Settlement Agreement Company &

EXHIBIT (10)R


SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE


This Settlement Agreement and Mutual General Release ("Agreement") is entered into as of April 1, 1996, by and between STEVEN L. KLIFF ("KLIFF"), an individual, and ARMOR ALL PRODUCTS CORPORATION, a Delaware corporation ("ARMOR ALL"), and is intended to effect a full release of all claims held by the respective parties, except as limited below.


WHEREAS, KLIFF was employed by ARMOR ALL from September of 1991 until January 12, 1996, most recently in the position of Senior Vice President of Consumer Products;


WHEREAS, on or about January 12, 1996, ARMOR ALL notified KLIFF that it had decided to terminate his employment due to a desire to make a change in management structure, effective immediately;


WHEREAS, a dispute arose between KLIFF and ARMOR ALL concerning his employment relationship, the cessation thereof, the reasons for that cessation and the statements allegedly made about KLIFF by certain employees and agents of ARMOR ALL;


WHEREAS, KLIFF has asserted various employment claims against ARMOR ALL and others, including claims for "breach of employment contract," "wrongful termination in violation of public policy," "violation of Labor Code Section 970," "fraudulent inducement," "interference with contractual relations" and "defamation";


WHEREAS, KLIFF has demanded general, compensatory and punitive damages, including damages for the emotional distress and other personal injuries he allegedly suffered as a conse- quence of said defendants' allegedly wrongful conduct;


WHEREAS, ARMOR ALL has denied any and all liability or wrongdoing to KLIFF based on these or any other claims he has or could have asserted;


WHEREAS, the parties to this Agreement desire to settle and dispose of fully and completely any and all existing or potential disputes, claims and demands arising out of or attributable to the limited employment of KLIFF or the termination thereof;


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In consideration of the covenants undertaken and the releases contained in this Agreement, KLIFF and ARMOR ALL agree as follows:


1. Non-Admission of Liability: ARMOR ALL expressly denies any violation of any of its policies, procedures, state or federal laws or regulations. Accordingly, while this Agreement resolves all issues between KLIFF and ARMOR ALL relating to any alleged violation of ARMOR ALL's policies or procedures or any state or federal law or regulation, this Agreement does not constitute an adjudication or finding on the merits and it is not (and shall not be construed as) an admission by ARMOR ALL of any violation of its policies, procedures, state or federal laws or regulations. Moreover, neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in any proceeding as evidence of or an admission by ARMOR ALL of any violation of its policies, procedures, state or federal laws or regulations. This Agreement may be introduced, however, in any proceeding to enforce the Agreement. Such introduction shall be pursuant to an order protecting its confidentiality.


2. Contract Damages Consideration: In consideration of the covenants and releases set forth herein, ARMOR ALL agrees to pay KLIFF the lump sum of Fifty Thousand Dollars and No Cents ($50,000.00). The parties agree that this sum represents a fair and reasonable settlement of KLIFF's alleged claims for damages for breach of contract. This payment shall be paid in the form of a certified cashier's check made payable to KLIFF as follows: "STEVEN L. KLIFF." Said sum is paid in settlement of all wage, bonus and contract claims KLIFF may possess, and is not intended to represent any alleged tort claims or personal injury damages, which are to be satisfied by the payment of consideration in Paragraph 3 below. KLIFF acknowledges and agrees that this consideration will be subject to taxation and shall be reported to the taxing authorities by the issuance of a Form 1099 at year end. This consideration shall be delivered to KLIFF's attorney within three (3) business days after a copy of this Agreement signed by KLIFF has been delivered to counsel for ARMOR ALL.


3. Personal Injury Damages Consideration: As additional consideration for the covenants and releases set forth herein, ARMOR ALL agrees to pay KLIFF the sum of Three Hundred Thousand Dollars ($300,000.00) (hereinafter, the "Payment"). The Payment shall be paid in the form of a certified cashier's check made payable to KLIFF through his counsel as follows: "Barry B. Kaufman Client Trust Account." While ARMOR ALL expressly denies any wrongdoing or liability to KLIFF, the parties agree that the Payment represents a fair and reasonable settlement of KLIFF's alleged claims for damages for personal injuries, humiliation, personal embarrassment, physical or psychological injury, and loss of personal self-esteem. The Payment is in settlement of KLIFF's alleged wrongful termination, interference with contract,


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defamation and any other tort claims he may possess, and does not represent payment for any alleged contract losses (which are intended to be settled by the consideration set forth in Paragraph 2 above). Accordingly, the parties regard the Payment as one to be excluded from income pursuant to Section 104(a)(2) of the Internal Revenue Code, and ARMOR ALL agrees that the Payment will be paid in gross without withholding or deductions (and shall not be reported to the taxing authorities as if it were "wages" or "income" by the filing of a Form W-2 or Form 1099). ARMOR ALL shall deliver the Payment to KLIFF's attorney within three (3) business days after a copy of this Agreement signed by KLIFF has been delivered to counsel for ARMOR ALL.


