Exhibit 10.3
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
entered into as of the 1st day of October, 2002, by and between Rayovac
Corporation, a Wisconsin corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the
"Executive").
WHEREAS, the Company and the Executive wish to amend and restate the
provisions of the Executive's Employment Agreement dated October 1, 2000, as the
Company desires to employ the Executive upon the terms and conditions set forth
herein; and
WHEREAS, the Executive is willing and able to accept such employment
on such terms and conditions.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
the Executive hereby agree as follows:
1. EMPLOYMENT DUTIES AND ACCEPTANCE. The Company hereby employs the Executive,
and the Executive agrees to serve and accept employment with the Company as
Executive Vice President - Operations. During the Term (as defined below),
the Executive shall devote all of his working time to such employment and
appointment, shall devote his best efforts to advance the interests of the
Company and shall not engage in any other business activities, as an
employee, director, consultant or in any other capacity, whether or not he
receives any compensation therefor, without the prior written consent of
the Board.
2. TERM OF EMPLOYMENT. Subject to Section 4 hereof, the Executive's employment
and appointment hereunder shall be for a term commencing on the date hereof
and expiring on September 30, 2005 (the "Term"). Upon expiration of the
Term, this Agreement shall automatically extend for successive periods of
one (1) year, unless the Executive or the Company shall give notice to the
other at least ninety (90) days prior to the end of the Term (or any annual
extension thereof) indicating that it does not intend to renew the
Agreement.
3. COMPENSATION. In consideration of the performance by the Executive of his
duties hereunder, the Company shall pay or provide to the Executive the
following compensation which the Executive agrees to accept in full
satisfaction for his services, it being understood that necessary
withholding taxes, FICA contributions and the like shall be deducted from
such compensation:
(a) BASE SALARY. The Executive shall receive a base salary equal to Three
Hundred Twenty-Five Thousand Dollars ($325,000) per annum effective
October 1, 2002 for the duration of the Term ("Base Salary"), which
Base Salary shall be paid in equal semi-monthly
installments each year, to be paid semi-monthly in arrears. The Board
will review from time to time the Base Salary payable to the Executive
hereunder and may, in its discretion, increase the Executive's Base
Salary. Any such increased Base Salary shall be and become the "Base
Salary" for purposes of this Agreement.
(b) BONUS. The Executive shall receive a bonus for each fiscal year ending
during the Term, payable annually in arrears, which shall be based on
sixty percent (60%) of Base Salary, provided the Company achieves
certain annual performance goals established by the Board from time to
time (the "Bonus"). The Board may, in its discretion, increase the
annual Bonus. Any such increased annual Bonus shall be and become the
"Bonus" for such fiscal year for purposes of this Agreement.
(c) INSURANCE COVERAGES AND PENSION PLANS. The Executive shall be entitled
to such insurance, pension and all other benefits as are generally
made available by the Company to its executive officers from time to
time.
(d) EXISTING STOCK OPTIONS AND RESTRICTED STOCK AWARDS. All stock options
and restricted stock awards previously granted to the Executive shall
remain in full force and effect in accordance with their terms. If the
Company implements a new stock option program in the future, the
Executive may participate to the extent authorized by the Board.
(e) NEW STOCK OPTIONS. The Company shall Grant to Executive 50,000 new
Stock Options ("New Options") under The 1997 Rayovac Incentive Plan
("1997 Plan"). The grant date of such New Options shall be the
Effective Date and such New Options shall have an exercise price equal
to the opening price on the New York Stock Exchange as of such date.
Fifty Percent (50%) of New Options shall be Time-Vesting Options and
Fifty Percent (50%) shall be Performance-Vesting Options. Time-Vesting
Options shall vest 1/3 October 1, 2003, 1/3 October 1, 2004 and 1/3
October 1, 2005. Subject to the Company meeting performance goals
established by the Board, the Performance-Vesting Options shall vest
1/3 October 1, 2003, 1/3 October 1, 2004 and 1/3 October 1, 2005. The
terms and conditions of such New Options shall be substantially
similar to the terms and conditions of previous option grants.
(f) NEW RESTRICTED STOCK AWARD. The Company also grants the Executive
additional restricted shares of the Company's common stock as follows.
