of Executive's employment with Company. 1. Separation Date. Executive's employment with Company will terminate effective (the "Separation Date"). Executive agrees to return all Company property to Company no later than the Separation Date. Except as specifically provided below, Executive shall not be entitled to receive any benefits of employment following the Separation Date. 2. Consideration of Company. In consideration for the releases and covenants by Executive in this Agreement, Company will provide Executive with the following: insert consideration as set forth in Employment Agreement 3. Executive Release of Rights. Executive (defined for, the purpose of this Paragraph 3 as Executive and Executive's agents, representatives, attorneys, assigns, heirs, executors, and administrators) irrevocably, fully, and unconditionally releases the Released Parties (defined as the Company, ATT Holding Co., CHATT Holdings, Inc., CHATT Holdings LLC, Castle Harlan Partners IV, L.P., and each of their affiliated companies, parents, subsidiaries, predecessors, successors, assigns, divisions, related entities and any of their past or present employees, officers, agents, insurers, attorneys, administrators, officials, directors, shareholders, employee benefit plans, and the sponsors, fiduciaries, or administrators of the Company's employee benefit plans) from any and all liability, claims, demands, actions, causes of action, suits, grievances, debts, sums of money, agreements, promises, damages, back and front pay, costs, expenses, attorneys' fees, and remedies of any type, arising or that may have arisen out of or in connection with Executive's employment with or termination of employment from the Company, from the beginning of time to the date hereof, including but not limited to claims, actions or liability under: (1) Title VII of the Civil Rights Act of 1964, 42 U.S.C. §2000 et seq., the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Americans with Disabilities Act of 1990, 42 U.S.C. §12101 et sue., the Fair Labor Standards Act, 29 U.S.C. §201 et sM., the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et sue., the Workers' Adjustment and Retraining Notification Act, the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001 et sec.,, Pennsylvania Human Relations Act Pa., Stat. Ann. tit.43, §§ 951 et s?Mc., all as amended; (2) any other federal, state or local statute, ordinance, or regulation regarding employment, termination of employment, or discrimination in employment, and (3) the common law relating to employment contracts, wrongful discharge. defamation, or any other matter. 4. Waiver of Reinstatement. Executive waives any reinstatement or future employment with Company and agrees never to apply for employment or otherwise seek to be hired, rehired, employed, re-employed, or reinstated by Company or any of its affiliated companies or corporations. 5. No Disparagement or Encouraeement of Claims. Executive agrees not to make any oral or written statement that disparages or places any Released Party in a false or negative 9667509.2 B-1 light. Executive further agrees not to encourage or assist any person who files a lawsuit, charge, claim or complaint against the Released Parties unless Executive is required to render such assistance pursuant to a lawful subpoena or other legal obligation. The Board of Directors (and each of its individual members) and the Chief Executive Officer of the Company'agree. not to make (outside the Company; or within the Company, except as may be reasonably necessary to conduct the business of the Company) any oral or written statement that disparages or places Executive in a false or negative light; and these individu is further agree not to encourage or assist any person who files a lawsuit, charge, claim or complaint against Executive unless such individuals are required to render such assistance pursuant to a lawful subpoena or other legal obligation. 6. Cooperation of Executive. Executive agrees to cooperate with Company in any reasonable manner as Company may request, including but not limited to furnishing information to and otherwise consulting with the Company; and assisting Company in any litigation or potential litigation or other legal matters, including but not limited to meeting with and fully answering the questions of Company or its representatives or agents, and testifying and preparing to testify at any deposition or trial. Company agrees to compensate Executive for any reasonable out of pocket expenses incurred as a result of such cooperation. 7. Non-admission/Inadmissibility. This Agreement does not constitute an admission by Company that any action it took with respect to Executive was wrongful, unlawful or in violation of any local, state, or federal act, statute, or constitution, or susceptible of inflicting any damages or injury on Executive, and Company specifically denies any such wrongdoing or violation. This Agreement is entered into solely to resolve fully all matters related to or arising out of Executive's employment with and termination from Company, and its execution, and implementation may not be used as evidence, and shall not be admissible in a subsequent proceeding of any kind, except one alleging a breach of this Agreement. 8. Severability. The provisions of this Agreement shall be severable and the invalidity of any provision shall not affect the validity of the other provisions. 9. Governing Law. This Agreement shall be governed by and construed in accordance with laws and judicial decisions of the State of Pennsylvania, without regard to its principles of conflicts of laws. 10. Scope of Agreement. Executive understands that he remains bound to those provisions in the Executive's Employment Agreement, signed on June 28, 2004, which survive the termination of the Executive's employment, including but not limited. to, those provisions in Paragraphs 9-11, 14, 19 and 20 of such Employment Agreement. Except as specifically set forth in such provisions, this Agreement contains the entire agreement and understanding between Executive and Company concerning the matters described herein, and supersedes all prior agreements, discussions, negotiations, understandings and proposals of the parties. The terns of this Agreement cannot be changed except in a subsequent document signed by both parties. 11. Revocation Period. Executive has the right to revoke this Agreement for up to seven days after he signs it. In order to revoke this Agreement, Executive must sign and send a written notice of the decision to do so, addressed to [name] at [insert title, and address], and that written notice must be received by Company no later than the eighth day after Executive signed this Agreement. If Executive revokes this Agreement, Executive: will not be entitled to 9667509.2 B-2 any of the consideration from Company described in paragraph 2 above. 12. Voluntary Execution of Agreement. Executive acknowledges that: a. Executive has carefully read this Agreement and fully understands its meaning; b. Executive had the opportunity to take up to 21 days after receiving this Agreement to decide whether to sign it; C. Executive understands that the Company is hereby advising him, in writing, to consult with an attorney before signing it; d. Executive is signing this Agreement, knowingly, voluntarily, and without any coercion or duress; and C. everything Executive is receiving for signing this Agreement is described in the Agreement itself, and no other promises or representations have been made to cause Executive to sign it. 13. IyTondisclosure. Executive shall not disclose the contents or substance of this Agreement to any third parties, other than the Executive's attorneys, accountants, or as required by law and shall instruct each of the foregoing not to disclose the same. COMPANY By: Executive Signature Title: Dated: Dated: 9667509.2 B-3 AMES T MM?FZW Lawn & Garden Tools -Since 2 774 VERIFICATION I, Duane Greenly, hereby state as follows: I am employed by Ames True Temper, Inc. as Chief Operating Officer. 2. I am authorized to make this verification for and on behalf of Ames True Temper, Inc. 3. The facts set forth in the foregoing Complaint are true and correct to the best of my knowledge, information, and belief, including knowledge and information obtained in the performance of my duties as Chief Operating Officer of Ames True Temper. 4. I verify under the penalties set forth in 18 Pa. C.S.A. § 4904 relating to unsworn falsifications submitted to authorities that the facts set forth in the Complaint are true and correct to the best of my knowledge, information, and belief. Dated: December 21, 2005 465 Railroad Avenue • Camp Hill, PA 17011 • 1.800-393-1846 • Fax: 1800.567.1904 • www.ames-truetemper.com W r+ n >? G C u+ t 7 T 73 ? t? ? ? .1 } C ! Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215)963-5387/5495 (215) 963-5001 (facsimile) OF COUNSEL: Ronald E. Richman Heather Weine Brochin (pro hac vice to be filed) SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 Attorneys for Plaintiff Ames True Temper, Inc. AMES TRUE TEMPER, INC. Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY - CIVIL ACTION v CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART, NO: 05-6737 Defendants. JURY TRIAL DEMANDED PRAECIPE TO SUBSTITUTE EXHIBITS Kindly substitute the attached Exhibits I and 2 for Exhibits I and 2 that were filed with the Complaint on December 27, 2005. A f i Michael : Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) OF COUNSEL: Ronald E. Richman Heather Weine Brochin (pro hac vice to be filed) SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 Attorneys for Plaintiff Dated: January 9, 2006 Ames True Temper, Inc. ?? ?,?,?ti; r EXECUTION COPY AMENDED AND RESTATED EMPLOYMENT AGREEMENT This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Employment Agreement") is made this 28th day of February, 2002 by and between Ames True Temper, Inc., a Delaware corporation (the "Company"), and JOHN M. STONER, JR. ("Executive"). WHEREAS, the Company and its subsidiaries are engaged in the business of (i) manufacturing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, and decorative accessories for the lawn and garden, and (ii) conducting such other activities as are undertaken from time to time by the Company, its parent, ATT Holding Co., a Delaware corporation ("Parent"), and each of their subsidiaries as a result of future acquisitions, or otherwise (collectively, the "Business"); WHEREAS, Executive entered into that certain Employment Agreement dated as of June 1, 2000 (the "Old Employment Agreement") with True Temper Hardware Company, a Delaware corporation ("True Temper"); WHEREAS, on October 1, 2000, True Temper merged with and into the Company, and in connection therewith, among other things, the Company changed its name to "Ames True Temper, Inc." and succeeded to all of the rights and obligations of True Temper under the Old Employment Agreement; WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, as the President of the Company, in accordance with the terms and conditions set forth herein; and WHEREAS, the Company and Executive each desire that the Old Employment Agreement be amended and restated in its entirety as set forth in this Employment Agreement and that this Employment Agreement supercede the Old Employment Agreement, and all other agreements with respect to the subject matter hereof, other than that certain Incentive Award Agreement dated as of July 19, 2001 between the Company and Executive (the "Incentive Award Agreement"), which Incentive Aware Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement; and WHEREAS, in partial consideration for Executive's agreement to amend and restate the Old Employment Agreement as set forth herein, Executive will be entitled to purchase 30,000 shares of Class A Common Stock, par value $0.0001 per share of Parent ("Class A Common Stock"), at a purchase price of $1.00 per share (the "Executive Shares"), which Executive Shares shall be purchased by Executive pursuant to that certain senior management agreement to be entered into between Parent and the Executive (the "Management Agreement"). Dm #cH102(287709-00015)60029856117;04/02/2002/ri.;11.44 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises in this Employment Agreement, the parties, intending to be legally bound, hereby agree as follows: 1. Employment. The Company hereby agrees to employ Executive as President of the Company, and Executive hereby agrees to accept such employment and agrees to act as President of the Company, all in accordance with the terms and conditions of this Employment Agreement. Executive hereby represents and warrants that neither Executive's entry into this Employment Agreement nor Executive's performance of Executive's obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation of any nature to which Executive is a party or by which Executive is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement entered into by Executive. 2. Term of Employment and Automatic Renewal. The term of Executive's employment under this Employment Agreement will commence on the date of this Employment Agreement and will continue until the third (3rd) anniversary of the date of this Employment Agreement (the "Initial Employment Period"). THE INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL EMPLOYMENT PERIOD (AS DEFINED HEREIN) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (EACH, A "RENEWAL EMPLOYMENT PERIOD"), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT PERIOD, AS THE CASE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial Employment Period and the Renewal Employment Periods are hereinafter referred to as the "Employment Period" For purposes of this Employment Agreement, any notice of termination electing not to renew this Employment Agreement pursuant to this Section 2 shall be deemed: (i) a termination without Due Cause pursuant to Section 11(d) if such notice is delivered by the Company; or (ii) a voluntary resignation without Good Reason pursuant to Section 11(e) if such notice is delivered by Executive. Notwithstanding anything to the contrary contained herein, the Employment Period is subject to termination pursuant to Section 11 below. 3. Position and Responsibilities. Executive shall report to and be subject to the direction of the Chief Executive Officer of the Company. Executive shall perform and discharge such duties and responsibilities for the Company as the Chief Executive Officer may from time to time reasonably assign Executive. Executive understands and acknowledges that such duties shall be subject to revision and modification by the Board upon reasonable notice to Executive. During the Employment Period, Executive shall devote Executive's full business time, attention, skill and efforts to the faithful performance of Executive's duties herein, and shall perform the duties and carry out the responsibilities assigned to Executive, to the best of Executive's ability, in a diligent, trustworthy and businesslike manner for the purpose of advancing the Company. Executive acknowledges that Executive's duties and responsibilities will require Executive's full-time business efforts and agrees that during the Employment Period, Executive will not 2 engage in any outside business activities that conflict with his obligations under this Employment Agreement. 4. Compensation. (a) Base Salary. During the Employment Period, the Company shall pay to Executive a minimum base salary at the rate of $260,000 per year (the "Base Salary"), less applicable tax withholding, subject to increase from time to time, solely at the Company's discretion, payable at the Company's regular employee payroll intervals. Executive's performance shall be reviewed annually and the Base Salary may be increased at the Company's sole discretion. (b) Discretionary Bonus. During the Employment Period, Executive shall be eligible to receive a cash bonus based upon the achievement of certain budgeted performance goals pursuant to a program approved by the Board of Directors of the Company (the "Board") and substantially similar to that set forth on Exhibit A attached hereto (the "Performance Bonus"). Executive shall also be eligible to receive additional bonuses, in such amounts, if any, as determined by the Board in its sole discretion based upon the achievement of performance goals and objectives approved by the Board. (c) Stock. Pursuant to the Management Agreement, Executive will purchase the Executive Shares, which Executive Shares shall be subject to certain vesting, repurchase and other obligations and restrictions set forth in the Management Agreement and in that certain stockholders agreement (the "Stockholders Agreement") previously entered into among Parent, the Investors (as defined therein) and certain other shareholders of Parent, which Executive shall join as a party by executing a joinder thereto in form and substance satisfactory to the Company. In addition, pursuant to that certain stock purchase agreement (the "Stock Purchase Agreement") previously entered into among Parent, the Investors (as defined therein) and certain other executives of the Company, which Executive shall join as a party by executing a joinder thereto in form and substance satisfactory to the Company, Executive will purchase certain additional shares of Class A Common Stock and certain shares of Series A Preferred Stock, par value $0.0001 per share, of Parent (collectively, the "Coinvest Shares"), which Coinvest Shares shall be subject to certain repurchase and other obligations and restrictions set forth in the Management Agreement and in the Stockholders Agreement. 5. Benefit Plans. During the Employment Period, Executive will be entitled to receive traditional employment benefits comparable to those provided to other senior executive officers of the Company (subject to any applicable waiting periods, eligibility requirements, or other restrictions), which may include insurance (medical, dental, life, disability, directors and officers, etc.), retirement plans, and profit sharing plans. 6. Expenses. The Company, in accordance with policies and practices established by the Board from time to time, will pay or reimburse Executive for all expenses (including travel and cell phone expenses) reasonably incurred by Executive during the Employment Period in connection with the performance of Executive's duties under this Employment Agreement, 3 1 provided that Executive shall provide to the Company documentation or evidence of expenses for which Executive seeks reimbursement in accordance with the policies and procedures established by the Board from time to time. 7. Vacation. Executive shall be entitled to vacation at the rate of four (4) weeks per year in accordance with the Company's vacation policy. Executive shall make good faith efforts to schedule vacations so as to least conflict with the conduct of the Company's business and will give the Company adequate advance notice of Executive's planned absences. Up to one-half (1/2) of Executive's unused vacation time may be carried over to subsequent years; provided, however, that in no event shall Executive be entitled to greater than six (5) weeks vacation per year. 8. Confidentiality. Inventions and Non-Solicitation Agreement. On the date hereof, Executive shall execute a confidentiality, inventions and non-solicitation agreement, in the form of Exhibit B attached hereto and made a part hereof (the "Confidentiality, Inventions and Non-Solicitation Agreement"). 9. Restrictive Covenants. (a) Executive's Acknowledgment. Executive acknowledges that: (i) Parent and the Company are and will be engaged in the Business during the Employment Period and thereafter; (ii) Parent and the Company are and will be actively engaged in the Business throughout the world; (iii) Executive is one of a limited number of persons who will be developing the Business; (iv) Executive will occupy a position of trust and confidence with the Company after the date of this Employment Agreement and during the Employment Period Executive will become familiar with Parent's and the Company's (and their subsidiaries') trade secrets and with other proprietary and confidential information concerning Parent and the Company (and their subsidiaries and portfolio companies) and the Business (and the business of their subsidiaries and portfolio companies); (v) the agreements and covenants contained in this Section 9 are essential to protect Parent, the Company and the goodwill of the Business and are a condition precedent to the Company entering into this Employment Agreement; (vi) Executive's employment with the Company has special, unique and extraordinary value to the Company and Parent and the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Employment Agreement; and (vii) Executive has means to support Executive and Executive's dependents other than by engaging in the Business, and the provisions of this Section 9 will not impair such ability. (b) Restrictions. Executive will not, during the Restricted Period (as defined below), anywhere in the world (the "Restricted Territory"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) own, operate, manage, control, invest in, perform services for, or engage or participate in any manner in, or render services to (alone or in association with any person or entity) or otherwise assist any person or entity that engages in, or owns, invests in, operates, manages or controls any venture or enterprise that engages in, the Business. 4 The term "Restricted Period" means the period of time from the date of this Employment Agreement until two (2) years after the termination for any reason of Executive's employment relationship with the Company or any successor thereto (whether pursuant to a written agreement or otherwise, including any Renewal Employment Period under this Employment Agreement). The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of Section 9. Nothing contained in Section 9(b) above shall be construed to prevent Executive from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if Executive is not involved in the business of said corporation and if Executive and Executive's associates (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of one percent (1%) of the stock of such corporation. (c) Scope/Severabiiit9. The parties acknowledge that the business of Parent and the Company is and will be national and international in scope and thus the covenants in this Section 9 would be ineffective if the covenants were to be limited to a particular geographic area. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants set forth in this Section 9 not fully enforceable, the other provisions of this Section 9, and this Employment Agreement in general, will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Employment Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Period be deemed to be the longest period permissible by law, but not in excess of the length provided for in Section 9(b), and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances but not in excess of the territory provided for in Section 9(b)). 10. Equitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 11. Termination. (a) Death. The Employment Period will terminate immediately upon the death of Executive. If the Employment Period is terminated pursuant to this Section 11(a), the Company shall have no further obligation to Executive (or his estate) except for salary and 5 benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement. (b) Due Cause. The Company may terminate the Employment Period immediately upon written notice to Executive for a material breach of this Employment Agreement by Executive. The following events will be deemed a material breach of this Employment Agreement (each of which shall constitute "Due Cause"): (i) Executive's material breach of any of Executive's obligations under the Confidentiality, Inventions and Non-Solicitation Agreement, this Employment Agreement, the Stock Purchase Agreement, the Management Agreement or the Stockholders Agreement; or (ii) Executive's continued and deliberate neglect of, willful misconduct in connection with the performance of, or refusal to perform Executive's duties in accordance with Section 3 of this Employment Agreement, which, in the case of neglect or failure to perform, has not been cured within thirty (30) days after Executive has been provided notice of the same; or (iii) Executive's engagement in any conduct which injures the integrity, character or reputation of the Company or which impugns Executive's own integrity, character or reputation so as to cause Executive to be unfit to act in the capacity of President of the Company; or (iv) the Board's good faith determination that Executive has committed an act or acts constituting a felony, or other act involving dishonesty, disloyalty or fraud against the Company. If the Employment Period is terminated pursuant to this Section 11(b), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement. (c) Permanent Disability. The Company may terminate the Employment Period upon the Permanent Disability (as defined below) of the Executive. If the Employment Period is terminated pursuant to this Section I I (c), then Executive will be entitled to receive his salary and benefits accrued through the date of termination and such benefits, if any, as may be provided Executive pursuant to the Company's disability insurance policy with ReliaStar. Except as set forth in the immediately preceding sentence and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section I1(c), the Company shall have no further obligation to Executive. For purposes of this Employment Agreement, the term "Permanent Disability" shall mean that Executive is unable to perform, with or without reasonable accommodation, by reason of physical or mental incapacity, the essential functions of his or her position for ninety (90) or more days in any one hundred twenty (120) day period. The Board shall determine, according to the facts then available, whether and a when a Permanent Disability has occurred. Such determination shall not be arbitrary or unreasonable. (d) Termination by the Company without Due Cause. The Company may terminate the Employment Period without Cause upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 11(d), then Executive will be entitled to receive as severance pay his Base Salary plus benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. Except as set forth in the first sentence of this Section I I(d) and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section 11(d), the Company shall have no further obligation to Executive. (e) Voluntary Resignation by Executive. Executive may terminate the Employment Period at anytime for any reason upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 11(e), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement; provided, however, that if Executive is terminating the Employment Period for Good Reason (as defined below), then Executive will be entitled to receive as severance pay his Base Salary plus benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. The following events will be deemed "Good Reason" for which Executive may terminate the Employment Period and receive the severance payments set forth in this Section I I(e): W a material diminution of the Executive's responsibilities after notice to the Company and a thirty (30) day opportunity to cure; or (ii) any material breach of this Employment Agreement on the part of the Company (including, but not limited to, any decrease in the Base Salary without the consent of the Executive, or relocation of Executive's place of employment to a location that is greater than fifty (50) miles from the Harrisburg, Pennsylvania metropolitan area), after notice to the Board, and a thirty (30) day opportunity to cure; provided, however, that Executive is not in material breach of any of the terms of this Employment Agreement. (f) General Release. The receipt of any payment as set forth in Sections 11(c)-(e) above shall be contingent upon Executive's execution of a general release of all claims against the Company and its Affiliates (as defined below), substantially in the form attached hereto as Exhibit C. For purposes of this Employment Agreement, the term "Affiliates" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly or indirectly, through one or 7 i more intermediaries, controls, is controlled by, or is under common control with, the Company including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 1404 of the Code. (g) Mitigation. Notwithstanding anything herein to the contrary, to the extent Executive obtains employment during the first six (6) months of the severance period, the Company's severance obligations under this Employment Agreement, including, without limitation, the continuation of Executive's benefits hereunder, shall cease upon the first day of the seventh (?th) month of the severance period. Executive agrees that if Executive accepts other employment during the first six (6) months of the severance period, Executive shall notify the Company in writing within two (2) business days of such acceptance. Executive acknowledges that his failure to abide by this provision shall entitle the Company to recoup all severance pay previously paid to Executive pursuant to this Employment Agreement. (h) Survival. Termination of the Employment Period in accordance with this Section 11, or expiration of the Employment Period, will not affect the provisions of this Employment Agreement that survive such termination, including, without limitation, the provisions in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, and will not limit either party's ability to pursue remedies at law or equity. 12. Attornev's Fees. If either party prevails in a legal action to enforce or protect its rights under this Employment Agreement, then that party shall be entitled to recover reasonable attorneys' fees, costs, and expenses, in addition to all other relief, including but not limited to damages and injunctive relief. 13. Executive Assistance. Both during and after Executive's employment with the Company, Executive shall, upon reasonable notice, furnish the Company with such information as may be in Executive's possession or control, and cooperate with the Company, as the Company may reasonably request (with due consideration to Executive's business activities and obligations after the Employment Period), in connection with any litigation, claim, or other dispute in which the Company or any of its Affiliates is or may become a party. The Company shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in fulfilling Executive's obligations under this Section 13. 14. Effect of Prior Agreements. This Employment Agreement, the Management Agreement, the Stockholders Agreement, the Stock Purchase Agreement and the Confidentiality, Inventions and Non-Solicitation Agreement contain the entire understanding between Parent, the Company and Executive relating to the subject matter hereof and supersede any prior employment agreement between Executive, Parent and the Company, including, without limitation, the Old Employment Agreement, or other agreement relating to the subject matter hereof between Parent, the Company and Executive, other than the Incentive Award Agreement, which Incentive Award Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement. 8 15, Modification and Waiver. This Employment Agreement may not be modified or amended, nor may any provisions of this Employment Agreement be waived, except by an instrument in writing signed by the parties. No written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such tern or condition for the future or as to any act other than that specifically waived. 16. Severability. If, for any reason, any provision of this Employment Agreement is held invalid, such invalidity will not affect any other provision of this Employment Agreement, and each provision will to the full extent consistent with law continue in full force and effect. If any provision of this Employment Agreement is held invalid in part, such invalidity will in no way affect the rest of such provision, and the rest of such provision, together with all other provisions of this Employment Agreement, will, to the full extent consistent with law, continue in full force and effect. 17. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Employment Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 9 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 17. 18. Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than the parties to this Employment Agreement and their respective permitted successors and assigns, any rights or remedies under or by reason of this Employment Agreement. 19. Headings. The headings and other captions in this Employment Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Employment Agreement. 20. Governing Law; Arbitration. This Employment Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. Except for disputes arising out of an alleged violation of the Restrictive Covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. The arbitration process shall be instigated by either party giving written notice to the other of the desire for arbitration and the factual allegations underlying the basis for the dispute. The arbitration shall be conducted by such alternative dispute resolution service as is agreed to by the parties, or, failing such agreement within thirty (30) days after such dispute arises, by arbitrators selected as described below in accordance with the rules and procedures established by the American Arbitration Association. Only a person who is a practicing lawyer admitted to a state bar may serve as an arbitrator. Each party shall select one arbitrator, and those arbitrators shall choose a third arbitrator; these arbitrators shall constitute the panel. The American Arbitration Association rules for employment arbitration shall control any discovery conducted in connection with the arbitration. The expenses of arbitration (other than attorneys' fees) shall be shared as determined by arbitration, Each side to the claim or controversy shall pay their own attorneys' fees. Any result reached by the panel shall be binding on all parties to the arbitration, and no appeal may be taken. It is agreed that any party to any award rendered in such arbitration proceeding may seek a judgment upon the award and that judgment may be entered thereon by any court having jurisdiction. The arbitration shall be conducted in the Commonwealth of Pennsylvania. 21. Non-Assignability/Binding Effect, This Employment Agreement shall not be assignable by either party without the prior written consent of the other party. This Employment Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. 22. No Strict Construction. The language used in this Employment Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. 10 [Remainder of Page Intentionally Blank; Signature Page to Follow] 11 IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be executed by its duly authorized officer and Executive has signed this Employment Agreement, as of the date first above written. AMES TRUE TEMPER, INC. Its: Preside?}* EXECUTIVE John M. Stoner, Jr. 12 Co 4:CH102(87309-00015) 60029956v6;02/25/2002M":13:37 IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be executed by its duly authorized officer and Executive has signed this Employment Agreement, as of the date first above written. AMES TRUE TEMPER, INC. By: EXECUTIVE John .Stoner Jr. 12 Doc M:CH102 (81309-00015) 60029856v6,02R2/200VTun.:15:13 EXHIBIT A PERFORMANCE BONUS January '02-September '02 BUDGET Percentage of Budget Percentage of Salary 90%-94.9% 10% 95%-99.9% 20% 100% 40% 120% 70% 140% 100% Payment starts at 90% of Budget. Performance of 90%-94.9% pays as indicated - no graduation. Performance of 95%-99.9% pays as indicated - no graduation. Performance of 100% of Budget pays as indicated and is graduated at straight line at the rate of a 1% increase yielding 1.5 % of Base Salary. The above calculations will be conducted for each (A) EBITDA and (B) FCF. The EBITDA calculation will be factored by x 66.7%. The FCF calculation will be factored by x 33.3%. With regard to subsequent years incremental bonus as a percent of incremental EBITDA will be no more than 15% in Year 2 and 10% in Year 3 and beyond. A-1 EXHIBIT B CONFIDENTIALITY, INVENTIONS AND NON-SOLICITATION AGREEMENT In consideration of employment by Ames True Temper, Inc., a Delaware corporation, its successors or assigns (the "Company") of John M. Stoner, Jr. ("Executive"), it is understood and agreed as follows: 1. Confidential Information. (a) Executive acknowledges that the Confidential information (as defined below) constitutes a protectible business interest of the Company and its parent, ATT Holding Co., a Delaware corporation ("Parent"), and covenants and agrees that at all times during the period of Executive's employment, and at all times after termination of such employment, Executive will not, directly or indirectly, disclose, furnish, make available or utilize any Confidential Information other than in the course of performing duties as an employee of the Company. Executive will abide by Company policies and rules as may be established from time to time by it for the protection of its Confidential Information. Executive agrees that in the course of employment with the Company Executive will not bring to the Company's offices nor use, disclose to the Company, or induce the Company to use, any confidential information or documents belonging to others. Executive's obligations under this Section I.a. with respect to particular Confidential information will survive expiration or termination of this Confidentiality, Inventions and Non-Solicitation Agreement (this "Agreement"), and Executive's employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes generally known to the public other than through a breach of Executive's obligations under this Agreement. (b) As used in this Agreement, the term "Confidential Information" means any and all confidential, proprietary or trade secret information, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is conceived or developed by Executive, applicable to or in any way related to: (i) the present or future business of Parent, the Company or any of their Affiliates (as defined below); (ii) the research and development of Parent, the Company or any of their Affiliates; or (iii) the business of any client or vendor of Parent, the Company or any of their Affiliates. Such Confidential Information includes the following property or information of Parent, the Company and their Affiliates, by way of example and without limitation, trade secrets, processes, formulas, data, program documentation, customer lists, designs, drawings, algorithms, source code, object code, know-how, improvements, inventions, licenses, techniques, all plans or strategies for marketing, development and pricing, business plans, financial statements, profit margins and all information concerning existing or potential clients, suppliers or B-1 r vendors. Confidential Information of Parent and the Company also means all similar information disclosed to Parent or the Company by third parties which is subject to confidentiality obligations. The tern "Affiliates" means (i) all persons or entities controlling, controlled by or under common control with, Parent and/or the Company, (ii) all companies or entities in which Parent or the Company own an equity interest and (iii) all predecessors, successors and assigns of the those Affiliates identified in (i) and (ii). 2. Return of Materials. Upon termination of employment with the Company, and regardless of the reason for such termination, Executive will leave with, or promptly return to, the Company all documents, records, notebooks, magnetic tapes, disks or other materials, including all copies, in Executive's possession or control which contain Confidential Information or any other information concerning Parent, the Company, any of their Affiliates or any of their respective products, services or clients, whether prepared by the Executive or others. Notwithstanding the foregoing, Executive shall be entitled to retain his personal effects provided any Confidential Information is removed therefrom. 3. Inventions as Sole Property of the Company. (a) Executive covenants and agrees that all Inventions (as defined below) shall be the sole and exclusive property of the Company. (b) As used in this Agreement, the term "Inventions" means any and all inventions, developments, discoveries, improvements, works of authorship, concepts or ideas, or expressions thereof, whether or not subject to patents, copyright, trademark, trade secret protection or other intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice, conceived or developed by Executive while employed with the Company or within one (1) year following termination of such employment which relate to or result from the actual or anticipated business, work, research or investigation of Parent, the Company or any of their Affiliates or which are suggested by or result from any task assigned to or performed by Executive for Parent, the Company or any of their Affiliates. (c) Executive acknowledges that all original works of authorship which are made by him or her (solely or jointly) are works made for hire under the United States Copyright Act (17 U.S.C., et seq.). (d) Executive agrees to promptly disclose to the Company all Inventions, all original works of authorship and all work product relating thereto. This disclosure will include complete and accurate copies of all source code, object code or machine-readable copies, documentation, work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence or results (collectively, "Tangible Embodiments") of such Inventions, works of authorship and work product. All Tangible Embodiments of any Invention, work of authorship or work product related thereto will be deemed to have been assigned to the Company as a result of the act of expressing any Invention or work of authorship therein. B-2 (e) Executive hereby assigns to the Company (together with the right to prosecute or sue for infringements or other violations of the same) the entire worldwide right, title and interest to any such Inventions or works made for hire, and Executive agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company's expense, in registering, recording, obtaining, maintaining, defending, enforcing and assigning Inventions or works made for hire in any and all countries. Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agents and attomeys-in-fact to act for and in Executive's behalf and instead of Executive, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Executive; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest. (f) Without limiting the generality of any other provision of this Section 3, Executive hereby authorizes the Company and each of its Affiliates (and their respective successors) to make any desired changes to any part of any Invention, to combine it with other materials in any manner desired, and to withhold Executive's identity in connection with any distribution or use thereof alone or in combination with other materials. (g) Pursuant to the Illinois Executives' Patent Act, Public Act 83-493, this Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of Parent or the Company was used and which was developed entirely on Executive's own time, unless (1) the invention relates (a) to the business of Parent or the Company or (b) to Parent's or the Company's actual demonstrably anticipated research or development; or (2) the invention results from any work performed by Executive for Parent or the Company. (h) The obligations of Executive set forth in this Section 3 (including, but not limited to, the assignment obligations) will continue beyond the termination of Executive's employment with respect to Inventions conceived or made by Executive alone or in concert with others during Executive's employment with the Company and during the one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Executive and Executive's executors, administrators and other representatives. 4. List of Prior Inventions. All Inventions which Executive has made prior to employment by the Company are excluded from the scope of this Agreement. As a matter of record, Executive has set forth on Annex I hereto a complete list of those Inventions which might relate to Parent's or the Company's business and which have been made by Executive prior to employment with the Company. Executive represents that such list is complete. If no list is attached, Executive represents that there are no prior Inventions. B-3 5. Non-Solicitation. (a) Executive will not, during the term of Executive's employment with the Company and for two (2) years thereafter (the "Restricted Period"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity: i. employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, an employee of Parent, the Company or any of their Affiliates or otherwise seek to adversely influence or alter such individual's relationship with Parent, the Company or any of their Affiliates; or ii. explicitly solicit or encourage any individual or entity that is, or was during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, a customer or vendor of Parent or the Company to terminate or otherwise alter his, her or its relationship with Parent or the Company. (b) The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of this Section 5. 6. Equitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 5 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 7. No Ritrht to Employment. No provision of this Agreement shall give Executive any right to continue in the employ of the Company or any of its Affiliates, create any inference as to the length of employment of Executive, affect the right of the Company or its Affiliates to terminate the employment of Executive, with or without cause, or give Executive any right to participate in any Executive welfare or benefit plan or other program of the Company or any of its Affiliates. 8. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement B-4 will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived 9. Severability. Executive acknowledges that the agreements and covenants contained in this Agreement are essential to protect Parent, the Company and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. It is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. 10. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 B-5 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 10. 11. Headines. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement. 12. Governin¢ Law. This Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. 13. Bindine Effect. This Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement provided that the Company will remain liable to Executive should such assignee fail to perform its obligations under this Agreement. 14. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. B-6 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has signed this Agreement, as of the date written below. EXECUTIVE: Date: February _, 2002 John toner, r. A.MES TRUE TEMPER, INC. By: B-7 Dac k.CM02 (87309-00015) 60029856WOV2212002fr'ime: 15: 13 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duty authorized officer and Executive has signed this Agreement, as of the date written below. Date: February2002 Doc P;CH102 (87309-0 15) 600_M956?16;02252002/Cinxa 3:37 EXECUTIVE: John M. Stoner, Jr. AMES TRUE TEMPER, INC. Its: 1?res ide?1+ B-7 EXHIBIT C SEPARATION AGREEMENT AND GENERAL RELEASE AMES TRUE TEMPER, INC. ("Company"), and JOHN M. STONER, JR. ("Executive"), agree that this Separation Agreement and General Release ("Agreement") sets forth their complete agreement and understanding regarding the termination of Executive's employment with Company. 1. Seuaration Date. Executive's employment with Company will terminate effective (the "Separation Date"). Executive agrees to return all Company property to Company no later than the Separation Date. Except as specifically provided below, Executive shall not be entitled to receive any benefits of employment following the Separation Date. 2. Consideration of Company. In consideration for the releases and covenants by Executive in this Agreement, Company will provide Executive with the following: insert consideration as set forth in Employment Agreement 3. Executive Release of Rights. Executive (defined for the purpose of this Paragraph 3 as Executive and Executive's agents, representatives, attorneys, assigns, heirs, executors, and administrators) releases the Released Parties (defined as the Company, its parent, ATT Holding Co., a Delaware corporation ("Parent"), and any of their past or present employees, agents, insurers, attorneys, administrators, officials, directors, shareholders, divisions, parents, subsidiaries, predecessors, successors, employee benefit plans, and the sponsors, fiduciaries, or administrators of the Company's employee benefit plans) from any and all liability, claims, demands, actions, causes of action, suits, grievances, debts, sums of money, agreements, promises, damages, back and front pay, costs, expenses, attorneys' fees, and remedies of any type, arising or that may have arisen out of or in connection with Executive's employment with or termination of employment from the Company, from the beginning of time to the date hereof, including but not limited to claims, actions or liability under: (1) Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Workers' Adjustment and Retraining Notification, the Employee Retirement Income Security Act of 1974, and the Illinois Human Rights Act; (2) any other federal, state or local statute, ordinance, or regulation regarding employment, termination of employment, or discrimination in employment, and (3) the common law of any state relating to employment contracts, wrongful discharge, defamation, or any other matter. 4. Waiver of Reinstatement. Executive waives any reinstatement or future employment with Company and agrees never to apply for employment or otherwise seek to be hired, rehired, employed, re-employed, or reinstated by Company or any of its affiliated companies or corporations. 