4. Continuation of Health Insurance: As further consideration for the covenants set forth herein, ARMOR ALL agrees to pay KLIFF the sum of Five Thousand Five Hundred Sixty Three Dollars and Eight Cents ($5,563.08) as reimbursement for the cost of six months premiums on the HMO medical/group health insurance policy through which KLIFF currently receives benefits under COBRA. This payment shall be paid in the form of a certified cashier's check made payable to KLIFF as follows: "STEVEN L. KLIFF." KLIFF agrees to provide ARMOR ALL with proof of enrollment in the HMO in which he is currently participating.


5. Stock Options: KLIFF presently holds options to purchase shares of ARMOR ALL common stock under ARMOR ALL's 1986 Stock Option Plan. A complete and accurate summary of the options currently held by KLIFF is attached hereto and designated as Attachment "1." Under the terms of the Stock Option Plan, KLIFF has until June 30, 1996, to exercise those options that are vested as of January 31, 1996, the date of his separation.


6. Restricted Stock: KLIFF presently holds shares of restricted stock granted to him under the 1988 Restricted Stock Plan. A complete and accurate summary of KLIFF's Restricted Stock Grants is attached hereto and designated as Attachment "2." The restrictions on the Restricted Stock Grant made to KLIFF on January 21, 1992, have been lifted. To the extent that KLIFF has not received possession of the stock certificates memorializing his ownership of said shares, he may do so at such time as he forwards to ARMOR ALL the monies necessary to pay all appropriate taxes.


7. Repayment of Indebtedness: By his signature below, KLIFF agrees that within three (3) days after the cashier's checks referred to in Paragraphs 2, 3 and 4 of this Agreement have been delivered to his counsel, KLIFF agrees to pay in full any and all indebtedness owed to ARMOR ALL arising out of his employment with ARMOR ALL including, without limitation, the loan made to him documented by KLIFF's Promissory Note in favor of ARMOR ALL dated September 22, l995 (excluding any accrued but unpaid interest charges, which ARMOR ALL agrees to waive and/or


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forgive). A summary of all such indebtedness is attached hereto and designated as Attachment "3." With respect to repayment of the above-mentioned Promissory Note, ARMOR ALL agrees to deliver to KLIFF's counsel the original of said Promissory Note marked "Paid In Full" and both dated and initialed by an authorized representative of ARMOR ALL. By his signature to this Agreement, KLIFF stipulates to the immediate entry of a Right to Attach Order and Writ of Attachment in the event he defaults on this repayment obligation (and waives any defenses thereto).


8. Litigation Cooperation: KLIFF agrees to make himself reasonably available to cooperate in any actual or anticipated litigation or arbitration matter or any federal or state government agency investigation in which ARMOR ALL reasonably requests his assistance based upon his duties with ARMOR ALL. ARMOR ALL shall reimburse KLIFF for his reasonable out-of-pocket expenses in connection with any such assistance.


9. Limited Rights Against Defendants: KLIFF agrees that he will not seek, in any way, any payments or benefits based upon his employment with ARMOR ALL, his separation from employ- ment and/or conduct prior to the execution of this Agreement other than as expressly set forth in this Agreement. KLIFF waives any and all right or entitlement to any such payments or benefits. KLIFF further agrees that he will not file any charge or action, whether based on tort, express or implied contract, or any federal, state or local law, statute or regulation relating to his employment, his eligibility for benefits, or the termination or terms and conditions of his employment. KLIFF agrees that this Agreement may be pleaded as a complete bar to any action or suit before any court or administrative body with respect to any claim relating to his employment with ARMOR ALL or the termination thereof.


10. Protection of "Proprietary Information": KLIFF acknowledges that, in the course of his work as an employee of ARMOR ALL, he has had access to Proprietary Information (as defined below) concerning ARMOR ALL, its products, customers and methods of doing business. KLIFF acknowledges that ARMOR ALL has developed, compiled and otherwise obtained, often at great expense, this ...