On October 1, 2002, Executive shall be awarded that number of shares
of the Company's common stock equal in value to $346,667 provided,
however, that such award of stock shall include a restriction
prohibiting the sale, transfer, pledge, assignment or other
encumbrance prior to the earlier of October 1, 2005 or a change in
control of the Company (as defined in the 1997 Plan) ("Change in
Control"), and, provided further, that such restricted stock shall be
forfeited to the Company in the event the Executive's employment with
the Company terminates prior to the earlier of
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October 1, 2005 or a Change in Control for any reason other than (i)
termination by the Company without cause, or (ii) termination due to
death or disability. The terms and conditions of such new restricted
stock awards shall be substantially similar to the terms and
conditions of previous restricted stock award grants.
(g) VACATION. The Executive shall be entitled to five (5) weeks vacation
each year.
(h) OTHER EXPENSES. The Executive shall be entitled to reimbursement of
all reasonable and documented expenses actually incurred or paid by
the Executive in the performance of the Executive's duties under this
Agreement, upon presentation of expense statements, vouchers or other
supporting information in accordance with Company policy. All expense
reimbursements and other perquisites of the Executive are reviewable
periodically by the Compensation Committee of the Board, if there be
one, or the Board.
(i) VEHICLE. Pursuant to the Company's policy for use of vehicles by
executives, Executive shall be provided the use of a leased vehicle.
Unless the Executive's employment is terminated by the Company for
Cause or by the Executive pursuant to Section 5(d), Executive shall be
permitted to drive his Company vehicle for the duration of the
12-month period following termination; at the end of such 12-month
period, Executive will be permitted to purchase his Company vehicle at
book value as of such date.
(j) D&O INSURANCE. The Executive shall be entitled to indemnification from
the Company to the maximum extent provided by law, but not for any
action, suit, arbitration or other proceeding (or portion thereof)
initiated by the Executive, unless authorized or ratified by the
Board. Such indemnification shall be covered by the terms of the
Company's policy of insurance for directors and officers in effect
from time to time (the "D&O Insurance"). Copies of the Company's
charter, by-laws and D&O Insurance will be made available to the
Executive upon request.
(k) LEGAL FEES. The Company shall pay the Executive's actual and
reasonable legal fees incurred in connection with the preparation of
this Agreement.
4. TERMINATION.
(a) TERMINATION BY THE COMPANY WITH CAUSE. The Company shall have the
right at any time to terminate the Executive's employment hereunder
without prior notice upon the occurrence of any of the following (any
such termination being referred to as a termination for "Cause"):
(i) the commission by the Executive of any deliberate and
premeditated act taken by the Executive in bad faith against
the interests of the Company;
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(ii) the Executive has been convicted of, or pleads NOLO CONTENDERE
with respect to, any felony, or of any lesser crime or offense
having as its predicate element fraud, dishonesty or
misappropriation of the property of the Company;
(iii) the habitual drug addiction or intoxication of the Executive
which negatively impacts his job performance or the
Executive's failure of a Company-required drug test;
(iv) the willful failure or refusal of the Executive to perform his
duties as set forth herein or the willful failure or refusal
to follow the direction of the CEO or the Board, provided such
failure or refusal continues after thirty (30) days of the
receipt of notice in writing from the CEO or the Board of such
failure or refusal, which notice refers to this Section 4(a)
and indicates the Company's intention to terminate the
Executive's employment hereunder if such failure or refusal is
not remedied within such thirty (30) day period; or
(v) the Executive breaches any of the terms of this Agreement or
any other agreement between the Executive and the Company
which breach is not cured within thirty (30) days subsequent
to notice from the Company to the Executive of such breach,
which notice refers to this Section 4(a) and indicates the
Company's intention to terminate the Executive's employment
hereunder if such breach is not cured within such thirty (30)
day period.
If the definition of termination for "Cause" set forth above conflicts
with such definition in the Executive's time-based or performance-
based stock option agreements (collectively, the "Stock Option
Agreements") or any agreements referred to therein, the definition set
forth herein shall control.
(b) TERMINATION BY COMPANY FOR DEATH OR DISABILITY. The Company shall have
the right at any time to terminate the Executive's employment
hereunder upon thirty (30) days prior written notice upon the
Executive's inability to perform his duties hereunder by reason of any
mental, physical or other disability for a period of at least six (6)
consecutive months (for purposes hereof, "disability" has the same
meaning as in the Company's disability policy), if within 30 days
after such notice of termination is given, the Executive shall not
have returned to the full-time performance of his duties. The
Company's obligations hereunder shall, subject to the provisions of
Section 5(b), also terminate upon the death of the Executive.
(c) TERMINATION BY COMPANY WITHOUT CAUSE. The Company shall have the right
at any time to terminate the Executive's employment for any other
reason without Cause upon sixty (60) days prior written notice to the
Executive.