5. No Disparagement or Encouragement of Claims. Executive agrees not to make any oral or written statement that disparages or places Parent or the Company in a false or C-1 negative light. Executive further agrees not to encourage or assist any person who files a lawsuit, charge, claim or complaint against the Released Parties (as defined in Paragraph 3) unless Executive is required to render such assistance pursuant to a lawful subpoena or other legal obligation. The Board of Directors (and each of its individual members) and the Chief Executive Officer of the Company agree not to make (outside the Company; or within the Company, except as may be reasonably necessary to conduct the business of the Company) any oral or written statement that disparages or places Executive in a false or negative light; and these individuals further agree not to encourage or assist any person who files a lawsuit, charge, claim or complaint against Executive unless such individuals are required to render such assistance pursuant to a lawful subpoena or other legal obligation. 6. Cooperation of Executive. Executive agrees to cooperate with Company in any reasonable manner as Company may request, including but not limited to furnishing information to and otherwise consulting with the Company; and assisting Company in any litigation or potential litigation or other legal matters, including but not limited to meeting with and fully answering the questions of Company or its representatives or agents, and testifying and preparing to testify at any deposition or trial. Company agrees to compensate Executive for any reasonable out of pocket expenses incurred as a result of such cooperation. 7. Non-admission/Inadmissibility. This Agreement does not constitute an admission by Company that any action it took with respect to Executive was wrongful, unlawful or in violation of any local, state, or federal act, statute, or constitution, or susceptible of inflicting any damages or injury on Executive, and Company specifically denies any such wrongdoing or violation. This Agreement is entered into solely to resolve fully all matters related to or arising out of Executive's employment with and termination from Company, and its execution, and implementation may not be used as evidence, and shall not be admissible in a subsequent proceeding of any kind, except one alleging a breach of this Agreement. 8. Severabilitv. The provisions of this Agreement shall be severable and the invalidity of any provision shall not affect the validity of the other provisions. 9. Governing Law. This Agreement shall be governed by and construed in accordance with laws and judicial decisions of the Commonwealth of Pennsylvania, without regard to its principles of conflicts of laws. 10. Scope of Agreement. Executive understands that he remains bound to those provisions in his Amended and Restated Employment Agreement, signed in February 2002 (the "Employment Agreement"), which survive the termination of his employment, including those provisions in Paragraphs 9-13, 16, 21 and 23 of the Employment Agreement. Except as specifically set forth in such provisions, this Agreement contains the entire agreement and understanding between Executive and Company concerning the matters described herein, and supersedes all prior agreements, discussions, negotiations, understandings and proposals of the parties. The terms of this Agreement cannot be changed except in a subsequent document signed by both parties. C-2 11. Revocation Period. Executive has the right to revoke this Agreement for up to seven days after he signs it. In order to revoke this Agreement, Executive must sign and send a written notice of the decision to do so, addressed to [name] at (insert title, and address], and that written notice must be received by Company no later than the eighth day after Executive signed this Agreement. If Executive revokes this Agreement, Executive will not be entitled to any of the consideration from Company described in paragraph 2 above. 12. Voluntary Execution of Agreement. Executive acknowledges that: a. Executive has carefully read this Agreement and fully understands its meaning; b. Executive had the opportunity to take up to 21 days after receiving this Agreement to decide whether to sign it; C. Executive understands that the Company is hereby advising him, in writing, to consult with an attorney before signing it; d. Executive is signing this Agreement, knowingly, voluntarily, and without any coercion or duress; and e. everything Executive is receiving for signing this Agreement is described in the Agreement itself, and no other promises or representations have been made to cause Executive to sign it. COMPANY Executive Signature Dated: C-3 )- 2 ATT Holding Co. Ames True Temper 465 Railroad Avenue Camp Hill, PA 17011 August 14, 2002 John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 Re: Boum Payment and Non-Compete Extension Dear Mr. Stoner Reference is hereby made to that certain Termination Notice dated as of July 25, 2002 delivered by Ames True Temper, Inc. (the "Company") and ATT Holding Co. (the "Parent'l to you, a copy of which is attached hereto as Exlu'bit A (the "Termination Notice'). The purpose of this letter is to outline our agreement to provide you with a pro- rated portion of your bomts for the period commencing October 1, 2001 and continuing through August 24, 2002, the date of your termination (the "Termination Date") pursuant to the Termination Notice (such period, the "Sonars Period"), which bonus payment shall be in exchange for your agreement to extend the Restricted Period (as defined in your Amended and Restated Employment Agreement dated as of February 28, 2002, a copy of which is attached hereto as Exht'bit BB (the "Employment Agreement")) for purposes of certain restrictive covenants provided in the Employment Agreement from two (2) to three (3) years. In addition to the severance benefits described in the Termination Notice, you will be entitled to receive a pro rated bomrs for the Bonus Period, which bonus shall be paid at the Company's regular bonus payment date in accordance with the Company's standard bonus payment procedures (the "Bonus'. In consideration of the Company's agreement to pay you the Bomis, you agree that the Restricted Period for purposes of Section 9 of the Employment Agreement shall be extended front two (2) to three (3) years commencing on the Termination Date, and that during the Restricted Period you will not be able to engage in any behavior in violation of Section 9 of the Employment Agreement. In summary and without in any way limiting the Company's rights or your responsibilities under Section 9 of the Employment Agreement, during the Restricted Period you may not be employed by, or otherwise provide services to, any competitor of the Company. "Competitors" of the Company shall mean any companies engaged in the business of manufacturing and distributing long-handled tools, wheelbarrows, hose reels, snaking tools, pruning implements, and decorative accessories for the lawn and garden. In addition, pursuant to that certain Confidentiality, Inventions and Non-Solicitation D=OCHM r2154W-000011 60Q"4M10VM00Zrrl i6-Ir Agreement between you and the Company dated as of February 28, 2002, a copy of which is attached hereto as Exhibit (the "Confidentiality, Inventions and Non- Solicitation Agreement', you will not be able to solicit any employee or vendor of the Company to end or alter their relationship with the Company during the Restricted Period. Moreover, under Section I of the Confidentiality, Inventions and Non-Solicitation Agreement, and under applicable state law, you are not permitted to disclose trade secrets or other confidential information to any person and you may not make use of this information yourselL If you have any documents or information stored in a computer- readable format that contain any information regarding the Company, please return those documents or that information to the Company immediately, or permanently erase it, if it is not practical to return it to the Company. The Company's obligation to pay the Bonus described above and severance described in the Termination Notice will ccaae if you breach either Section 9 of the Employment Agreement or say section of the Confidentiality, Inventions and Non- Solicitation Agreement As a further condition to your receipt of the Bonus and severance, pursuant to Section I I(f) of the Employment Agreement, you are required to execute and return a copy of the Separation Agreement and General Release, which was originally attached to the Termination Notice, and is attached hereto (in a form modified to reflect the Company's agreement to pay you the Bonus) as Exhibit D (the "Release'). Pursuant to Section 12(b) of the Release, you originally bad until August 15, 2002 to review the Release and determine whether or not you wish to sign a copy of the same. Per your request, we have agreed to extend this dare until August 20, 2002. Should you elect to sign the Release, you must return an executed copy to the Company no later than the close of business on August 20, 2002. Except as otherwise described herein, this lettmis not intended to after or supercede the rights and obligations contained in the Termination Notice, Employment Agreement and related documents in any man=. This letter may be executed in counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same agreement. Please acknowledge your receipt of this letter and agreement to be bound by the terms contained herein by executing a copy of this letter in the space provided below and Doc rcM02 (nHa-OD01) 60095w.zovDVMM?16.21 returning it to the Company along with the Release. We wish you the best of luck in the firm. Siockaely),? ATI' Holding Co. By Its: 2? ....aa Ames True Temper, Inc. By. Its: 0 9' n Agreed to and acknowledged as of this ja_ day of Aix 2002 by: Jo M. toner, Jr. cc: Richard Kracum Michael J. Solot Steven V. Napolitano Scott E. Lyons Dn OCM02c2134%400116W5S=Y2;oviv2Wvr=1621 Exhibit Termwatioa Notice Px IK.71171(21 N940000116 W 9J01v2:0Y1 U3002TisC ] 637 ATT Holding Co. Acres True Temper 465 Raflroad Avenue Camp Hill, PA 17011 July 25, 2002 John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 Re: Tora ination of BmWovment Dear Mr. Stoner: Please be advised that Ames True Temper, lnc. ("Company's is terminating your employment without Due Cause effective August 24, 2002 (the "Termination Date"), under Section 11(d) of the Amended"'and X6itated "Employment ASreemwl (the 'Employment Agreement'D between you and the Company dated February 28, 2002. 'this letter outlines payment schedules, stock repurchase details, and other matters in connection with the temoination.1 Through the Termination Date, the Company will continue your Base Salary and benefits, payable in accordance with the regular payroll schedule. The Company will not, however, require you to continue to perform your job duties after today. Rather, the Company will regard you as being on inactive status between July 25 and the Termination Date. You will continue to accrue your vacation benefits through the Termination Date, and will receive a check for all accrued but unused vacation time following the Termination Date, The Company will also provide you with outplacement service through the Company's outplacement agency, Quinlivaa & Company, for three consecutive months, to begin on a date of your choosing between July 25 and August 25. { Because your termination is without Due Cause, you are eligible to receive severance pay. Pursuant to the Employment Agreement, the severance pay shall be equal to one year of your current Base Salary in the gross amount of $260,000, payable in equal installments during the one year period commencing on the Termination Date ("Severance Period'). Specifically, the severance pay will consist of twenty six (26) Unless otherwise defined hemin, The capitalized terms shall have the meaning ascribed to them in the applicable agreement between you and the Company, The sbort summaries set forth in dris letter of the rights and obligations under the Employment Agreement, the Management Agmement and related documents am not intended to alter or supersede the tights and obligations contained in those documents in any manner. In addition, until the closing of the repurchase of your Executive Securities, nothing in this letter is intended to alter any of the rigbts of the parties under any other doavnrents to which they ate a parry, including, without timiuMon, the Stockholders Agmemcait or the Registration Rights Ageecmeat among the parent, you and the other stockholders of parent originally dated Jsanary, 14, 2002, as amended. ? uar.cxroz(zi ssssaoson srosszawsmrsnavrtmeiz:so payments of $10,000.00, made bi-weekly on the Company's regular salary payment dates, beginning with the first payroll period after the Termination Date. You are also eligible to maintain certain employment benefits during the Severance Period, including medical and dental benefits at the same contribution level as though you were 5611 employed, provided that you remain eligible for and elect such benefit continuation through COBRA. The Company will forward the COBRA election documents to you under separate cover. Pursuant to Section 11(f) of the Employment Agreement, as a condition to receiving these severance benefits, you must execute and return a copy of the Separation Agreement and General Release (the "Release'l provided to you with this letter. Pursuant to Section 11(b) of the Release, you will have until August 15, 2002 to sign the Release and tender it to the Company. You will then have seven (7) days to revoke the Release should you change your mind Of course, if you elect not to sign the Release or revoke it within the seven (7) day period, you will not be entitled to receive any of the severance benefits deacribed above. Aa a further condition to receiving the severance benefits, you must continue to abide by the restrictive covenants contained in Section 9 of the Employment Agreement and the Confidentiality, Inventions and Non-Solicitation Agreement between you and the Company dated as of February 28, 2002, a copy of which is attached hereto as Exhibit A. In short, these covenants restrict you from utilizing or disclosing the Company's trade secret or confidential information, and, for a period of two (2) years commencing on the Termination Date, from becoming employed by, or otherwise providing services to, any competitor of the Company, or soliciting any employee or vendor of the Company to end or alter their relationship with the Company. You should consult the applicable documents for a full description of your restrictive covenant obligations. In light of the termination, ATT Holding Co., the parent of the Company ("Parent'), is also hereby giving you notice of its intent to repurchase all of your Executive Securities under Section 3(d) of the Senior Management Agreement between you and Parent dated as of February 28, 2002, a copy of which is attached hereto as Exhibit B (the "Management Agreement"). Specifically, the Parent will repurchase your Executive Securities consisting of: (a) 30,000 shares of the Parent's Class A Common Stock (the "Incentive Shares') and (b) 98.646 shoes of the Parent's Series A Preferred Stock (the 'Preferred Coinvest Shares'? and 1,354.167 shares of the Parent's Class A Common Stock (the "Common Coinvest Shares" and, together with the Preferred Coinvest Shares, the "Coinvest Shares'). Pursuant to Sections 2(a) and 2(b) of the Management Agreement, all of the Incentive Shares are Unveated Shares (as defined in Section 2(b) of the Management Agreement). Therefore, pursuant to Section 3(b) of the Management Agreement, the purchase price for the Incentive Shares will be your original cost of 51.00 per share or an aggregate of $3000 for the Incentive Shares. nth respect to your Coinvest Shares, Parent will refund the full purchase price of your investment, plus accrued dividends on the Preferred Coinvest Shares. Therefore, the purchase price for (a) the Preferred Coinvest Shares will be your original cost of $1,000 per share plus accrued and unpaid dividends from the period of March 1, 2002 through September 15, a Po¢tcwm(I15.s+aoool)aaarlosq:mn.noomme: xSo 2002 of $54.52 per share or an aggregate cost plus dividends of $104,024.23 for the Preferred Coinvest Shares and (b) the Common Coinvest Shares will be your original cost of $1.00 per share or an aggregate of $1,354.167 for the Common Coinvest Shares. Pursuant to Section 3(e) of the Management Agreement, the closing date of the repurchase of your Executive Securities will be September 15, 2002 (the "Closing Date'. On the Closing Date, the Parent will pay you the aggregate price to be paid for the Executive Securities by check. As the Parent has in its possession the certificates representing the Executive Securities, such certificates will be canceled on the Closing Date, and the closing of the repurchase will take place without any further action on your part. John, we thank you for your service to the Company and wish you the best of luck in the future. If you have any questions, either now or in the coming weeks, please feel free to contact Rich Dell at (717) 730-2530. Sincerely, ATT Holding Co. By: Its: 7'V2 e4 Su Aerg. Ames True Temper, Inc. By. Its: C e cc: Richard %racum Michael J. Solot Steven V. Napolitano Scott E. Lyons Cba I:Qp02 (T)SKI-00(OI) 60019M! Vi;O]R}QWT/f4nc1TS2 Exhibit B Amended and Restated Employment Agreement D.,;CyZO2(ZjS4%4DWj) 6MSU212:OW14=2,Tim 16:21 EXECUTION COPY AMENDED AND RESTATED EMPLOYMENT AGREEMENT This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Employment Agreement') is made this 28th day of February, 2002 by and between Ames True Temper, Inc„ a Delaware corporation (the "Company"), and JOHN M. STONER, JR. ("Executive"). WHEREAS, the Company and its subsidiaries are engaged in the business of (i) manufacturing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, and decorative accessories for the lawn and garden, and (ii) conducting such other activities as are undertaken from time to time by the Company, its parent, ATT Holding Co., a Delaware corporation ("Parent"), and each of their subsidiaries as a result of future acquisitions, or otherwise (collectively, the "Business"); WHEREAS, Executive entered into that certain Employment Agreement dated as of June 1, 2000 (the "Old Employment Agreement") with True Temper Hardware Company, a Delaware corporation ("True Temper"); WHEREAS, on October 1, 2000, True Temper merged with and into the Company, and in connection therewith, among other things, the Company changed its name to "Ames True Temper, Inc." and succeeded to all of the rights and obligations of True Temper under the Old Employment Agreement; WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue to be employed by the Company, as the President of the Company, in accordance with the terms and conditions set forth herein; and WHEREAS, the Company and Executive each desire that the Old Employment Agreement be amended and restated in its entirety as set forth in this Employment Agreement and that this Employment Agreement supercede the Old Employment Agreement, and ail other agreements with respect to the subject matter hereof, other than that certain Incentive Award Agreement dated as of July 19, 2001 between the Company and Executive (the "Incentive Award Agreement"), which Incentive Aware Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement; and WHEREAS, in partial consideration for Executive's agreement to amend and restate the Old Employment Agreement as set forth herein, Executive will be entitled to purchase 30,000 shares of Class A Common Stock, par value $0.0001 per share of Parent ("Class A Common Stock"), at a purchase price of $1.00 per share (the "Executive Shares"), which Executive Shares shall be purchased by Executive pursuant to that certain senior management agreement to be entered into between Parent and the Executive (the "Management Agreement"). 1 o« a:c?noz tzaiaos-ooo?s> eooz?asa???oarouioozrr?m?: i i:+a NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and promises in this Employment Agreement, the parties, intending to be legally bound, hereby agree as follows: I. Employment. The Company hereby agrees to employ Executive as President of the Company, and Executive hereby agrees to accept such employment and agrees to act as President of the Company, all in accordance with the terms and conditions of this Employment Agreement. Executive hereby represents and warrants that neither Executive's entry into this Employment Agreement nor Executive's performance of Executive's obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation of any nature to which Executive is a party or by which Executive is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement entered into by Executive. 2. Term of Employment and Automatic Renewal. The term of Executive's employment under this Employment Agreement will commence on the date of this Employment Agreement and will continue until the third (3rd) anniversary of the date of this Employment Agreement (the "Initial Employment Period'). THE INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL EMPLOYMENT PERIOD (AS DEFINED HEREIN) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (EACH, A "RENEWAL EMPLOYMENT PERIOD"), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT PERIOD, AS THE CASE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial Employment Period and the Renewal Employment Periods are hereinafter referred to as the "Employment Period." For purposes of this Employment Agreement, any notice of termination electing not to renew this Employment Agreement pursuant to this Section 2 shall be deemed: (i) a termination without Due Cause pursuant to Section 11(d) if such notice is delivered by the Company; or (ii) a voluntary resignation without Good Reason pursuant to Section 11(e) if such notice is delivered by Executive. Notwithstanding anything to the contrary contained herein, the Employment Period is subject to termination pursuant to Section 11 below. 3. Position and Responsibilities. Executive shall report to and be subject to the direction of the Chief Executive Officer of the Company. Executive shall perform and discharge such duties and responsibilities for the Company as the Chief Executive Officer may from time to time reasonably assign Executive. Executive understands and acknowledges that such duties shall be subject to revision and modification by the Board upon reasonable notice to Executive. During the Employment Period, Executive shall devote Executive's full business time, attention, skill and efforts to the faithful performance of Executive's duties herein, and shall perform the duties and carry out the responsibilities assigned to Executive, to the best of Executive's ability, in a diligent, trustworthy and businesslike manner for the purpose of advancing the Company, Executive acknowledges that Executive's duties and responsibilities will require Executive's full-time business efforts and agrees that during the Employment Period, Executive will not engage in any outside business activities that conflict with his obligations under this Employment Agreement. 4. Compensation. (a) Base Salary. During the Employment Period, the Company shall pay to Executive a minimum base salary at the rate of $260,000 per year (the "Base Salary"), less applicable tax withholding, subject to increase from time to time, solely at the Company's discretion, payable at the Company's regular employee payroll intervals. Executive's performance shall he reviewed annually and the Base Salary may be increased at the Company's sole discretion. (b) Discretionary Bonus. During the Employment Period, Executive shall be eligible to receive a cash bonus based upon the achievement of certain budgeted performance goals pursuant to a program approved by the Board of Directors of the Company (the "Board") and substantially similar to that set forth on Exhibit A attached hereto (the "Performance Bonus"). Executive shall also be eligible to receive additional bonuses, in such amounts, if any, as determined by the Board in its sole discretion based upon the achievement of performance goals and objectives approved by the Board. (c) Stock. Pursuant to the Management Agreement, Executive will purchase the Executive Shares, which Executive Shares shall be subject to certain vesting, repurchase and other obligations and restrictions set forth in the Management Agreement and in that certain stockholders agreement (the "Stockholders Agreement") previously entered into among Parent, the Investors (as defined therein) and certain other shareholders of Parent, which Executive shall join as a party by executing a joinder thereto in form and substance satisfactory to the Company. In addition, pursuant to that certain stock purchase agreement (the "Stock Purchase Agreement") previously entered into among Parent, the Investors (as defined therein) and certain other executives of the Company, which Executive shall join as a party by executing a joinder thereto in form and substance satisfactory to the Company, Executive will purchase certain additional shares of Class A Common Stock and certain shares of Series A Preferred Stock, par value $0.0001 per share, of Parent (collectively, the "Coinvest Shares"), which Coinvest Shares shall be subject to certain repurchase and other obligations and restrictions set forth in the Management Agreement and in the Stockholders Agreement. 5. Benefit Plans. During the Employment Period, Executive will be entitled to receive traditional employment benefits comparable to those provided to other senior executive officers of the Company (subject to any applicable waiting periods, eligibility requirements, or other restrictions), which may include insurance (medical, dental, life, disability, directors and officers, etc.), retirement plans, and profit sharing plans. 6. Exuenses. The Company, in accordance with policies and practices established by the Board from time to time, will pay or reimburse Executive for all expenses (including travel and cell phone expenses) reasonably incurred by Executive during the Employment Period in connection with the performance of Executive's duties under this Employment Agreement, provided that Executive shall provide to the Company documentation or evidence of expenses for which Executive seeks reimbursement in accordance with the policies and procedures established by the Board from time to time. 7. Vacation. Executive shall be entitled to vacation at the rate of four (4) weeks per year in accordance with the Company's vacation policy. Executive shall make good faith efforts to schedule vacations so as to least conflict with the conduct of the Company's business and will give the Company adequate advance notice of Executive's planned absences. Up to one-half (112) of Executive's unused vacation time may be carried over to subsequent years; provided, however, that in no event shall Executive be entitled to greater than six (6) weeks vacation per year. 8. Confidentiality Inventions and Non-Solicitation Agreement. On the date hereof, Executive shall execute a confidentiality, inventions and non-solicitation agreement, in the form of Exhibit R attached hereto and made a part hereof (the "Confidentiality, Inventions and Non-Solicitation Agreement"). 9. Restrictive Covenants. (a) Executive's Acknowledgment. Executive acknowledges that; (i) Parent and the Company are and will be engaged in the Business during the Employment Period and thereafter; (ii) Parent and the Company are and will be actively engaged in the Business throughout the world; (iii) Executive is one of a limited number of persons who will be developing the Business; (iv) Executive will occupy a position of trust and confidence with the Company after the date of this Employment Agreement and during the Employment Period Executive will become familiar with Parent's and the Company's (and their subsidiaries') trade secrets and with other proprietary and confidential information concerning Parent and the Company (and their subsidiaries and portfolio companies) and the Business (and the business of their subsidiaries and portfolio companies); (v) the agreements and covenants contained in this Section 9 are essential to protect Parent, the Company and the goodwill of the Business and are a condition precedent to the Company entering into this Employment Agreement; (vi) Executive's employment with the Company has special, unique and extraordinary value to the Company and Parent and the Company would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Employment Agreement; and (vii) Executive has means to support Executive and Executive's dependents other than by engaging in the Business, and the provisions of this Section 9 will not impair such ability. (b) Restrictions. Executive will not, during the Restricted Period (as defined below), anywhere in the world (the "Restricted Territory"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) own, operate, manage, control, invest in, perform services for, or engage or participate in any manner in, or render services to (alone or in association with any person or entity) or otherwise assist any person or entity that engages in, or owns, invests in, operates, manages or controls any venture or enterprise that engages in, the Business. 4 The term "Restricted Period" means the period of time from the date of this Employment Agreement until two (2) years after the termination for any reason of Executive's employment relationship with the Company or any successor thereto (whether pursuant to a written agreement or otherwise, including any Renewal Employment Period under this Employment Agreement). The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of Section 9. Nothing contained in Section 9(b) above shall be construed to prevent Executive from investing in the stock of any competing corporation listed on a national securities exchange or traded in the over-the-counter market, but only if Executive is not involved in the business of said corporation and if Executive and Executive's associates (as such term is defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of one percent (1%) of the stock of such corporation. (c) ScopefSeverability. The parties acknowledge that the business of Parent and the Company is and will be national and international in scope and thus the covenants in this Section 9 would be ineffective if the covenants were to be limited to a particular geographic area. If any court of competent jurisdiction at any time deems the Restricted Period unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants set forth in this Section 9 not fully enforceable, the other provisions of this Section 9, and this Employment Agreement in general, will nevertheless stand and to the full extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Employment Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Period be deemed to be the longest period permissible by law, but not in excess of the length provided for in Section 9(b), and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances but not in excess of the territory provided for in Section 9(b)). 10. Equitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing in this Section 10 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. 11. Termination. (a) Death. The Employment Period will terminate immediately upon the death of Executive. If the Employment Period is terminated pursuant to this Section 11(a), the Company shall have no further obligation to Executive (or his estate) except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement. (b) Due Cause. The Company may terminate the Employment Period immediately upon written notice to Executive for a material breach of this Employment Agreement by Executive. The following events will be deemed a material breach of this Employment Agreement (each of which shall constitute "Due Cause"): (i) Executive's material breach of any of Executive's obligations under the Confidentiality, Inventions and Non-Solicitation Agreement, this Employment Agreement, the Stock Purchase Agreement, the Management Agreement or the Stockholders Agreement; or (ii) Executive's continued and deliberate neglect of, willful misconduct in connection with the performance of, or refusal to perform Executive's duties in accordance with Section 3 of this Employment Agreement, which, in the case of neglect or failure to perform, has not been cured within thirty (30) days after Executive has been provided notice of the same; or (iii) Executive's engagement in any conduct which injures the integrity, character or reputation of the Company or which impugns Executive's own integrity, character or reputation so as to cause Executive to be unfit to act in the capacity of President of the Company; or (iv) the Board's good faith determination that Executive has committed an act or acts constituting a felony, or other act involving dishonesty, disloyalty or fraud against the Company. If the Employment Period is terminated pursuant to this Section 11(b), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement. (c) Permanent Disability . The Company may terminate the Employment Period upon the Permanent Disability (as defined below) of the Executive. If the Employment Period is terminated pursuant to this Section 11(c), then Executive will be entitled to receive his salary and benefits accrued through the date of termination and such benefits, if any, as may be provided Executive pursuant to the Company's disability insurance policy with ReliaStar. Except as set forth in the immediately preceding sentence and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section I I (c), the Company shall have no further obligation to Executive. For purposes of this Employment Agreement, the term "Permanent Disability" shall mean that Executive is unable to perform, with or without reasonable accommodation, by reason of physical or mental incapacity, the essential functions of his or her position for ninety (90) or more days in any one hundred twenty (120) day period. The Board shall determine, according to the facts then available, whether and when a Permanent Disability has occurred. Such determination shall not be arbitrary or unreasonable. (d) Termination by the Company without Due Cause. The Company may terminate the Employment Period without Cause upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section 11(d), then Executive will be entitled to receive as severance pay his Base Salary plus benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. Except as set forth in the first sentence of this Section 11(d) and as otherwise described in Section 4(c) of this Employment Agreement, if the Employment Period is terminated pursuant to this Section 11(d), the Company shall have no further obligation to Executive. (e) Voluntary Resignation by Executive. Executive may terminate the Employment Period at any time for any reason upon thirty (30) days' prior written notice. If the Employment Period is terminated pursuant to this Section II(e), the Company shall have no further obligation to Executive except for salary and benefits accrued through the date of termination, and except as otherwise described in Section 4(c) of this Employment Agreement; provided, however, that if Executive is terminating the Employment Period for Good Reason (as defined below), then Executive will be entitled to receive as severance pay his Base Salary plus benefits for a period of twelve (12) months, payable at the Company's regular payroll intervals. Notwithstanding the above, Executive shall receive such amounts only if Executive is not in material breach of any of the provisions of the Confidentiality, Inventions and Non-Solicitation Agreement and Section 9 of this Employment Agreement. The following events will be deemed "Good Reason" for which Executive may terminate the Employment Period and receive the severance payments set forth in this Section 11(e): (i) a material diminution of the Executive's responsibilities after notice to the Company and a thirty (30) day opportunity to cure; or (ii) any material breach of this Employment Agreement on the part of the Company (including, but not limited to, any decrease in the Base Salary without the consent of the Executive, or relocation of Executive's place of employment to a location that is greater than fifty (50) miles from the Harrisburg, Pennsylvania metropolitan area), after notice to the Board, and a thirty (30) day opportunity to cure; provided, however, that Executive is not in material breach of any of the terns of this Employment Agreement. (f) General Release. The receipt of any payment as set forth in Sections 11(c)-(e) above shall be contingent upon Executive's execution of a general release of all claims against the Company and its Affiliates (as defined below), substantially in the form attached hereto as Exhibit C. For purposes of this Employment Agreement, the term "Affiliates" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated association or other entity (other than the Company) that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Company including, without limitation, any member of an affiliated group of which the Company is a common parent corporation as provided in Section 144 of the Code. (g) Mitigation. Notwithstanding anything herein to the contrary, to the extent Executive obtains employment during the first six (6) months of the severance period, the Company's severance obligations under this Employment Agreement, including, without limitation, the continuation of Executive's benefits hereunder, shall cease upon the first day of the seventh (7th) month of the severance period. Executive agrees that if Executive accepts other employment during the first six (6) months of the severance period, Executive shall notify the Company in writing within two (2) business days of such acceptance. Executive acknowledges that his failure to abide by this provision shall entitle the Company to recoup all severance pay previously paid to Executive pursuant to this Employment Agreement. (h) Survival. Termination of the Employment Period in accordance with this Section 11, or expiration of the Employment Period, will not affect the provisions of this Employment Agreement that survive such termination, including, without limitation, the provisions in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, and will not limit either party's ability to pursue remedies at law or equity. 12. Attorney's Fees. If either party prevails in a legal action to enforce or protect its rights under this Employment Agreement, then that party shall be entitled to recover reasonable attorneys' fees, costs, and expenses, in addition to all other relief, including but not limited to damages and injunctive relief. 13. Executive Assistance. Both during and after Executive's employment with the Company, Executive shall, upon reasonable notice, famish the Company with such information as may be in Executive's possession or control, and cooperate with the Company, as the Company may reasonably request (with due consideration to Executive's business activities and obligations after the Employment Period), in connection with any litigation, claim, or other dispute in which the Company or any of its Affiliates is or may become a party. The Company shall reimburse Executive for all reasonable out-of-pocket expenses incurred by Executive in fulfilling Executive's obligations under this Section 13. 14. Effect of Prior Agreements. This Employment Agreement, the Management Agreement, the Stockholders Agreement, the Stock Purchase Agreement and the Confidentiality, Inventions and Non-Solicitation Agreement contain the entire understanding between Parent, the Company and Executive relating to the subject matter hereof and supersede any prior employment agreement between Executive, Parent and the Company, including, without limitation, the Old Employment Agreement, or other agreement relating to the subject matter hereof between Parent, the Company and Executive, other than the Incentive Award Agreement, which Incentive Award Agreement shall remain in full force and effect notwithstanding the execution of this Employment Agreement. 15. Modification and Waiver. This Employment Agreement may not be modified or amended, nor may any provisions of this Employment Agreement be waived, except by an instrument in writing signed by the parties. No written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 16. Severability. If, for any reason, any provision of this Employment Agreement is held invalid, such invalidity will not affect any other provision of this Employment Agreement, and each provision will to the full extent consistent with law continue in full force and effect. If any provision of this Employment Agreement is held invalid in part, such invalidity will in no way affect the rest of such provision, and the rest of such provision, together with all other provisions of this Employment Agreement, will, to the full extent consistent with law, continue in full force and effect. 17. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Employment Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.: Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 17. 18. Third Party Beneficiaries. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than the parties to this Employment Agreement and their respective permitted successors and assigns, any rights or remedies under or by reason of this Employment Agreement. 19. Headings. The headings and other captions in this Employment Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Employment Agreement. 20, Governing Law; Arbitration. This Employment Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. Except for disputes arising out of an alleged violation of the Restrictive Covenants set forth in the Confidentiality, Inventions and Non-Solicitation Agreement and in Section 9 of this Employment Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. The arbitration process shall be instigated by either party giving written notice to the other of the desire for arbitration and the factual allegations underlying the basis for the dispute. The arbitration shall be conducted by such alternative dispute resolution service as is agreed to by the parties, or, failing such agreement within thirty (30) days after such dispute arises, by arbitrators selected as described below in accordance with the rules and procedures established by the American Arbitration Association. Only a person who is a practicing lawyer admitted to a state bar may serve as an arbitrator. Each party shall select one arbitrator, and those arbitrators shall choose a third arbitrator; these arbitrators shall constitute the panel. The American Arbitration Association rules for employment arbitration shall control any discovery conducted in connection with the arbitration. The expenses of arbitration (other than attorneys' fees) shall be shared as determined by arbitration. Each side to the claim or controversy shall pay their own attorneys' fees. Any result reached by the panel shall be binding on all parties to the arbitration, and no appeal may be taken. It is agreed that any party to any award rendered in such arbitration proceeding may seek a judgment upon the award and that judgment may be entered thereon by any court having jurisdiction. The arbitration shall be conducted in the Commonwealth of Pennsylvania. 21. Non-Assignability/Binding Effect. This Employment Agreement shall not be assignable by either party without the prior written consent of the other party. This Employment Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. 22. No Strict Construction. The language used in this Employment Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. 10 [Remainder of Page Intentionally Blank; Signature Page to Follow) 11 IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be executed by its duly authorized officer and Executive has signed this Employment Agreement, as of the date first above written. AMES TRUE TEMPER, INC. BYX Its: ?r`esidexk EXECUTIVE John M. Stoner, Jr. 12 Da 4:CHI02 (87309-00915) 60029856v6;?325/200]1Tins:1 ]:37 IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be executed by its duty authorized officer and Executive has signed this Employment Agreement, as of the date first above written. AMES TRUE TEMPER, INC. By; EXECUTIVE John . Stoner Jr, 12 Ooc #rCW02 (89309A0015) 60029856v .021222MTune: 15:13 EXHIBIT A PERFORMANCE BONUS January '02-September `02 BUDGET Percentage of Budget Percentage of Salary 90%-94.9% 10% 95%-99.9% 20% 100% 40% 120% 70% 140% 100% Payment starts at 90% of Budget. Performance of 90%-94.9% pays as indicated - no graduation. Performance of 95%-99.9% pays as indicated - no graduation. Performance of 100% of Budget pays as indicated and is graduated at straight line at the rate of a 1% increase yielding 1.5 % of Base Salary. The above calculations will be conducted for each (A) EBITDA and (B) FCF. The EBITDA calculation will be factored by x 66.7%. The FCF calculation will be factored by x 33.3%. With regard to subsequent years incremental bonus as a percent of incremental EBITDA will be no more than 15% in Year 2 and 10% in Year 3 and beyond. A-1 Eabibit C Confidentiality, Inventions and Non-Solicitation Agrecment D..CFllol tii Hw.oooon w%5U2.2.wivmo21r?16:21 EXHIBIT B CONFIDENTIALITY. INVENTIONS AND NON-SOLICITATION AGREEMENT In consideration of employment by Ames True Temper, Inc., a Delaware corporation, its successors or assigns (the "Company") of John M. Stoner, Jr. ("Executive"), it is understood and agreed as follows: Confidential Information. (a) Executive acknowledges that the Confidential Information (as defined below) constitutes a protectible business interest of the Company and its parent, ATT Holding Co., a Delaware corporation ("Parent"), and covenants and agrees that at all times during the period of Executive's employment, and at all times after termination of such employment, Executive will not, directly or indirectly, disclose, furnish, make available or utilize any Confidential Information other than in the course of performing duties as an employee of the Company. Executive will abide by Company policies and rules as may be established from time to time by it for the protection of its Confidential Information. Executive agrees that in the course of employment with the Company Executive will not bring to the Company's offices nor use, disclose to the Company, or induce the Company to use, any confidential information or documents belonging to others. Executive's obligations under this Section I.a. with respect to particular Confidential Information will survive expiration or termination of this Confidentiality, Inventions and Non-Solicitation Agreement (this "Agreement"), and Executive's employment with the Company, and will terminate only at such time (if any) as the Confidential Information in question becomes generally known to the public other than through a breach of Executive's obligations under this Agreement. (b) As used in this Agreement, the term "Confidential Information" means any and all confidential, proprietary or trade secret information, whether disclosed, directly or indirectly, verbally, in writing or by any other means in tangible or intangible form, including that which is conceived or developed by Executive, applicable to or in any way related to: (i) the present or future business of Parent, the Company or any of their Affiliates (as defined below); (ii) the research and development of Parent, the Company or any of their Affiliates; or (iii) the business of any client or vendor of Parent, the Company or any of their Affiliates. Such Confidential Information includes the following property or information of Parent, the Company and their Affiliates, by way of example and without limitation, trade secrets, processes, formulas, data, program documentation, customer lists, designs, drawings, algorithms, source code, object code, know-how, improvements, inventions, licenses, techniques, all plans or strategies for marketing, development and pricing, business plans, financial statements, profit margins and all information concerning existing or potential clients, suppliers or B-1 vendors. Confidential Information of Parent and the Company also means all similar information disclosed to Parent or the Company by third parties which is subject to confidentiality obligations. The term "Affiliates" means (i) all persons or entities controlling, controlled by or under common control with, Parent and/or the Company, (ii) all companies or entities in which Parent or the Company own an equity interest and (iii) all predecessors, successors and assigns of the those Affiliates identified in (i) and (ii). 2. Return of Materials. Upon termination of employment with the Company, and regardless of the reason for such termination, Executive will leave with, or promptly return to, the Company all documents, records, notebooks, magnetic tapes, disks or other materials, including all copies, in Executive's possession or control which contain Confidential Information or any other information concerning Parent, the Company, any of their Affiliates or any of their respective products, services or clients, whether prepared by the Executive or others. Notwithstanding the foregoing, Executive shall be entitled to retain his personal effects provided any Confidential Information is removed therefrom. 3. Inventions as Sole Property of the Company. (a) Executive covenants and agrees that all Inventions (as defined below) shall be the sole and exclusive property of the Company. (b) As used in this Agreement, the term "Inventions" means any and all inventions, developments, discoveries, improvements, works of authorship, concepts or ideas, or expressions thereof, whether or not subject to patents, copyright, trademark, trade secret protection or other intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice, conceived or developed by Executive while employed with the Company or within one (1) year following termination of such employment which relate to or result from the actual or anticipated business, work, research or investigation of Parent, the Company or any of their Affiliates or which are suggested by or result from any task assigned to or performed by Executive for Parent, the Company or any of their Affiliates. (c) Executive acknowledges that all original works of authorship which are made by him or her (solely or jointly) are works made for hire under the United States Copyright Act (17 U.S.C., et seq.). (d) Executive agrees to promptly disclose to the Company all Inventions, all original works of authorship and all work product relating thereto. This disclosure will include complete and accurate copies of all source code, object code or machine-readable copies, documentation, work notes, flow-charts, diagrams, test data, reports, samples and other tangible evidence or results (collectively, "Tangible Embodiments") of such Inventions, works of authorship and work product. All Tangible Embodiments of any Invention, work of authorship or work product related thereto will be deemed to have been assigned to the Company as a result of the act of expressing any Invention or work of authorship therein. B-2 (e) Executive hereby assigns to the Company (together with the right to prosecute or sue for infringements or other violations of the same) the entire worldwide right, title and interest to any such Inventions or works made for hire, and Executive agrees to perform, during and after employment, all acts deemed necessary or desirable by the Company to permit and assist it, at the Company's expense, in registering, recording, obtaining, maintaining, defending, enforcing and assigning Inventions or works made for hire in any and all countries. Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive's agents and attomeys-in-fact to act for and in Executive's behalf and instead of Executive, to execute and file any documents and to do all other lawfully permitted acts to further the above purposes with the same legal force and effect as if executed by Executive; this designation and appointment constitutes an irrevocable power of attorney and is coupled with an interest. (f) Without limiting the generality of any other provision of this Section 3, Executive hereby authorizes the Company and each of its Affiliates (and their respective successors) to make any desired changes to any part of any Invention, to combine it with other materials in any manner desired, and to withhold Executive's identity in connection with any distribution or use thereof alone or in combination with other materials. (g) Pursuant to the Illinois Executives' Patent Act, Public Act 83-493, this Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of Parent or the Company was used and which was developed entirely on Executive's own time, unless (I) the invention relates (a) to the business of Parent or the Company or (b) to Parent's or the Company's actual demonstrably anticipated research or development; or (2) the invention results from any work performed by Executive for Parent or the Company. (h) The obligations of Executive set forth in this Section 3 (including, but not limited to, the assignment obligations) will continue beyond the termination of Executive's employment with respect to Inventions conceived or made by Executive alone or in concert with others during Executive's employment with the Company and during the one (1) year thereafter, whether pursuant to this Agreement or otherwise. These obligations will be binding upon Executive and Executive's executors, administrators and other representatives. 4. List of Prior Inventions. All Inventions which Executive has made prior to employment by the Company are excluded from the scope of this Agreement. As a matter of record, Executive has set forth on Annex I hereto a complete list of those Inventions which might relate to Parent's or the Company's business and which have been made by Executive prior to employment with the Company. Executive represents that such list is complete. If no list is attached, Executive represents that there are no prior Inventions. B-3 5. Non-Solicitation. (a) Executive will not, during the term of Executive's employment with the Company and for two (2) years thereafter (the "Restricted Period"), directly or indirectly (whether as an owner, partner, shareholder, agent, officer, director, employee, independent contractor, consultant, or otherwise) with or through any individual or entity- i. employ, engage or explicitly solicit for employment any individual who is, or was at any time during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, an employee of Parent, the Company or any of their Affiliates or otherwise seek to adversely influence or alter such individual's relationship with Parent, the Company or any of their Affiliates; or ii. explicitly solicit or encourage any individual or entity that is, or was during the twelve-month period immediately prior to the termination of Executive's employment with the Company for any reason, a customer or vendor of Parent or the Company to terminate or otherwise alter his, her or its relationship with Parent or the Company. (b) The Restricted Period shall be extended for a period equal to any time period that Executive is in violation of this Section S. Equitable Remedies. Executive acknowledges and agrees that the agreements and covenants set forth in this Agreement are reasonable and necessary for the protection of Parent's and the Company's business interests, that irreparable injury will result to Parent and the Company if Executive breaches any of the terms of said covenants, and that in the event of Executive's actual or threatened breach of any such covenants, Parent and the Company will have no adequate remedy at law. Executive accordingly agrees that, in the event of any actual or threatened breach by Executive of any of said covenants, Parent and the Company will be entitled to immediate injunctive and other equitable relief, without posting bond or other security and without the necessity of showing actual monetary damages. Nothing in this Section 5 will be construed as prohibiting Parent or the Company from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of any damages that they are able to prove. No Right to Employment. No provision of this Agreement shall give Executive any right to continue in the employ of the Company or any of its Affiliates, create any inference as to the length of employment of Executive, affect the right of the Company or its Affiliates to terminate the employment of Executive, with or without cause, or give Executive any right to participate in any Executive welfare or benefit plan or other program of the Company or any of its Affiliates. 8. Modification and Waiver. This Agreement may not be modified or amended except by an instrument in writing signed by the parties. No term or condition of this Agreement B-4 will be deemed to have been waived, except by written instrument of the party charged with such waiver. No such written waiver will be deemed to be a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived. 9. Severability. Executive acknowledges that the agreements and covenants contained in this Agreement are essential to protect Parent, the Company and their goodwill. Each of the covenants in this Agreement will be construed as independent of any other covenants or other provisions of this Agreement. It is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent. 10. Notices. Any notice, consent, waiver and other communications required or permitted pursuant to the provisions of this Agreement must be in writing and will be deemed to have been properly given (a) when delivered by hand; (b) when sent by telecopier (with acknowledgment of complete transmission), provided that a copy is mailed by U.S. certified mail, return receipt requested; (c) three (3) days after sent by certified mail, return receipt requested; or (d) one (1) day after deposit with a nationally recognized overnight delivery service, in each case to the appropriate addresses and telecopier numbers set forth below: If to the Company: Ames True Temper, Inc. c/o Wind Point Partners Suite 3300 676 N. Michigan Avenue Chicago, IL 60611 Attn: Richard Kracum Fax: (312) 255-4820 With a copy to: Katten Muchin Zavis 525 West Monroe Street Chicago, Illinois 60661 Attn.; Steven V. Napolitano, Esq. Fax: (312) 902-1061 If to Executive: John M. Stoner, Jr. 804 Nissley Drive Middletown, Pennsylvania 17057 B-5 Each party will be entitled to specify a different address for the receipt of subsequent notices by giving written notice thereof to the other party in accordance with this Section 10. 11. Headings. The headings and other captions in this Agreement are included solely for convenience of reference and will not control the meaning and interpretation of any provision of this Agreement. 12. Governing Law. This Agreement has been executed in the Commonwealth of Pennsylvania, and its validity, interpretation, performance, and enforcement will be governed by the laws of such state, except with respect to conflicts of laws principles. 13. Binding Effect. This Agreement will be binding upon and inure to the benefit of Executive, the Company, and their respective successors and permitted assigns. The Company will be entitled to assign its rights and duties under this Agreement provided that the Company will remain liable to Executive should such assignee fail to perform its obligations under this Agreement. 14, No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any person. B-6 IN WITNESS WIIEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has signed this Agreement, as of the date written below. EXECUTIVE: Date: February2002 John toner, r. AMES TRUE TEMPER, INC. B-7 Doc A M02 18t309-00073) 60029856v6,0=2RO02/rime',15. 13 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and Executive has signed this Agreement, as of the date written below, EXECUTIVE: Date: February _, 2002 John M. Stoner, Jr. AMES TRUE TEMPER, INC. Bl'?/? G???(/ // Its: T?reside)J+ B-7 Doe k:CH102 (87309-00015)600?9H56?b;021?3/200??ime:l7Jl Exhibit D Separation Agreement and Ggneral Release 1 ? 06e K.Cfll@ (211191-06061) 600"U2V2;W111R067?®c1631 SEPARATION AGREEMENT AND GENERAL RELEASE AMES TRITE TEMPER, INC. ("Company'), and JOHN M. STONER, JR ("Executive'), agree that this Separation Agreement and General Release ("Agreement'] sets forth their complete agreement and understanding regarding the termination of Executive's employment with Company. 1. Separation Date. Executive's employment with Company will terminate effective August 24, 2002 (the "Separation Date"). Executive agrees to return all Company property to Company no later than the Separation Date. Except as specifically provided below, Executive shall not be entitled to receive any benefits of employment following the Separation Date. 2. Consideration of Comnam. In consideration for the releases and covenants by Executive in this Agreement, Company will provide Employee with the following: (i) payment of twelve (12) months of salary at Employee's current annual rate of Two Hundred Sixty Thousand Dollars ($260,000.00), less applicable withholdings, payable at regular payroll intervals following the Revocation Period, as set forth in paragraph 1l below-, (hi) payment of the Employer portion of Employee's premiums for continued coverage under Employee''s group health care plan and dental plan until August 24, 2003, if Employee elects, and to the extent Employee is and remains eligible for, such continued cove a ?gBRA and (iii) a pro rated bonus for the period -? commencing October 1, 399 v co through August 24, 2002, less applicable withholdings, which bonus shall be paid at the Company's regular bonus payment date in accordance with the Company's standard bonus payment procedures. 3. Executive- Release of Rights Executive (defined for the purpose of this Paragraph 3 as Executive and Executive's agents, representatives, attorneys, assigns, heirs, executors, and administrators) rekm= the Released Parries (defined as the Company, Parent and any of their past or present employees. agents, msurers, attorneys, adummstators, officials, directors, shareholders, divisions, parents, subsidiaries, predecessors, successors, employee benefit plans, and the sponsors, fiduciaries, or administrators of the Company's employee benefit plans) from any and all liability, claims, demands, actions, causes of action, suits, grievances, debts, sums of money, agreememM promises, damages, back and front pay, costs, expenses, attorneys' fees, and remedies of any type, arising or that may have arisen out of or in connection with Executive's employment with or termination of employment from the CompanN from the beginning of time to the date hereof; including but not limited to claims, actions or liability under. (1) Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1966, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Workers' Adjustment and Rcmuning Notification, the Employee Retirement Income Security Act of 1974, and the Illinois Human Rights Act; (2) any other federal, state or local statute, ordinance, or regulation regarding employment, termination of employment, or discrimination in employment, and (3) the common law of any state relating to employment contracts, wrongful discharge, defamation, or any other matter. 4. Waiver of Reinsiatemem. Exectuive waives any reinstatement or future employment with Company and agrees never to apply for employment or otherwise seek to be p *C19V1(315494900pi)6 l5Sv3,W[4rOWimclSV5 hired, rehired, employed, re-employed, or reinstated by Company or any of its affiliated companies or corporations. 5. No Disparagement or Encouragement of Claims. Executive agrees not to make any oral or written statement that disparages or place, Parent or the Company in a false or negative light. Executive fiuther agrees not to encourage r assist any person who files a lawsuit, charge, claim or complaint against the Released Parties (as defined in Paragraph 3) unless Executive is required to render such assistance pursuant to a lawful subpoena or other legal obligation. The Board of Directors (and each of its individual members) and the Chief Executive Officer of the Company agree not to make 0 as my be as-does the besiness of Ow y o written statement that disparages or places Executive in a false or negative light; and these individuals further agree not to encourage or assist any person who files a lawsuit, charge, claim or complaint against Executive unless sucli individuals are required to render such assistance pursuant to a lawful subpoena or other legal obligation 6. Cooperation of Executor. Executive agrees to cooperate with Company in any reasonable manner as Company may request, including but not limited to furnishing information to and otherwise consulting with the Company; and assisting Company in any litigation or potential litigation or other legal matters, including but not limited to meeting with and fidly answering the questions of Company or its representatives or agents, and testifying and preparing to testify at any deposition or trial. Company agrees to comper we Executive for any reasonable out of pocket expenses incurred as a result of such cooperation. 7. Non-admissio?Rr*5??erbabty. This Agreement does not constitute an admission by Company that any action it took with respect to Executive was wrongful, unlawful or in violation of any local, state, or federal act, statute, or constitution, or susceptible of inflicting any damages or injury on Executive, and Company specifically denies any such -wrongdoing or violation. This Agreement is entered into solely to resolve fully all matters related to or arising out of Executive's employment with and termination from Company, and its execution, and implementation may not be used as evidence, and shall not be admissible in a subsequent proceeding of any kind, except one alleging a breach of this Agreement. 8. Sev . The provisions of this Agreement shall be severable and the invalidity of any provision shall not affect the validity of the other provisions. 9. Governing Law. This Agreement shall be governed by and construed in accordance with laws and judicial decisions of the Commonwealth of Pennsylvania, without regard to its principles of conflicts of laws. 10. Scone of A e m t. Executive understands that he remains bound to those provisions in the Confidentiality, Inventions, and Non-Solicitation Agreement and his Amended and Restated Employment Agreement (the "Employment Agreement"), both signed in February 2002, which survive the termination of his employment, including those provisions in Paragraphs 8-11 and 13 of the Employment Agreement, as such provisions have been modified by that certain DW O'CMM (2154%M)) 6 I550,OV14WOVTIm .15:45 Bonus Payment and Non-Compete Extension dated as of August 14, 2002. Except as specifically set forth in such provisions, this Agreement contains the entire agreement and understanding between Executive and Company concerning the matters described herein, and supersedes all prior agreements, discussions, negotiations, understandings and proposals of the parties. The terms of this Agreement cannot be cbmged except in a subsequent document signed by both parties- 11. Revocation Period. Executive has the right to revoke this Agreement for up to seven days after he signs it. In order to revoke this Agreement, Executive must sign and send a written notice of the decision to do so, addressed to Richard Dell, Chief Executive Officer of the Company at 465 Railroad Avenue, Camp Hill, PA 17011, and that written notice must be received by Company no later than the eighth day after Executive signed this Agreement. If Executive revokes this Agreement, Executive will not be entitled to any of the consideration from Company described in paragraph 2 above. 12. Voluntary Execution of Ate. Executive acknowledges that: a. Executive has carefully read this Agreement and fully understands its meaning; b. Executive had the opportunity to take up to 21 days after receiving this Agreement to decide whether to sign it; C. Executive understands that the Company is hereby advising him, m writing, to consult with an attorney before signing it; d Executive is signing this Agreement, knowingly, voluntarily, and without any coercion or duress; and e. everything Executive is receiving for signing this Agreement is described in the Agreement itself; and no other promises or representations have been trade to cause Executive to sign it. AMES TRUE TEMPER, INC. ?. - By: 71v. St ner Title: Dated 5-19-OQ Dated: 2z -6 Z Dee•:Qa02 r2154964)0001) 60MUS ;W1VL002fTi :15:/5 CERTIFICATE OF SERVICE I hereby certify that on January 9, 2006, I caused a true and correct copy of the foregoing Praecipe to Substitute Exhibits to be served on the following by first class mail, postage prepaid: Jane L. Hanson Milbank, Tweed, Hadley & McCoy LLP I Chase Manhattan Plaza New York, NY 10005-1413 Y c Michael -f. Dash, Jr. ,^, r' C7 -n .? n t , ci c. .._ O STRADLEY RONON STEVENS & YOUNG, LLP David C. Franceski, Jr. (SBN: 32664) Thomas W. Dymek (SBN: 86248) 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 Attorneys for Defendants Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart AMES TRUE TEMPER, INC. Plaintiff, VS. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR., and JUDY A. SC14UCHART Defendants. COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Civil Action No. 05-6737 STIPULATION FOR EXTENSION OF TIME Plaintiff Ames True Temper, Inc. and Defendants Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart ("Defendants") hereby agree and stipulate that Defendants shall have 60 days from the date of service of Plaintiff's Complaint, i.e., until March 10, 2006, to Mic)2 el L. Banks (I.D. No. 305052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS, LLP 1701 Market Street Philadelphia, PA 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) nswer,_move or otherwise respond to the Complaint. David C. Franceski, Jr., Esquire (I.D. No. 32664) Thomas W. Dymek, Esquire (I.D. No. 86248) STRADLEY RONON STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103 (215) 564-8000 (215) 564-8120 (facsimile) Attorneys for Plaintiff Date: G -Y Attorneys for Defendants r CERTIFICATE OF SERVICE I, Michael E. Dash, Jr., hereby certify that on February 6, 2006, I caused a true and correct copy of the foregoing Stipulation for Extension of Time to be served by first class mail on the following: Thomas W. Dymek, Esquire Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 Michael E. Dash, Jr. , STRADLEY RONON STEVENS & YOUNG, LLP David C. Franceski, Jr. (SBN: 32664) Thomas W. Dymek (SBN: 86248) Attorneys for Defendants 2600 One Commerce Square Conn-Selmer, Inc., Steinway Philadelphia, PA 19103-7098 Musical Instruments, Inc., John M. (215) 564-8000 Stoner, Jr., and Judy A. Schuchart AMES TRUE TEMPER, INC. COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Plaintiff, Civil Action No. 05-6737 VS. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR., and JUDY A. SCHUCHART Defendants. ACCEPTANCE OF SERVICE I accept service of the Complaint on behalf of Defendants Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart and certify that I am authorized to do so. David C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire STRADLEY RONON STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103 (215) 564-8000 Attorneys for Defendants Date: February 2, 2006 k CERTIFICATE OF SERVICE I, Michael E. Dash, Jr., hereby certify that on February 6, 2006, I caused a true and correct copy of the foregoing Acceptance of Service to be served by first class mail on the following: Thomas W. Dymek, Esquire Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 Mic el E. Dash, Jr. ?; ' o , ? -?, T ..-{ ? r- ?' ?" r,9 ?_.. c? i - ?":; . -, _ -- ,_ ", -r?, ??? f- i " w < STRADLEY RONON STEVENS & YOUNG, LLP David C. Franceski, Jr. (SBN: 32664) Thomas W. Dymek (SBN: 86248) 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 AMES TRUE TEMPER, INC., Plaintiff, V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR., and JUDY A. SCHUCHART, Defendants. Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Civil Action No. 05-6737 PRELIMINARY OBJECTIONS Defendants, Conn-Selmer, Inc. ("CSI"), Steinway Musical Instruments, Inc. ("Steinway"), John M. Stoner, Jr. ("Stoner") and Judy A. Schuchart ("Schuchart"), by and through their attorneys, Stradley Ronon Stevens & Young, LLP, preliminarily object to and seek the dismissal of Counts I, III, IV, V, VI, VII, VIII and IX of the Complaint of Plaintiff, Ames True Temper, Inc. ("ATT"), and to strike ¶¶30 and 36 of the Complaint, in support of these objections state as follows: ATT, a company engaged in the manufacture of non-powered garden tools, alleges that John M. Stoner, Jr., its former president of sales and marketing, contacted a handful of ATT employees about possible employment with his new company, Conn-Selmer. Two of those employees - the chief financial officer, Judy A. Schuchart, who was already interviewing for work elsewhere at the time, and a marketing executive, Brian Imel -joined Conn-Selmer. Reduced to its essence, these hirings by Conn-Selmer, a company in the business of manufacturing musical instruments that in no way competes with ATT, form the basis for ATT's entire Complaint. Factual Backeround 2. In 2002, a venture capital entity named Wind Point Partners ("WPP") obtained a controlling interest in ATT. As part of its overhaul of the management team at ATT, WPP appointed a new Chief Executive Officer, demoted Stoner to President of Sales and Marketing, and required that all company executives execute new employment contracts. During this forced process, Stoner signed the Amended and Restated Employment Agreement, a copy of which is attached as Exhibit "1" to the Complaint (the "Stoner Employment Agreement"). 3. Among other things, the Stoner Employment Agreement set forth Stoner's compensation to be paid during his employment, which included a bonus. The Stoner Employment Agreement provided that Stoner "shall be eligible to receive a cash bonus based upon the achievement of certain budgeted performance goals" and then provided for the levels of achievement possible under the bonus program. See Stoner Employment Agreement at ¶4(b). 4. The Stoner Employment Agreement also included among its terms a non- competition restrictive covenant. This non-compete provision defined a "Restricted Period" (of two years following Stoner's termination from ATT) and a "Restricted Territory" (of "anywhere in the world") in which Stoner agreed not to compete with ATT's business. See Stoner Employment Agreement at 19(b). 5. At the same time Stoner executed the Stoner Employment Agreement, ATT also required him to agree to a Confidentiality, Inventions and Non-Solicitation Agreement 2 (the "Stoner Non-Solicitation Agreement"), a copy of which is included amid the various attachments labeled Exhibit "2" to the Complaint. 6. The Stoner Non-Solicitation Agreement set forth its own independent definition of a "Restricted Period," which it defined as the period of Stoner's employment with ATT and for two years thereafter. See Stoner Non-Solicitation Agreement at 15(a). During this Restricted Period, Stoner was to refrain from, among other things, employing or "explicitly soliciting" for employment ATT employees. See id. at ¶5(a)(i). Another relevant part of ATT's contract with Stoner concerns the forum in which disputes between the parties are to be litigated. At 120 of the Stoner Employment Agreement, the parties agreed that "[e]xcept for disputes arising out of an alleged violation of the Restrictive Covenants set forth in [the Stoner Non-Solicitation Agreement] and in Section 9 of this Employment Agreement, any claim or controversy arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration." See Stoner Employment Agreement at 120 (emphasis omitted). The Agreement then sets forth detailed provisions for such an arbitration. See id. 8. Schuchart, another member of the ATT management team, agreed to a similar Amended and Restated Employment Agreement and Inventions, Non-Competition and Non-Solicitation Agreement (the "Schuchart Employment Agreement" and "Schuchart Non- Solicitation Agreement," respectively), copies of which are included within the materials attached as Exhibit "3" to the Complaint.' In contrast to ATT's contracts with Stoner, which include a non-competition restrictive covenant in the Stoner Employment Agreement and a non-solicitation restrictive covenant in the separate Stoner Non-Solicitation Agreement, all of Schuchart's restrictive covenants are set forth in one contract, the Schuchart Non-Solicitation Agreement. 9. Similar to the Stoner contracts, the Schuchart Non-Solicitation Agreement requires that "[e]xcept for disputes arising out of an alleged violation of the covenants set forth in the [Schuchart Non-Solicitation Agreement], any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration." See Schuchart Employment Agreement at 118. The Agreement then sets forth detailed provisions for such an arbitration which are substantively identical to those in the Stoner Employment Agreement. See id.; Stoner Employment Agreement at 120. 10. In August 2002, approximately six months after inducing Stoner to enter into the Stoner Employment Agreement, ATT terminated Stoner without cause. In connection with this termination, ATT negotiated with Stoner a Separation and General Release (the "Stoner Separation Agreement"), a copy of which is included within the materials attached as Exhibit "2" to the Complaint. It. The Stoner Separation Agreement provided for the release of certain rights and offered, by way of consideration, a severance payment, payment of certain health benefits, and payment of Stoner's bonus on a prorated basis. See Stoner Separation Agreement at 12. 12. At the same time that ATT negotiated the Stoner Separation Agreement, ATT also sought an extension of Stoner's non-compete restrictive covenant. 13. The parties arrived at an agreement set forth in a letter entitled Bonus Payment and Non-Compete Extension (the "Stoner Non-Compete Extension Agreement"), a copy of which is included in the materials attached as Exhibit "2" to the Complaint. In the Stoner Non-Compete Extension Agreement, Stoner purportedly agreed to extend the Restricted 4 Period "as defined in [¶9 of the Stoner Employment Agreement]" from two to three years following his termination. See Stoner Non-Compete Extension Agreement. 14. The Stoner Non-Compete Extension Agreement did not amend the Restricted Period as defined in the Stoner Non-Solicitation Agreement, which continued to be for a period of two years following Stoner's termination. See Stoner Non-Compete Extension Agreement; Stoner Non-Solicitation Agreement at ¶5(a). 15. As consideration for the Stoner Non-Compete Extension Agreement, ATT offered the same prorated bonus which was provided for in 14(b) of the Stoner Employment Agreement and which was the subject of the Stoner Separation Agreement. See Stoner Non- Compete Extension Agreement. 16. Shortly after his termination from ATT, Stoner gained employment as president and chief executive officer of Conn-Selmer, a company located in Elkhart, Indiana that manufactures musical instruments. Conn-Selmer in no way competes with ATT, a manufacturer of non-powered garden tools. 17. Almost three years after he joined Conn-Selmer, Stoner learned that Schuchart, a colleague whom he knew from their time as employees at ATT, was actively interviewing for a similar position elsewhere. At the time, Schuchart was employed as Chief Financial Officer of ATT. 18. In June 2005, two years and ten months after Stoner's termination from ATT, Schuchart resigned from her position with ATT, and later joined Conn-Selmer as its new Chief Financial Officer. 19. At or about this same time, ATT alleges that Schuchart encouraged other ATT employees to join Conn-Selmer. One more ATT employee that Stoner had contacted, Brian Imel, eventually joined Conn-Selmer. 1. Preliminary objection in the nature of demurrer to Count I and Count IV based on the unenforceability of the Stoner Non-Compete Extension Agreement. 20. Defendants incorporate by reference the foregoing paragraphs as if set forth at length. 21. Counts I and IV of the Complaint are premised on ATT's contention that Stoner's contractual non-solicitation obligations had been extended from two years to three years by operation of the Stoner Non-Compete Extension Agreement. Premised on this contention, Count I alleges that Stoner breached his non-solicitation obligations by soliciting ATT employees for employment with Conn-Selmer within the third year after he left ATT. Count N alleges that Conn-Selmer and Steinway intentionally induced Stoner to engage in that conduct. 22. For three independent reasons, this Court, as a matter of law, should not enforce the purported third year extension of the Stoner Non-Compete Extension Agreement. 23. First, the Stoner Non-Compete Extension Agreement, by its plain terms, purports only to extend the Restricted Period of Stoner's non-compete restrictive covenant defined in section 9 of the Stoner Employment Agreement, not the Restricted Period of Stoner's non-solicitation restrictive covenant defined in the Stoner Non-Solicitation Agreement. 24. Second, ATT did not offer any sufficient or additional consideration in return for Stoner's alleged consent to the Stoner Non-Compete Extension Agreement. The Stoner Non-Compete Extension Agreement states that Stoner will be paid a prorated bonus as consideration for the extension of his obligations from two to three years; however, ATT already had a pre-existing legal duty to pay that prorated bonus. Thus, ATT offered no new consideration to Stoner in return for the Stoner Non-Compete Extension Agreement. 25. Third, a three year non-solicitation period is unreasonable and unenforceable as to time and scope as a matter of law. A three year non-solicitation period as to a former employee, Stoner, working for a non-competitor, Conn-Selmer, does not protect any legitimate business interest of ATT. WHEREFORE, Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart, request that this Court sustain their Preliminary Objections and dismiss with prejudice Count I and Count IV of the Complaint of Plaintiff, Ames True Temper, Inc. II. Preliminary objection in the nature of demurrer to Count V (v. Schuchart), Count VI and Count VII based on the "gist of the action" and economic loss doctrines. 26. Defendants incorporate by reference the foregoing paragraphs as if set forth at length. 27. At Counts V, VI and VII of the Complaint, ATT re-packages as tort claims Schuchart's alleged violation of her contractual non-solicitation obligations from the Schuchart Non-Solicitation Agreement. 28. The "gist of the action" doctrine precludes a plaintiff from recasting a breach of contract action into a tort action. In addition, the related economic loss doctrine bars a plaintiff from recovering purely economic losses suffered as a result of a defendant's allegedly tortious conduct. 29. Schuchart's duty to refrain from soliciting ATT employees for employment elsewhere arises only from the Schuchart Non-Solicitation Agreement. Thus, this contract controls her liability, if any, for her alleged solicitation of ATT employees. Indeed, ATT makes such a contract-based claim for Schuchart's alleged breach of the Schuchart Non- Solicitation Agreement at Count II of the Complaint. 30. Such an attempt to convert a contractual cause of action into multiple torts should be rejected under both the "gist of the action" and economic loss doctrines. 31. Moreover, because Count VI should be dismissed as a matter of law, Count VII, which merely alleges secondary liability as to Conn-Selmer, Steinway and Stoner premised on Count VI, should also be dismissed. WHEREFORE, Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart, request that this Court sustain their Preliminary Objections and dismiss with prejudice Count V (v. Schuchart), Count VI, and Count VII of the Complaint of Plaintiff, Ames True Temper, Inc. III. Preliminary objection in the nature of demurrer to Count III, Count V (v. Conn- Selmer, Steinway and Stoner) and Count IX for failure to state a claim upon which relief may be Granted. 32. Defendants incorporate by reference the foregoing paragraphs as if set forth at length. 33. At Counts III, V and IX of the Complaint, ATT fails to plead claims upon which relief may be granted. Count III 34. Count III alleges a claim for "Tortious Interference with Contractual Relations" asserting that Conn-Selmer, Steinway and Stoner interfered with the Schuchart Employment Agreement by purportedly inducing Schuchart to (a) terminate her employment with ATT, and (b) breach the Schuchart Non-Solicitation Agreement. 35. First, Schuchart was under no obligation to continue her employment with ATT (and, in fact, was actively seeking employment elsewhere), and thus Conn-Selmer, Steinway and Stoner could not have tortiously interfered with any legitimate interest belonging to ATT. Moreover, Schuchart complied with the terms of the Schuchart Employment Agreement with regard to the termination of her employment. 36. Second, ATT alleges absolutely no facts to support their conclusory allegation that Conn-Selmer, Steinway or Stoner induced Schuchart to breach the Schuchart Non-Solicitation Agreement. Count V 37. Count V alleges a claim for "Tortious Interference with Employer's Business" against Conn-Selmer, Steinway and Stoner. 38. No such tort exists under Pennsylvania law as to non-employees and non- competitors of a company.' Count LV 39. Count IX alleges an independent cause of action for "Injunctive Relief." WHEREFORE, Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart, request that this Court sustain their Preliminary Objections and dismiss with prejudice Count III, Count V (v. Conn-Selmer, Steinway and Stoner) and Count IX of the Complaint of Plaintiff, Ames True Temper, Inc. IV. Preliminary objection to compel arbitration in the alternative to dismissal of Count III (v. Stoner), Count V (v. Schuchart), Count VI, Count VII, and Count VIII due to the pendency of a prior agreement to resolve disputes by alternative dispute resolution. 40. Defendants incorporate by reference the foregoing paragraphs as if set forth at length. To the extent that ATT seeks to state a claim under Count V against Schuchart for conduct while she was employed by ATT, such a claims is barred based on the "gist of the action" and economic loss doctrines, as set forth above at ¶¶26-31. 9 41. The Stoner Employment Agreement requires that any claims between ATT and Stoner, except disputes regarding the non-compete restrictive covenant in ¶9 of the Stoner Employment Agreement or the non-solicitation restrictive covenant in the Stoner Non- Solicitation Agreement, be resolved by private arbitration. See Stoner Employment Agreement at ¶20. 42. Similarly, the Schuchart Employment Agreement requires that any claims between ATT and Schuchart, except disputes regarding the restrictive covenants in the Schuchart Non-Solicitation Agreement, be resolved by private arbitration. See Schuchart Employment Agreement at 118. 43. Count III (v. Stoner), Count V (v. Schuchart) and Counts VI-VIII do not allege violations of the restrictive covenants in ¶9 of the Stoner Employment Agreement, the Stoner Non-Solicitation Agreement or the Schuchart Non-Solicitation Agreement. 44. As a result, in the alternative to dismissal, this action should be stayed pending arbitration pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(6), because ATT previously agreed to resolve the claims made against Stoner and Schuchart at Count III (v. Stoner), Count V (v. Schuchart) and Counts VI-VIII through binding arbitration, and ATT must arbitrate those claims in the forum to which it freely and voluntarily agreed to submit those disputes. 45. Those claims asserted against CSI or Steinway that allege secondary liability for claims subject to arbitration should also be submitted for arbitration in the same proceeding. WHEREFORE, Defendants, Conn-Sehner, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart, request that this Court sustain their Preliminary 10 Objections and, in the alternative to dismissal, compel the arbitration of Count III (v. Stoner), Count V (v. Schuchart) and Counts VI-VIII of the Complaint of Plaintiff, Ames True Temper, Inc. and stay this matter pending resolution of the arbitration. V. Preliminary objection to strike scandalous, impertinent and irrelevant matter from IM 30 and 36. 46. Defendants incorporate by reference the foregoing paragraphs as if set forth at length. 47. At 1130 and 36 of the Complaint, ATT interrupts its pleading narrative of the factual background of its case to add irrelevant allegations about a purported sexual relationship between Stoner and Schuchart. 48. ATT makes no attempt (nor could it) to connect these scandalous and impertinent allegations to any of its legal claims. The nature of any personal relationships between the parties is immaterial and inappropriate to proof of the causes of action pleaded by ATT. Consequently, the scandalous, impertinent and irrelevant matter set forth in ¶130 and 36 of the Complaint should be stricken. 11 WHEREFORE, Defendants, Conn-Selmer, hie., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart, request that this Court sustain their Preliminary Objections and strike 1130 and 36 from th"laint of Plaintiff, Ames True Temper, Inc. David C. Franceski, Jr., Esquire (I.D. No. 32664) Thomas W. Dymek, Esquire (I.D. No. 86248) STRADLEY RONON STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103 (215) 564-8000 (215) 564-8120 (facsimile) Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart Dated: March 10, 2006 12 CERTIFICATE OF SERVICE I, Thomas W. Dymek, hereby certify that on March 9, 2006, I caused a true and correct copy of the foregoing to be served upon: VIA FEDERAL EXPRESS Michael L. Banks, Esquire Michael E. Dash, Jr., Esquire MORGAN, LEWIS & BOCKNS, LLP 1701 Market Street Philadelphia, PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be typewritten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please list the within matter for the next Argument Court. CAPTION OF CASE (entire caption must be stated in full) AMES TRUE TEMPER, INC. (Plaintiff) VS. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC. JOHN M. STONER, JR., and JUDY A. SCHUCHART (Defendant) No. 05-6737 Term 1. State matter to be argued (i.e., plaintiff's motion for new trial, defendant's demurrer to complaint, etc.): Defendants' preliminary objections to Complaint 2. Identify counsel who will argue cases: (a) for plaintiff: Michael L. Banks, Morgan, Lewis & Bockius, LLP 1701 Market Street (b) for defendant: is, PA 19103 David C. Franceski, Jr., Stradley, Ronon, Stevens & Young, LLI (Name and Address) 2600 One Commerce Square, Philadelphia, PA 19103-7098 3. I will notify all parties in writing within two days that this case has been listed for argument. 4. Argument Court Date: Mw 17. 9nor, Defendants Date: March 10, 2006 Attorney for Thomas W. Dymek Print your name Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) Attorneys for Plaintiff Ames True Temper, Inc. AMES TRUE TEMPER, INC Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY- CIVIL ACTION V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART, NO: 05-6737 Defendants. JURY TRIAL DEMANDED MOTION FOR AN ORDER ALLOWING RONALD E. RICHMAN, SCOTT A. GOLD AND JOSHUA A. FRIEDMAN TO APPEAR PRO HAC VICE NOW COMES, Michael E. Dash, Jr. and, pursuant to Bar Admission Rule 301, moves this Honorable Court for an order granting leave for Ronald E. Richman, Scott A. Gold and Joshua A. Friedman to appear pro hac vice in the above-referenced matter as counsel on behalf of Ames True Temper, Inc., and in support of this Motion states: Michael L. Banks, Michael E. Dash, Jr., Ronald E. Richman, Scott A. Gold and Joshua A. Friedman represent Ames True Temper, Inc. in this litigation. 10097162. t 1 2. Mr. Dash is licensed to practice and is a member in good standing of the bar of the Courts of the Commonwealth of Pennsylvania. He also is admitted to practice before the United States District Court for the Eastern District of Pennsylvania, the United States District Court for the Middle District of Pennsylvania, and the United States Court of Appeals for the Third Circuit (in addition to other federal courts and state bars). 3. Mr. Richman is a member of Schulte Roth & Zabel LLP ("SRZ"). SRZ has counseled Plaintiff on the issues involved in this action, as well as in other matters since at least August, 2005. Plaintiff has requested that Mr. Richman represent Plaintiff in this action. Messrs. Gold and Friedman are associates of Mr. Richman. 4. Both Mr. Richman and Mr. Gold are members of the bar and admitted to practice law in New York (Mr. Richman since 1982 and Mr. Gold since 1994) and are in good standing before the aforesaid court. Mr. Friedman is a member of the bar and admitted to practice law in California (since 2002) and is in good standing before the aforesaid court. In addition, Mr. Richman is admitted to practice in the United States Supreme Court, the United States Court of Appeals for the First, Second, Third, Sixth and Ninth Circuits and the United States District Courts for the Northern, Southern, Western and Eastern Districts of New York. Mr. Gold is admitted to practice before the United States District Courts for the Southern and Eastern Districts of New York. 5. Mr. Richman, Mr. Gold and Mr. Friedman have not been the subject of any disciplinary action in any jurisdiction 6. This Motion is unopposed. 100971621 2 1. WHEREFORE, Michael E. Dash, Jr. requests this Honorable Court to issue an Order allowing Ronald E. Richman, Scott A. Gold and Joshua A. Friedman to appear pro hac vice on behalf of Ames True Temper, Inc. in this matter. Mic el L. Banks (I.D. N d,"35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) Attorneys for Plaintiff March 27, 2006 Ames True Temper, Inc. 10097162.1 CERTIFICATE OF SERVICE I, Michael E. Dash, Jr., hereby certify that on March 27, 2006, I caused to be served a true and correct copy of the foregoing Motion for an Order Allowing Ronald E. Richman, Scott A. Gold and Joshua A. Friedman to Appear Pro Hac Vice upon the following via first class mail, postage prepaid: David C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 Mic el E. Dash, Jr. 10097162.1 ?., c< <.? ?? r-' , 4,. 'n .? Ti ?,. cfl ??._ C:1:J ? ?;l l l .- al n.) '=J ?. ?•?j '? Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215)963-5387/5495 (215) 963-5001 (facsimile) Attorneys for Plaintiff Ames True Temper, Inc. AMES TRUE TEMPER, INC., Plaintiff, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY -- CIVIL ACTION CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART, NO: 05-6737 Defendants. ANSWER TO PRELIMINARY OBJECTIONS Plaintiff, Ames True Temper, Inc. ("ATT"), by and through its attorneys, Morgan, Lewis & Bockius LLP, as and for its Answer to the March 10, 2006 Preliminary Objections of Defendants, Conn-Selmer, Inc. ("CSI"), Steinway Musical Instruments, Inc. ("Steinway"), John M. Stoner, Jr. ("Stoner"), and Judy A. Schuchart ("Schuchart"), respectfully responds to the numbered paragraphs therein as follows: ATT denies the allegations of the first sentence of paragraph 1, except admits that ATT is a company engaged in the manufacture of non-powered garden tools, and refers the Court to ATT's Complaint which speaks for itself on ATT's allegations in this action ATT admits the allegations of the second sentence of paragraph I that Stoner contacted Schuchart, ATT's chief financial officer, and Brian Imel, ATT's director of marketing, both of whom subsequently became employees of CSI, but after reasonable investigation, ATT denies knowledge or information sufficient to form a belief with respect to the allegation that Schuchart was interviewing for work elsewhere at the time Stoner solicited her for employment. ATT denies the allegations of the third sentence of paragraph 1, except admits ATT's business is not competitive with the business of CSI, and refers the Court to ATT's Complaint for its meaning and effect. Factual Backl4round 2. ATT admits, upon information and belief, the allegations of the first sentence of paragraph 2. Denies the other allegations set forth in paragraph 2, except ATT admits Stoner signed the Amended and Restated Employment Agreement, a copy of which is attached as Exhibit 1 to the Complaint (the "Stoner Employment Agreement"). 3. No responsive pleading is required to Defendant's characterization of the Stoner Employment Agreement in paragraph 3 because it constitutes a written document that speaks for itself. 4. No responsive pleading is required to Defendant's characterization of the Stoner Employment Agreement in paragraph 4 because it constitutes a written document that speaks for itself. 5. ATT denies the allegations of paragraph 5, except ATT admits that at the same time Stoner executed the Stoner Employment Agreement, Stoner executed a Confidentiality, Inventions and Non-Solicitation Agreement (the "Stoner Non-Solicitation Agreement"), attached as Exhibit B to the Stoner Employment Agreement and made a part thereof. iOOe7eeos 2 6. No responsive pleading is required to Defendant's characterization of the Stoner Non-Solicitation Agreement in paragraph 6 because it constitutes a written document that speaks for itself. The first sentence of paragraph 7 constitutes a conclusion of law to which no responsive pleading is required. No responsive pleading is required to Defendant's characterization of the Stoner Employment Agreement in paragraph 7 because it constitutes a written document that speaks for itself. ATT denies the allegations of paragraph 8, except admits that Schuchart signed an Amended and Restated Employment Agreement (the "Schuchart Employment Agreement') and a Confidentiality, Inventions, Non-Competition and Non-Solicitation Agreement (the "Schuchart Non-Solicitation Agreement"), both of which are attached as Exhibit 3 to the Complaint. Defendants' characterization of these agreements as "similar" constitutes a conclusion of law to which no responsive pleading is required, and the written documents speak for themselves. 9. No responsive pleading is required to Defendant's characterizations of the Schuchart Non-Solicitation Agreement, Schuchart Employment Agreement and the Stoner Employment Agreement in paragraph 9 because they constitute written documents that speak for themselves. Defendants' characterization of the arbitration provision set forth in the Schuchart Employment Agreement as "substantially identical to those in the Stoner Employment Agreement" constitutes a conclusion of law to which no responsive pleading is required. 10. ATT denies the allegations of paragraph 10, except admits that ATT terminated Stoner without cause in August 2002 and negotiated with Stoner a Separation 10097960.5 Agreement and General Release (the "Stoner Separation Agreement"), attached as Exhibit 2 to the Complaint, in connection with his termination. 11. No responsive pleading is required to Defendant's characterization of the Stoner Separation Agreement in paragraph 11 because it constitutes a written document that speaks for itself. 12. ATT denies the allegations of paragraph 12, except refers the Court to the Stoner Separation Agreement, dated August 24, 2002, and the Stoner Extension Agreement dated August 14, 2002, both attached as Exhibit 2 to the Complaint. 13. ATT admits that the parties arrived at an agreement set forth in the letter entitled Bonus Payment and Non-Compete Extension (the "Stoner Extension Agreement"), a copy of which is included in the materials attached as Exhibit 2 to the Complaint. No responsive pleading is required to Defendant's characterization of the Stoner Extension Agreement in paragraph 13 because it constitutes a written document that speaks tar itself. 14. The allegation in paragraph 14 constitutes a conclusion of law to which no responsive pleading is required. To the extent a responsive pleading is required, ATT denies the allegation in paragraph 14, and refers the Court to the Stoner Extension Agreement for its meaning and effect. 15. The allegation in paragraph 15 of Defendants' Preliminary Objections constitutes a conclusion of law to which no responsive pleading is required. To the extent a responsive pleading is required, ATT denies the allegation in paragraph 15, and refers the Count to the Stoner Employment Agreement, the Stoner Separation Agreement, and the Stoner Extension Agreement for their meaning and effect. 10097960_; 4 16. ATT denies, except admits that Stoner gained employment as president and chief executive officer of CSI, a company located in Elkhart, Indiana that manufactures musical instruments after his tennination from ATT, and admits that CSI is not engaged in a business competitive with the business of ATT. 17. After reasonable investigation, ATT denies knowledge or information sufficient to form a belief with respect to the allegations set forth in paragraph 17, except ATT admits that Schuchart and Stoner had been co-workers, among other things, and that Schuchart was employed as Chief Financial Officer of ATT. 18. ATT admits that Schuchart resigned her position with ATT and later joined CSI as its new Chief Financial Officer, ATT denies that Schuchart resigned her position with ATT in June 2005. 19. ATT denies, except admits ATT alleges that Schuchart encouraged employees to join CSI and refers the Court to the Complaint which speaks for itself on ATT's allegation in this action, and further admits that Stoner contacted Brian hnel when Inlet was employed by ATT, and that CSI subsequently employed Imel. 1. Response to Defendants' Preliminarv Objections to the First and Fourth Causes of Action. 20. ATT repeats and realleges each and every response in paragraphs 1 through 19 above to the allegations set forth in paragraphs 1 through 19 of Defendants' Preliminary Objections. 21. No responsive pleading is required to Defendant's characterization of the Complaint in paragraph 21 because it constitutes a written document that speaks for itself and the allegations constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 21, except ATT 100979601 5 admits that Stoner breached his non-solicitation obligations by soliciting ATT employees for employment with CSI within the third year after he left ATT and that CSI and Steinway intentionally induced Stoner to engage in that conduct. 22. The allegations in paragraph 22 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 22. 23. The allegation in paragraph 23 constitutes a conclusion of law to which no responsive pleading is required. To the extent a responsive pleading is required, ATT denies that the Stoner Extension Agreement did not also extend the Restricted Period of Stoner's non- solicitation restrictive covenant defined in the Stoner Non-Solicitation Agreement. To the contrary, upon information and belief, Stoner believed that lie was prohibited from soliciting ATT employees through the third anniversary of the termination of his employment with ATT. 24. The allegations in paragraph 24 constitute conclusions of law to which no responsive pleading is required. No responsive pleading is required to Defendant's characterization of the Stoner Extension Agreement in paragraph 24 because it constitutes a written document that speaks for itself. To the extent responsive pleading is required, ATT denies the allegations in paragraph 24. 25. The allegations in paragraph 25 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 25. WHEREFORE, Plaintiff respectfully requests that Defendants' Preliminary Objections with respect to the First and Fourth Causes of Action be overruled and that the Court deny the relief requested by the Defendants. 10097960.5 6 it. Response to Defendants' Preliminary Objections to the Fifth, Sixth and Seventh Causes of Action. 26. ATT repeats and realleges each and every response in paragraphs 1 through 25 above to the allegations set forth in paragraphs 1 through 25 of Defendants' Preliminary Objections. 27. The allegations in paragraph 27 constitute conclusions of law to which no responsive pleading is required. No responsive pleading is required to Defendant's characterization of the Complaint in paragraph 27 because it constitutes a written document that speaks for itself. To the extent responsive pleading is required, ATT denies the allegations in paragraph 27. 28. The allegations in paragraph 28 of constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 28. 29. The allegations in paragraph 29 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in pacagraph 22, except admits ATT's Second Cause of Action sets forth a breach of contract clain against Schuchart and refers the Court to the Complaint specifically for its meaning and effect. 30. The allegations in paragraph 30 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in para.-raph 30. 31. The allegations in paragraph 31 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 31. 100979606 WHEREFORE, Plaintiff respectfully requests that Defendants' Preliminary Objections with respect to the Fifth, Sixth and Seventh Causes of Action be overruled and that the Court deny the relief requested by the Defendants. Ill. Response to Defendants' Preliminarv Objections to the Third Fifth and Ninth Causes of Action. 32. ATT repeats and realleges each and every response in paragraphs 1 through 31 above to the allegations set forth in paragraphs 1 through 32 of Defendants' Preliminary Objections. 33. The allegations in paragraph 33 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 33. 34. The allegations in paragraph 34 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT refers the Court to the Complaint for its meaning and effect. 35. The allegations in paragraph 35 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 35, except admits that Schuchart was under no obligation to continue her employment with ATT, and, after reasonable investigation, ATT has learned that Schuchart was seeking employment elsewhere. 36. ATT denies the allegations in paragraph 36. The Complaint contains numerous allegations of fact that support the conclusion that the Defendants induced Schuchart to breach the Schuchart Non-Solicitation Agreement. 10097960.5 8 37. No responsive pleading is required to Defendant's characterization of the Complaint in paragraph 37 because it constitutes a written document that speaks for itself. To the extent responsive pleading is required, ATT denies the allegations in paragraph 37. 38. The allegations in paragraph 38 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 38. 39. The allegation in paragraph 39 of Defendants' Preliminary Objections constitutes a conclusion of law to which no responsive pleading is required. No responsive pleading is required to Defendant's characterization of the Complaint in paragraph 39 because it constitutes a written document that speaks for itself and refers the Court to the Complaint for its meaning and effect. To the extent responsive pleading is required, ATT denies the allegations in paragraph 39. WHEREFORE, Plaintiff respectfully requests that Defendants' Preliminary Objections with respect to the Third, Fifth and Ninth Causes of Action be overruled and that the Court deny the relief requested by the Defendants. IV. Response to Defendants' Preliminarv Objections to the Third Fifth Sixth Seventh and Eij4ht Causes of Action. 40. ATT repeats and realleges each and every response in paragraphs 1 through 40 above to the allegations set forth in paragraphs 1 through 39 of Defendants' Preliminary Objections. 41. No responsive pleading is required to Defendants' characterization of the Stoner Employment Agreement in paragraph 41 because it constitutes a written document that speaks for itself. To the extent responsive pleading is required, ATT denies the allegations in paragraph 41. 10097060.5 42. No responsive pleading is required to Defendants' characterization of the Schuchart Employment Agreement in paragraph 42 because it constitutes a written document that speaks for itself. To the extent responsive pleading is required, ATT denies the allegations in paragraph 42. 43. The allegations in paragraph 43 constitute conclusions of law to which no responsive pleading is required. No responsive pleading is required to Defendants' characterization of the Complaint in paragraph 43 because it constitutes a written document that speaks for itself. To the extent responsive pleading is required, ATT denies the allegations in paragraph 43. 44. The allegations in paragraph 44 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 44. 45. The allegations in paragraph 45 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 45. WHEREFORE, Plaintiff respectfully requests that Defendants' Preliminary Objections with respect to the Third, Fifth, Sixth, Seventh and Eighth Causes of Action be overruled and that the Court deny the relief requested by the Defendants. V. Response to Defendants' Preliminary Objections to Paraeraphs 30 and 36 of the Complaint. 46. ATT repeats and realleges each and every response in paragraphs I through 46 above to the allegations set forth in paragraphs 1 through 45 of Defendants' Preliminary Objections. 10097960,1 10 47. No responsive pleading is required to Defendant's characterization of the Complaint in paragraph 47 because it constitutes a written document that speaks for itself. ATT denies that the allegations of paragraphs 30 and 36 of the Complaint are irrelevant; to the contrary, such allegations are central to the actions of Stoner and Schuehart which have harmed Plaintiff. 48. The allegations in paragraph 48 constitute conclusions of law to which no responsive pleading is required. To the extent responsive pleading is required, ATT denies the allegations in paragraph 48. WHEREFORE, Plaintiff requests that the Preliminary Objections of Defendants with respect to ¶¶ 30 and 36 of the Complaint be overruled, and that the Court deny the relief requested by the Defendants. FURTHER, Plaintiff respectfully requests that all of Defendants' Preliminary Objections be overruled and that the Court deny the relief requested by the Defendants. Respectfully submitted, C. -'01Ze.A, dn'//T)MCV Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (I.D. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) Attorneys for Plaintiff March 29, 2006 Ames True Temper, Inc. 10097/)605 VERIFICATION 1, Duane Greenly, hereby state as follows: I am employed by Ames True Temper, Inc. as Chief Operating Officer. 2. I am authorized to make this verification for and on behalf of Ames True Temper, Inc. The facts set forth in the foregoing Answer to Preliminary Objections are true and correct to the best of my knowledge, information, and belief, including knowledge and information obtained in the performance of my duties as Chief Operating Officer of Ames True Temper. 4. I verify under the penalties set forth in 18 Pa. C.S.A. § 4904 relating to unsworn falsifications submitted to authorities that the facts set forth in the Complaint are true and correct to the best of my knowledge, information, and belief. Dated: Marchzb, 2006 10103912.1 CERTIFICATE OF SERVICE I, Michael E. Dash, Jr., hereby certify that on March 29, 2006, 1 causcd to he served a true and correct copy of the foregoing Answer to Preliminary Objections and accompanying proposed Order upon the following via first class mail, postage prepaid: David C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire STRADLEY, RONON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 1-?c, e, ooa--A, Y". Michael E. Dash, Jr. r, ?s `? ?- ?4 ,, !; ;;? - ?::> :., _ ?.. , Michael L. Banks (I.D. No. 35052) Michael E. Dash, Jr. (LD. No. 80686) MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, Pennsylvania 19103 (215) 963-5387/5495 (215) 963-5001 (facsimile) Attorneys for Plaintiff Ames True Temper, Inc. AMES TRUE TEMPER, INC. Plaintiff, V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART, Defendants. L RFC MAI 2 g 2006 SY:- - IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY - CIVIL ACTION NO: 05-6737 JURY TRIAL DEMANDED OR''DIlERnn AND NOW, this day om 202006, upon consideration of Michael E. Dash, Jr.'s Motion for an Order Allowing Ronald E. Richman, Scott A. Gold and Joshua A. Friedman to Appear Pro Hac Vice, it is ordered that the motion is GRANTED and Ronald E. Richman, Scott A. Gold, and Joshua A. Friedman are permitted to appear pro hac vice in this matter. A 10097162.1 FUL -ij tv ? it #6 AMES TRUE TEMPER, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART NO. 2005 - 6737 CIVIL TERM IN RE: DEFENDANTS' PRELIMINARY OBJECTIONS BEFORE BAYLEY, GUIDO, JJ. ORDER OF COURT AND NOW, this 22ND day of MAY, 2006 after review of the parties' briefs and having heard argument thereon it is hereby ordered and directed as follows: 1.) Paragraphs 30 and 36 of the complaint are STRICKEN. 2.) Count Nine of the complaint is stricken as a separate count. Although this does not prevent Plaintiff from seeking injunctive relief as a remedy, if appropriate. 3.) Defendants' remaining preliminary objections !chael L. Banks, Esquire Michael E. Dash, Jr., Esquire ,.David C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire Court Administrator By the Edward E. Guido, J. OS 0 `;dd CZ AN 9002 AdVlON6; d C`I;'d ]Hl J0 STRADLEY RONON STEVENS & YOUNG, LLP David C. Franceski, Jr. (SBN: 32664) Thomas W. Dymek (SBN: 86248) 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 AMES TRUE TEMPER, INC., Plaintiff, V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR., and JUDY A. SCHUCHART, Defendants. Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Civil Action No. 05-6737 NOTICE OF APPEAL Notice of given that Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart, appeal to the Superior Court of Pennsylvania from the Order entered in this matter on the 22nd day of May, 2006, regarding the Court's denial of Preliminary Objections to enforce an agreement for alternative dispute resolution. This Order has been entered in the docket as evidenced by the attached copy of the docket entries. A request for transcript is not the proceedings below. because there is no verbatim record of David C. Franceski, Jr., Esquire (I.D. No. 32664) Thomas W. Dymek, Esquire (I.D. No. 86248) STRADLEY RONON STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103 (215) 564-8000 (215) 564-8120 (facsimile) Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart Dated: June 19, 2006 15Y5511 Cumberland County Prothonotary's Office Page 1 Civil Case Print 2005-06737 AMES TRUE TEMPER INC (vs) CONN-SELMER INC ET AL Reference No..: Filed........: 12/27/2005 Case Type ..... : COMPLAINT Time.........: 3:31 Judgment......: 00 Execution Date 0/00/0000 Judge Assigned: GUIDO EDWARD E Jury Trial.... Disposed Desc.: Disposed Date. 0/00/0000 ------------ Case Comments ---------- Higher Crt 1.: Higher Crt 2.: ******************************************************************************** General Index Attorney Info AMES TRUE TEMPER INC PLAINTIFF DASH MICHAEL E JR 465 RAILROAD AVENUE CAMP HILL PA 17011 CONN-SELMER INC DEFENDANT 600 INDUSTRIAL PARKWAY ELKHART IN STEINWAY MUSICAL INSTRUMENTS DEFENDANT INC 800 SOUTH STREET SUITE 305 WALTHAM MA STONER JOHN M JR DEFENDANT 51251 PEBBLE BEACH COURT GRANGER IN SCHUCHART JUDY A DEFENDANT 50593 HOLLYBROOK DRIVE GRANGER IN ******************************************************************************** * Date Entries ******************************************************************************** - - - - - - - - - - - - - FIRST ENTRY - - - - - - - - - - - - - - 12/27/2005 COMPLAINT - CIVIL ACTION ------------------------------------------------------------------- 1/13/2006 PRAECIPE TO SUBSTITUTE EXHIBITS - BY MICHAEL L BANKS ESQ FOR PLFF ------------------------------------------------------------------- 2/07/2006 STIPULATION FOR EXTENSION OF TIME - BY MICHAEL L BANKS ESQ ADN DAVID C FRANCESKI JR ESQ FOR DEFTS ------------------------------------------------------------------- 2/07/2006 ACCEPTANCE OF SERVICE FOR DEFTS - BY DAVID C FRANCESKI JR ESQ FOR DEFTS ------------------------------------------------------------------- 3/10/2006 PRELIMINARY OBJECTIONS - THOMAS W DYMEK ESQ ------------------------------------------------------------------- 3/10/2006 PRAECIPE FOR LISTING CASE FOR ARGUMENT - DEFTS' PRELIMINARY OBJECTIONS TO COMPLAINT - THOMAS W DYMEK ESQ ------------------------------------------------------------------- 3/28/2006 MOTION FOR AN ORDER ALLOWING RONALD E RICHMAN SCOTT A GOLD AND JOSHUA A FRIED MAN TO APPEAR PRO HAC VICE BY MICHAEL E DASH JR ATTY FOR PLFF ------------------------------------------------------------------- 3/29/2006 ANSWER TO PRELIMINARY OBJECTIONS - BY MICHAEL E DASH JR ATTY ------------------------------------------------------------------- 3/30/2006 ORDER - DATED 03-30-06 - IN RE: UPON CONSIDERATION OF MICHAEL E DASH JR'S MOTION FOR AN ORDER ALLOWING RONALD E RICHMAN-SCOTT A GOLD & JOSHUA A FRIEDMAN TO APPEAR PRO HAC VICE-IT IS ORDERED THAT THE MOTION IS GRANTED AND RONALD E RICHMAN-SCOTT A GOLD & JOSHUA A FRIEDMAN ARE PERMITTED TO APPEAR PRO RAC VICE IN THIS MATTER - BY EDGAR B BAYLEY J - COPIED AND MAILED 03-31-06 ------------------------------------------------------------------- 5/23/2006 ORDER OF COURT - DATED 05-22-06 - IN RE: DEFTS' PRILIMINARY OBJECTIONS-ORDERED AS FOLLOWS: 1: PARAGRAPHS 30 & 36 ARE STRICKEN 2: COUNT NONE OF COMPLAINT IS STRICKEN AS A SEPARATE COUNT-ALTHOUGH THIS DOES NOT PREVENT PLFF FROM SEEKING INJUNCTIVE RELIEF AS A REMEDY IF APPROPRIATE 3: DEFTS' REMANING PRELIMINARY OBJECTIONS ARE OVERRULED - BY EDWARD E GUIDO J - COPIED AND MAILED 05-23-06 - - - - - - - - - - - - - - LAST ENTRY - - - - - - - - - - - - - - PYS511 Cumberland County Prothonotary's Office Page 2 Civil Case Print 2005-06737 AMES TRUE TEMPER INC (vs) CONN-SELMER INC ET AL Reference No..: Filed........: 12/27/2005 Case Type.....: Judgment......: COMPLAINT 00 Time.........: Execution Date 3:31 0/00/0000 Judge Assigned: Disposed Desc.: GUIDO EDWARD E Jury Trial.... Disposed Date. 0/00/0000 ------------ Case Comments ----------- -- Higher Crt 1.: Higher Crt 2.: *************************************** ************** *************** ************ * Escrow Information * Fees & Debits Beg Bal Pmts/Adj End Bal ******* * ** ************ ******************************** ****** ** ****** **** ** * ** COMPLAINT 35.00 35.00 .00 TAX ON CMPLT .50 .50 .00 SETTLEMENT 5.00 5.00 .00 AUTOMATION 5.00 5.00 .00 JCP FEE 10.00 - 10.00 --------- --- .00 --------- ------------- 55.50 - 55.50 .00 ******************************************************************************** * End of Case Information CERTIFICATE OF SERVICE I, Thomas W. Dymek, hereby certify that on June 19, 2006, I caused two true and correct copies of the foregoing to be served via Federal Express upon: Michael L. Banks, Esquire Michael E. Dash, Jr., Esquire Morgan, Lewis & Bockius, LLP 1701 Market Street Philadelphia, PA 19103-2921 Joshua Friedman, Esquire Ronald E. Richman, Esquire Schulte, Roth & Zabel, LLP 919 Third Avenue New York, NY 10022 Honorable Edward E. Guido, Jr. Court of Common Pleas of Cumberland County Cumberland County Courthouse 1 Courthouse Square Carlisle, PA 17013 Ms. Susan Stoner Official Court Reporter Cumberland County Courthouse 1 Courthouse Square, 4t' Floor Carlisle, PA 17013 Ms. Taryn Dixon Court Administrator Court of Common Pleas of Cumberland County 1 Courthouse Square, 3R Carlisle, PA 17013 O + L w fi- < 7 '?1 --1 _,. Ames True Temper, Inc. Plaintiff V. Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A.Schuchart Defendants IN THE COURT OF COMMON PLEAS FOR THE COUNTY OF CUMBERLAND, PENNSYLVANIA CIVIL ACTION No. 05-6737 ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly withdraw the appearance of Michael L. Banks, Esquire and Michael E. Dash, Jr., Esquire of Morgan, Lewis & Bockius, LLP on behalf Plaintiff in the above-referenced matter and enter the appearance of Mark D. Bradshaw, Esquire. Date: June Za, 2006 Mark D. Bradshaw Attorney I.D. #61975 Stevens & Lee, P.C. 17 North Second Street 16th Floor Harrisburg, PA 17101 (717) 255-7357 Michael L. Bank, Esquire Michael E. Dash, Jr., Esquire Morgan, Lewis & Bockius, LLP 1701 Market Street Philadelphia, PA 19103 (215) 963-5495 SM 643597v1/067855.00030 t IN THE COURT OF COMMON PLEAS FOR THE COUNTY OF CUMBERLAND, PENNSYLVANIA CIVIL ACTION No. 05-6737 CERTIFICATE OF SERVICE I, MARK D. BRADSHAW, ESQUIRE, certify that on this date, I served a true Ames True Temper, Inc. Plaintiff V. Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A.Schuchart Defendants and correct copy of the foregoing Entry of Appearance upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: David C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire Stradley, Ronon, Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103 Date: June a 2006 Michael L. Bank, Esquire Michael E. Dash, Jr., Esquire Morgan, Lewis & Bockius, LLP 1701 Market Street Philadelphia, PA 19103 SLl 643597vl /067855.00030 r_?? t c_ `` l ? r_ _ -_ rl -n ?_= ] -7 +5 ??tl n? __ ? 'J - _? - C 2:59 P.M. 2 7 Appeal Docket Sheet Superior Court of Pennsylvania Docket Numbe : 1065 MDA 2006 Page 1 of 2 Ad* June 23, 2006 Ames True Tempe r, Inc. V. Conn-Selmer, Inc. Steinway Musical Instrument, Inc., etal, Appellant Initiating Document: Notice of Appeal Case Status: Active Case Processing Sta us: June 23, 2006 Awaiting Original Record Journal Number: Case Category: Civil CaseType: Civil Action Law Consolidated Docke t Nos.: Related Docket Nos.: SCHEDULED EVENT Next Event Type: Receive Docketing Statement Next Event Due Date: July 7, 2006 Next Event Type: riginal Record Received Next Event Due Date: August 2, 2006 COUNSEL INFORMATION Appellant Con n-Selmer, Inc., Steinway Musical Instrument, Inc., etal Pro Se: Appoint Counsel Status: IFP Status: No Ap ellant Attorney Information: Atto rney: Franceski, David Carl Bar No.: 32664 Law Firm: Stradley, Ronon, Stevens & Young, LLP Add ess: 2600 One Commerce Square Philadelphia, PA 19103-7098 Pho a No.: (215)564-8062 Fax No.: (215)564-8120 Rec eive Mail: Yes E-M it Address: Rec eive E-Mail: No Appellee Ame s True Temper, Inc. Pro Se: Appoint Counsel Status: IFP Status: App ellee Attorney Information: Atto ney: Dash, Michael Edward Bar o.: 80686 Law Firm: Morgan Lewis & Bockius, LLP Add ess: 1701 Market Street Philadelphia, PA 19103 Pho a No.: (215)963-5495 Fax No.: (215)963-5299 Rec ive Mail: Yes E-M M Address: Rec eive E-Mail: No 6/23/2006 3023 2:59 P.M. Appeal Docket heet Superior Court of Pennsylvania Docket Number, 1065 MDA 2006 Page 2 of 2 June 23, 2006 FEE INFORMATION Paid Fee Date Fee Name Fee Amt Amount Receipt Number 6/23/06 Notice of Appeal 60.00 60.00 2006SPRMD000563 TRIAL COURT/AGENCY INFORMATION Court Below: Cu berland County Court of Common Pleas County: Cum erland Division: Civil Date of Order Appea ed From: May 22, 2006 Judicial District: 9 Date Documents Re ived: June 23, 2006 Date Notice of Appeal Filed: June 20, 2006 Order Type: Order E tered OTN: Judge: Gui o, Edward E. Lower Court Docket No.: 05-6737 Jud e ORIGINAL RECORD CONTENTS Original Record 1 m Filed Date Content/Description Date of Remand f Record: BRIEFS DOCKET ENTRIES Filed Date Docket Entry/Document Name Party Type Filed By June 23, 2006 Notice of Appeal Filed Appellant Conn-Selmer, Inc., Steinway Musical Instrument, Inc., etal June 23, 2006 Docketing Statement Exited (Civil) Middle District Filing Office 6/23/2006 3023 ` r? .7 ! 1 ? it C:. ?• "" ? L- .? a_-i-? y? ? C_- j'il i ? - , ? j?.) ? 1 '?pa 'r. _-: jfft J? c _ t ,r`. `iJ r _ .-? ? AMES TRUE TEMPER V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC.; JOHN M. STONER, JR., AND JUDY A. SCHUGHART IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 2005 - 6737 CIVIL TERM CIVIL ACTION - LAW ORDER OF COURT AND NOW, this 28T" day of JUNE, 2006, Counsel for the Defendants are directed to file a concise statement of matters complained of on appeal within fourteen (14) days of today's date in accordance with Rule of Appellate Procedure 1925(b). 'Zichael L. Banks, Esquire Xoshua Friedman, Esquire ,Zravid C. Franceski, Jr., Esquire ,/neigh A.J. Ellis, Esquire Court Administrator :sld n ? 01 t' 1 `-l' °"! MI °2:117 A4. ''t; . 1 ],ml _{Cl STRADLEY RONON STEVENS & YOUNG, LLP David C. Franceski, Jr. (SBN: 32664) Thomas W. Dymek (SBN: 86248) 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr., and Judy A. Schuchart AMES TRUE TEMPER, INC., Plaintiff, V. CONN-SELMER INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR., and JUDY A. SCHUCHART, Defendants. COURT OF COMMON PLEAS OF CUMBERLAND COUNTY Civil Action No. 05-6737 CONCISE STATEMENT OF MATTERS COMPLAINED OF ON APPEAL Pursuant to the Court's Order dated June 286i, 2006, and Pennsylvania Rule of Appellate Procedure 1925(d), Defendants Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart (collectively "Defendants') set forth the following matters complained of on appeal: (1) Defendants appeal from that part of the court's May 2Vd, 2006 Order overruling Defendants' Preliminary Objection to Counts III, V, and VI-VIII. Defendants objected to the foregoing counts, inter alia, on the grounds that the claims set forth in those counts are subject to an agreement to arbitrate among the parties and, therefore, should have been dismissed pursuant to Pennsylvania Rule of Civil Procedure 1028(a)(6). Defendants appeal on the ground that the Court erred in denying the Defendants' request that Counts III, V and VI-VIII be stayed and compelled to arbitration. The Stoner Employment Agreement provides in pertinent part with respect to arbitration as follows: Except for disputes arising out of an alleged violation of the Restrictive Covenants set forth in the [Stoner Non-Solicitation Agreement] and in Section 9 of [the Stoner] Employment Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved in arbitration. Stoner Employment Agreement at 120 (emphasis added). Similarly, the Schuchart Employment Agreement provided in pertinent part with respect to arbitration as follows: Except for disputes arising out of an alleged violation of the covenants set forth in the Confidentiality, Inventions, Non- Competition and Non-Solicitation Agreement, any controversy or claim arising out of or relating to any provisions of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. Schuchart Employment Agreement at 118 (emphasis added). The Counts which Defendants contend are subject to arbitration allege as follows: • Count III alleges that Stoner intentionally interfered with Schuchart's employment with ATT; • Count V alleges that Schuchart tortiously interfered with ATT's business; • Count VI alleges that Schuchart breached some fiduciary duty she purportedly owed to ATT; and • Counts VII and VIII allege secondary claims against Conn-Selmer, Steinway, Stoner and/or Schuchart premised on the foregoing Counts III, V and VI for their supposed aiding and abetting or conspiracy to engage in the other acts alleged in the Complaint. None of these claims state purported violations of the Restrictive Covenants in 19 of the Stoner Employment Agreement, the Stoner Non-Solicitation Agreement or the provisions of the Schuchart Non-Solicitation Agreement. If the claims had been construed to have done so, they would have been dismissed as duplicative of the contract claims in Counts I and II of the -2- Complaint, and they would have been barred by the "gist of the action" doctrine. See Preliminary Objection in the Nature of Demurrer Based on the "Gist of the Action" and Economic Loss Doctrines at pg. 7 of Defendants' Preliminary Objections. On the other hand, all of the claims which defendants seek to compel to arbitration arise out of or relate to the hiring away from ATT by Defendants of Schuchart and others. That is the gravamen of ATT's claims against defendants. As such, those claims, and even the very question of the arbitrability of those claims, and the construction and interpretation of the agreement covering them, arise out of or relate to the Employment Agreement and other related agreements among the parties. Absent those agreements, and the relationships created by them, ATT does not have, and has not stated, any legal basis for any claim against defendants. The arbitration agreements at issue are in interstate commerce and subject to the Federal Arbitration Act, 9 U.S.C.A. §1 et se g., and the Pennsylvania Arbitration Act, 42 Pa. C.S.A. §§ 7341 et M. Under the Federal Arbitration Act, any doubt about the arbitrability of a dispute should be resolved "`in favor of arbitration."' Mitsubishi Motors Cora. v. Soler Chrysler- Plymouth, Inc. 473 U.S. 614, 626, 105 S. Ct. 3346,87 L. Ed. 2d444 (1985). Even more recently, in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444,123 S. Ct. 2402 (2003) when presented with agreements nearly identical to those at issue in this action, the U.S. Supreme Court held as follows: The parties agreed to submit to the arbitrator "[alll disputes, claims, or controversies arising from or relating to this contract or the relationships which result from this contract." Ibid. (emphasis added). And the dispute about what the arbitration contract in each case means ... is a dispute "relating to this contracts" and the resulting "relationship" Hence the parties seem to have agreed that an arbitrator, not a judge, would answer the relevant questions. See First Options of Chicago. Inc. v. Kaplan, 514 U.S. 938, 943, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995) (emphasis added). 539 U.S. at 451-452, 123 S. Ct. 407. -3- Similarly, for decades, Pennsylvania law has overwhelmingly favored arbitration as the preferred forum for settling disputes. Midomo Co.. Inc. v. Presbyterian Housing Dev. Co.. 739 A.2d 180, 190 (Pa. Super. Ct. 1999) ("[T]he law favors settlement of disputes by arbitration and seeks to promote swift and orderly disposition of claims.'j; Hazleton Area School Dist. v. Bosack. 671 A.2d 277, 282 (Pa. Commw. Ct. 1995) (same); In re Fellman 604 A.2d 263, 265 (Pa. Super. Ct. 1992) (arbitration agreements "encouraged as a prompt, economical and adequate solution of controversies."); Britex Waste Co.. Ltd v. Nathan Schwab & Sons. Inc.. 12 A.2d 473, 483 (Pa. Super. Ct. 1940) ("[W]here the contract provides for arbitration... [i]t is clear every reasonable intendment will be made in favor of the validity of such agreements.") (citations omitted). Indeed, it is the expressed public policy of Pennsylvania to support the enforcement of arbitration clauses. She e.g,, Flightwavs Corp. v. Keystone Helicopter Coro.. 331 A.2d 184, 185 (Pa. 1975); Lytle v. Citifinancial Services, Inc.. 810 A.2d 643, 656 (Pa. Super. 2002). The Pennsylvania Supreme Court has further held that where parties agree to arbitration in a "clear and unmistakable manner, then every reasonable effort will be made to favor such agreements." Emmaus Municipal Authority v. Eltz, 204 A.2d 926, 927 (Pa. 1964) (emphasis added); see also e.g., Shadduck v. Christopher J. Kaclik, Inc.. 713 A.2d 635, 639 (Pa. Super. 1998). Conn-Selmer and Steinway may also rely upon the arbitration provisions in the Stoner and Schuchart Employment Agreements to compel arbitration of ATT's claims against them. Where claims which are "based on the same operative facts and [are] inherently inseparable," are brought against two defendants, one a signatory to an agreement to arbitrate and the other a non- signatory, forcing the non-signatory to try the case in court would render the arbitration agreement "rneaningless" and thwart those public policies favoring arbitration. Sam Reisfeld & Son Import Comvanv v. S.A. Eteco, 530 F.2d 679, 681 (5d' Cir. 1976); Sunkist Soft Drinks. Inc. -4- v. Sunkist Growers. Inc., 10 F.3d 7543, 758 (110 Cir. 1993) (compelling arbitration of claims against non-signatory to arbitration provision where those claims are "intimately founded on and intertwined with "the contract in which the arbitration provision is contained and an "integral relationship" existed with the co-defendant signatory); Weiner v. Pritzker, Nos. 2846, 1011251, 2001 WL 1807929, at *2 (Pa. Com. Pl. Dec. 11, 2001( *"[Mon-signatories to an arbitration agreement can enforce such an agreement where there is an obvious and close nexus between the non-signatories and the contract or the contracting parties.'). The claims against the corporate defendants, Conn-Selmer and Steinway-in Counts VII and VIII-clearly arise out of the same transactions and occurrences as the arbitrated claims against Stoner and Schuchart in Counts III, V and VI. They merely seek to hold the corporate defendants liable for the conduct of Stoner and Schuchart in their alleged capacity as agents, officers or directors of Conn-Sehner and/or Steinway. Consequently, all of the claims in Counts III, V, VI-VIII fall within the ambit of the alternative dispute resolution clauses of those contracts, and this matter should be stayed pursuant to Rule 1028(a)(6), because ATT previously agreed that the disputes shall be resolved by arbitration. David C. Franceski, Jr., Esquire (I.D. bff. 32664) Thomas W. Dymek, Esquire (I.D. No. 86248) STRADLEY RONON STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 (215) 564-8120 (facsimile) Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr, and Judy A. Schuchart Dated: July 13, 2006 -5- CERTIFICATE OF SERVICE I, David C. Franceski, Jr., hereby certify that on July 13, 2006,1 caused a true and correct copy of the foregoing Concise Statement of Matters Complained of on Appeal to be served upon: VIA FEDERAL EXPRESS Mark D. Bradshaw, Esquire STEVENS & LEE 17 North Second Street, 16th Floor Harrisburg, PA 17101 Ronald E. Richman, Esquire Scott A. Gold, Esquire Joshua A. Friedman, Esquire SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, New York 10022 David C. Franceski, Jr. ?,? . . ! . 41 AMES TRUE TEMPER, INC V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR. and JUDY A. SCHUCHART IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 2005 - 6737 CIVIL TERM CIVIL ACTION -LAW IN RE: OPINION PURSUANT TO Pa. R.A.P. 1925 Guido, J., September ? ( , 2006 Plaintiff commenced this action by complaint filed on December 27, 2005. Defendants filed numerous preliminary objections which were briefed and argued by the parties. By order dated May 22, 2006 we granted some and overruled the remainder of those preliminary objections. Defendants have filed this timely appeal in which they allege that we erred in failing to sustain their preliminary objection to Counts III, V, VI, VII and VIII of the complaint on the grounds that the claims set forth therein are subject to an agreement to arbitrate. i The defendants rely upon specific provisions of plaintiff's employment agreements with defendants Stoner and Schuchart. Each agreement contains identical language which requires arbitration of any claim or controversy "arising out of or relating to any provision" of the employment agreement.2 (emphasis added). The causes of action alleged in Count III (Intentional Interference with Contractual Relations), Count V (Tortious Interference with Employer's Business); Count VI (Breach 1 See Concise Statement of Matters Complained of on Appeal. 2 See Exhibit 1 to the complaint, paragraph 20 and Exhibit 3 to the complaint, paragraph 18. t? ?`3 ' ° (? C ." _?! Y C/a ? T l.? ` "i « , x t ; of Fiduciary Duty), Count VII (Aiding and Abetting Breach of Fiduciary Duty) and Count VIII (Conspiracy Tort) are not founded upon (nor are they alleged to have arisen from) any provision of the employment agreements. Therefore, they are not subject to the arbitration provisions of those agreements. DATE Edward E. Guido, J. Al*ichael L. Banks, Esquire Michael E. Dash, Jr., Esquire avid C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire Court Administrator -t Y :sld O? U C) C vo :mot ., vo =G y? ELLIOTT GREENLEAF & SIEDZIKOWSKI, PC John M. Elliott (SBN: 04414) Mark A. Kearney (SBN: 52032) Roger J. Harrington (SBN: 86552) Union Meeting Corporate Center V P.O. Box 3010 925 Harvest Drive, Suite 300 Blue Bell, PA 19422-1956 (215)977-1000 Attorneys for Defendants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. And Judy A. Schuchart AMES TRUE TEMPER, INC. Plaintiff V. COURT OF COMMON PLEAS CUMBERLAND COUNTY CONN-SELMER, INC. STEINWAY Civil Action No. 05-6737 MUSICAL INSTRUMENTS, INC., JOHN M. STONER, JR., and JUDY A. SCHUCHART, Defendants PRAECIPE FOR SUBSTITUTION OF COUNSEL TO THE PROTHONOTARY: Kindly withdraw the appearance of David C. Franceski, Jr., Esquire and Thomas W. Dymek, Esquire and Stradley Ronon Stevens & Young LLP as counsel for Defendants Conn- Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart in the above captioned matter. DAVID C. FRANCESKI, JR. THOMAS W. DYMEK 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 r Kindly enter the appearance of John M. Elliott, Esquire, William R. Balaban, Esquire, Mark A. Kearney, Esquire, Roger J. Harrington, Esquire and Elliott Greenleaf & Siedzikowski, PC as counsel of record for Defendants Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A. Schuchart in the above captioned matter. ELLIOTT GREENLEAF & SIEDZIKOWSKI, P.C. ;4? JOHN M. ELLIOTT (04414) WILLIAM R. BALABAN (19667) MARK A. KEARNEY (52032) ROGER J. HARRINGTON (86552) Union Meeting Corporate Center V P.O. Box 3010 925 Harvest Drive, Suite 300 Blue Bell, PA 19422-1956 (215)977-1000 Dated: March 19, 2007 CERTIFICATE OF SERVICE I, Roger J. Harrington, Esquire, hereby certify that on this day of March 2007, I served a true and correct copy of the foregoing, in the manner set forth below, upon the following: VIA FIRST CLASS MAIL David C. Franceski, Jr., Esquire Thomas W. Dymek, Esquire Strafley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103 Mark D. Bradshaw, Esquire 17 North Second Street, 16th Floor Harrisburg, PA 17101 Ronald E. Richman (pro hac vice) Jill L. Goldberg (pro hac vice) SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, NY 10022 Dated: March) , 2007 r'Fy f -?, ? ?^} ?: _r .+ Ames True Temper, Inc. Plaintiff V. Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A.Schuchart Defendants IN THE COURT OF COMMON PLEAS FOR THE COUNTY OF CUMBERLAND, PENNSYLVANIA CIVIL ACTION No. 05-6737 PRAECIPE TO DISCONTINUE TO THE PROTHONOTARY: Please mark the above-captioned matter settled, satisfied and discontinued with prejudice. STEV N E Date: May 23, 2007 Mark D. Bradshaw Attorney I.D. #61975 17 North Second Street 16th Floor Harrisburg, PA 17101 (717) 255-7357 (717) 234-1099 (Facsimile) mdb@stevenslee.com SCHULTE ROTH & ZABEL LLP Ronald E. Richman Jill L. Goldberg 919 Third Avenue New York, New York 10022 (212) 756-2000 (212) 593-5955 (Facsimile) Counsel for Plaintiff SLI 725111 vl /067855.00030 w Ames True Temper, Inc. Plaintiff V. Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner, Jr. and Judy A.Schuchart Defendants IN THE COURT OF COMMON PLEAS FOR THE COUNTY OF CUMBERLAND, PENNSYLVANIA CIVIL ACTION No. 05-6737 CERTIFICATE OF SERVICE I, MARK D. BRADSHAW, ESQUIRE, certify that on this date, I served a true and correct copy of the foregoing Praecipe to Discontinue upon the following counsel of record, by depositing the same in the United States mail, postage prepaid, addressed as follows: Mark A. Kearney ELLIOTT GREENLEAF & SIEDZIKOWSKI, P.C. 925 Harvest Drive, Suite 300 Blue Bell, PA 19422 W?L Date: May 23, 2007 SL I 725111 v 1 /067855.00030 2 s' i r,;;. Karen Reid Bramblett, Esq. Prothonotary James D. McCullough, Esq. Deputy Prothonotary TO: Mr. Curtis R. Long Prothonotary . Superior Court of Pennsylvania Middle District May 14, 2007 Certificate of Remittal/Remand of Record RE: Ames True Temper, Inc. v. Conn-Selmer, etal No. 1065 MDA 2006 Trial Court/Agency Dkt. Number: 05-6737 Trial Court/Agency Name: Cumberland County Court of Common Pleas Intermediate Appellate Court Number: 100 Pine Street. Suite 400 Harrisburg, PA 17101 717-772-1294 www.superior.court.state.pa.us Annexed hereto pursuant to Pennsylvania Rules of Appellate Procedure 2571 and 2572 is the entire record for the above matter. Contents of Original Record: Original Record Item Filed Date Description Parts October 10, 2006 2 Date of Remand of Record: JUN 2 6 2O07 ORIGINAL RECIPIENT ONLY - Please acknowledge receipt by signing, dating, and returning the enclosed copy of this certificate to our office. Copy recipients (noted below) need not acknowledge receipt. VIC Z:Szds Signature Printed Name Date /alv v ? t 3.S13018/07 NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P.65.37 AMES TRUE TEMPER, INC., IN THE SUPERIOR COURT OF PENNSYLVANIA V. CONN-SELMER, INC., STEINWAY MUSICAL INSTRUMENT, INC., ETAL, Appellant NO. 1065 MDA 2006 Appeal from the Order Entered May 22, 2006 In the Court of Common Pleas of CUMBERLAND County CIVIL at No(s) : 05-6737 BEFORE: BENDER, PANELLA, and TAMILIA, JJ. MEMORANDUM: FILED: May 14, 2007 Appellants, Conn-Selmer, Inc., Steinway Musical Instruments, Inc., John M. Stoner and Judy A. Schuchart, appeal from the order entered on May 22, 2006, by the Honorable Edward E. Guido, Court of Common Pleas of Cumberland County. After careful review, we affirm. For nearly 25 years, John Stoner ("Stoner") was employed by Ames True Temper ("ATT") or one of its predecessor business organizations. During this time, Stoner worked in various roles for ATT, including President and Chief Executive Officer. Furthermore, Stoner executed an employment agreement as well as a confidentiality and non-solicitation agreement. By the terms of Stoner's non-solicitation agreement, in the event Stoner was no longer employed by ATT, he was prohibited from soliciting ATT employees until August 24, 2005. Furthermore, Stoner's employment agreement provided for arbitration of all disputes arising from his employment with ATT, f J.S13018/07 with the relevant exception of disputes arising from the non-solicitation agreement, would be subject to arbitration. On August 24, 2002, Stoner and ATT executed a separation agreement and general release, terminating Stoner's employment with ATT. Thereafter, Stoner commenced employment with Conn-Selmer as Conn-Selmer's President and Chief Executive Officer. In this capacity, Stoner began negotiating with ATT chief financial officer Judy Schuchart and ATT marketing executive Brian Imel, ultimately offering both Schuchart and Imel employment with Conn-Selmer. Thereafter, on December 27, 2005, ATT filed a nine count complaint against Stoner, Schuchart, Conn-Selmer, and Conn-Selmer's parent company, Steinway Musical Instruments, Inc. The first two counts of the complaint were allegations of breach of contract against Stoner and Schuchart. The remaining counts in the complaint alleged tortious conduct on the part of each of the defendants, with the final count requesting injunctive relief. In response, Appellants filed preliminary objections asserting, inter aiia, that some of the claims in ATT's complaint were required to be submitted to arbitration. By order dated May 22, 2006, the trial court overruled the relevant preliminary objections, ruling that ATT was not required to submit the contested claims to arbitration. This timely appeal followed. On appeal, Appellants present the following issue for our review: -2- t ].S13018/07 Whether the trial court erred in declining to enforce a pre-existing agreement to arbitrate "any controversy or claim arising out of or relating to any provision of [Appellants' employment agreements] or any other document or agreement referred to [in those agreements]." Appellant's Brief, at 2. We review the denial of a petition to compel arbitration under a plenary standard. Smay v. E.R. Stuebner, Inc., 864 A.2d 1266, 1272- 1273 (Pa. Super. 2004). To determine if arbitration is required, the trial court must employ a two part test. First, the trial court must determine if a valid agreement to arbitrate exists between the parties. Pittsburgh Logistics Systems, Inc. v. Professional Transportation and Logistics, Inc., 803 A.2d 776, 779 (Pa. Super. 2002). If so, the trial court must then determine if the dispute before it falls within the scope of the arbitration agreement. Id. Our standard for determining the scope of an arbitration provision is the same rule that governs the construction of contracts. Id. Specifically, we must determine the scope to which the parties intended "The scope of arbitration is determined by the intention of the parties as ascertained in accordance with the rules governing contracts generally." Id. (quotation omitted). Appellants argue that both conditions have been established for counts III through IX of ATT's complaint, and that therefore, the trial court erred in failing to compel arbitration. ATT concedes that there was a valid agreement to arbitrate between the relevant parties. Appellee's Brief, at 5. -3- J.S13018/07 However, ATT argues, and the trial court found, that counts III through IX of ATT's complaint did not fall within the scope of the agreement to arbitrate. The relevant agreement to arbitrate states: Except for disputes arising out of an alleged violation of the Restrictive Covenants set forth in the [Stoner Non- Solicitation Agreement] and in Section 9 of [the Stoner] Employment Agreement, any controversy or claim arising out of or relating to any provision of this Employment Agreement or any other document or agreement referred to herein shall be resolved by arbitration. Amended and Restated Employment Agreement, 2/28/2002, at 10. Schuchart's employment agreement with ATr contains a substantially similar clause. Amended and Restated Employment Agreement, 6/28/2002, at 8. We have previously held that an agreement to arbitrate which claims to apply to "[a]ny controversy or Claim arising out of or related to the Contract" constituted an unlimited arbitration clause. Smay, 864 A.2d at 1273-1274. In Smay, as the clause was unlimited, the parties to the contract could have been compelled to arbitrate any claim that implicated a contractual obligation, even if the claim sounded in tort. Id., at 1274; See also Pittsburgh Logistics Systems, 803 A.2d at 782. As a result, we explicitly held that all contract disputes does mean all contract disputes unless otherwise agreed by the parties. Hence, even assuming that the controversy sought to be decided at arbitration concerned a party's negligence, arbitration is appropriate. Smay, 864 A.2d at 1276. -4- J.S13018/07 In the present case, the arbitration clause takes the form of an unlimited clause, as it uses language substantially similar to that in Smay and Pittsburgh Logistics Systems. However, unlike Smay and Pittsburgh Logistics Systems, the clause contains a prefatory limited exception: "except for disputes arising out of an alleged violation of the Restrictive Covenants". At their base, each of the disputed counts relies upon allegations of violations of the restrictive covenants. Pursuant to the restrictive covenants in Stoner's non-solicitation agreement with ATT, Stoner promised that he would not "explicitly solicit for employment any individual who is, or was [within the prior year] an employee of [ATT or its parent companies]." Non-solicitation agreement, 2/2002, at B-4. Count III of ATT's complaint alleges that Conn-Selmer, Steinway, and Stoner interfered with ATT's contractual relationship with Schuchart by inducing her to terminate her employment with ATT. The claim presented in count III arises from the duties implicated by the non- solicitation agreement. As such, the employment agreement explicitly exempts the claims from the arbitration mandate. Count IV of ATT's complaint sets forth a claim based upon an allegation that Conn-Selmer and Steinway interfered with ATT's contractual relationship with Stoner by inducing Stoner to breach his obligations under the non-solicitation agreement. As before, this claim arises from the duties -5- I-S13018/07 implicated by the non-solicitation agreement. Accordingly, the claim is exempt from the agreement to arbitrate. Count V of ATT's complaint asserts a claim grounded in an allegation that the Appellants "systematically solicited and induced ATT employees to leave their employment with ATT" to the detriment of ATT's interests. This claim is clearly related to the duties set forth by the non-solicitation agreement, and is therefore exempt from the agreement to arbitrate. Counts VI and VII of ATT's complaint are based upon a claim that Schuchart breached a fiduciary duty to ATT by "encouraging several important ATT employees to join Conn-Selmer and performing services for Conn-Selmer during her business time." To the extent that these claims are based upon the allegation that Schuchart solicited ATT employees, they arise out of the non-solicitation agreement and are exempt from the agreement to arbitrate. However, to the extent that these claims are based upon the allegation that Schuchart performed services for Conn-Selmer while employed by ATT, they do not arise out of the non-solicitation agreement and are therefore subject to the arbitration clause.' At this time, we need not vacate or reverse the trial court's ruling on this issue as it is not clear that ATT intended this clause to constitute a separate claim. Accordingly, we affirm the trial court's ruling with respect to Count VII with the instruction 1 At this point, Ali' has not alleged that the work performed by Schuchart for Conn-Selmer violated any other restrictive covenant. -6- J.S13018/07 that, should ATT develop a claim based upon this allegation, it should be directed to arbitration upon motion, if necessary. Finally, Count VIII alleges a conspiracy among Appellants to violate the non-solicitation agreements. This allegation is based upon the non- solicitation agreement, and, as such, is exempt from the agreement to arbitrate. As the claims asserted by ATT in its complaint are all related to the non-solicitation agreement, we agree with the trial court that they are exempt from the agreement to arbitrate, and consequently find no error in the decision by Judge Guido. Accordingly, Appellants are due no relief on appeal. Order affirmed. Jurisdiction relinquished. Judgment Entered: J&nd,L, c u roty Prothonotary May 14, 2007 Date: -7- r-? ".. (N) -1 {.l s APR-25-2007 15:59 SUPERIOR COURT OF PA Elliott Greenleaf & SiedzikowslsLp.c. 925 Harvcst Drive Blue Bell, Pennsylvania 19422 Phone: (215) 977-1000 • Pax: (215) 977-1099 ?S13olg-o7 April 13, 2007 By Telecopy and First Class Mail James D. McCullough Deputy prothonotary Superior Court of Pennsylvania 100 pine Street; Suite 400 Harrisburg, PA 17101 APR 18 2007 SCRANTON WILKES-AARRE MIDDLE www,clliottgreenfcaf.com MARK A. KEARNEY 215-477-1016 MAK(joELLIOTTGREENLEAF.COM RE: Conn-Selmer, Inc., et a), Appellants vs. Ames True Temper, Inc., Appellee, No. 1065 MDA 2006 Dear Mr. McCullough: This law firm represents the Appellants in the above referenced appeal. This letter advises that the parties have reached an agreement in principle to settle the matter today, and are diligently working to execute settlement documents very shortly. As such, we expect to be filing a petition to discontinue very shortly. In the interests of judicial economy and candor to the Court, we wanted to make sure that your office was aware of this development and respectfully request that your office advise the assigned Panel of this development. Please advise if the parties can provide any further information. 7177721297 P.02f02 PAC" In ftp dor Court BLUE SELL HARRISBURG Your& truly, MARK A. KE ' Y MAK/ cc.- Karen k Bratnblett, Esq. (by telecopy) Jill L. Goldberg, Esq. (Appellee's counsel) (by email and first class mail) TOTAL P.02