(d) VOLUNTARY TERMINATION BY EXECUTIVE. The Executive shall be entitled to
terminate his employment and appointment hereunder upon sixty
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(60) days prior written notice to the Company. Any such termination
shall be treated as a termination by the Company for "Cause" under
Section 5.
(e) NOTICE OF TERMINATION. Any termination by the Company for Cause shall
be communicated by Notice of Termination to the other party hereto
given in accordance with Section 8. For purposes of this Agreement, a
"Notice of Termination" means a written notice given prior to the
termination which (i) indicates the specific termination provision in
this Agreement relied upon, (ii) sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii)
if the termination date is other than the date of receipt of such
notice, specifies the termination date of this Agreement (which date
shall be not more than fifteen (15) days after the giving of such
notice). The failure by the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of
Cause shall not waive any right of the Company hereunder or preclude
the Company from asserting such fact or circumstance in enforcing its
rights hereunder.
5. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) WITH CAUSE. If the Executive's employment is terminated with Cause,
the Executive's salary and other benefits specified in Section 3 shall
cease at the time of such termination, and the Executive shall not be
entitled to any compensation specified in Section 3 which was not
required to be paid prior to such termination; provided, however, that
the Executive shall be entitled to continue to participate in the
Company's medical benefit plans to the extent required by law.
(b) WITHOUT CAUSE, DEATH OR DISABILITY. If the Executive's employment is
terminated by the Company without Cause or by reason of death or
disability, then the Company shall pay the Executive the amounts and
provide the Executive the benefits as follows:
(i) The Company shall pay to the Executive as severance, an amount
in cash equal to double the sum of (i) the Executive's Base
Salary, and (ii) the annual Bonus (if any) earned by the
Executive pursuant to any annual bonus or incentive plan
maintained by the Company in respect of the fiscal year ending
immediately prior to the fiscal year in which the termination
occurs, such cash amount to be paid to the Executive ratably
monthly in arrears over the Non-Competition Period (as defined
below).
(ii) For the greater of (i) the 24-month period immediately
following such termination or (ii) the remainder of the Term,
the Company shall arrange to provide the Executive and his
dependents the additional benefits specified in Section 3(c).
Benefits otherwise receivable by the Executive pursuant to
this Section 5(b)(ii) shall cease immediately upon the
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discovery by the Company of the Executive's breach of the
covenants contained in Section 6 or 7 hereof.
(iii) The Executive's accrued vacation (determined in accordance
with Company policy) at the time of termination shall be paid
as soon as reasonably practicable.
(iv) Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state, or local
law and any additional withholding to which the Executive has
agreed.
(v) If the Executive's employment with the Company terminates
during the Term, the Executive shall not be required to seek
other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to
this Section 5.
6. AGREEMENT NOT TO COMPETE.
(a) The Executive agrees that during the Non-Competition Period (as
defined below), he will not, directly or indirectly, in any capacity,
either separately, jointly or in association with others, as an
officer, director, consultant, agent, employee, owner, principal,
partner or stockholder of any business, or in any other capacity,
engage or have a financial interest in any business which is involved
in the design, manufacturing, marketing or sale of batteries or
battery operated lighting devices (excepting only the ownership of not
more than 5% of the outstanding securities of any class listed on an
exchange or the Nasdaq Stock Market). The "Non-Competition Period" is
(a) the longer of the Executive's employment hereunder or time period
which he serves as a director of the Company plus (b) a period of one
(1) year thereafter.
(b) Without limiting the generality of clause (a) above, the Executive
further agrees that during the Non-Competition Period, he will not,
directly or indirectly, in any capacity, either separately, jointly or
in association with others, solicit or otherwise contact any of the
Company's customers or prospects, as shown by the Company's records,
that were customers or prospects of the Company at any time during the
Non-Competition Period if such solicitation or contact is for the
general purpose of selling products that satisfy the same general
needs as any products that the Company had available for sale to its
customers or prospects during the Non-Competition Period.
(c) The Executive agrees that during the Non-Competition Period, he shall
not, other than in connection with employment for the Company, solicit
the employment or services of any employee of Company who is or was an
employee of Company at any time during the Non-Competition Period.
During the Non-Competition Period, the Executive shall not hire any
employee of Company for any other business.
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(d) If a court determines that the foregoing restrictions are too broad or
otherwise unreasonable under applicable law, including with respect to
time or space, the court is hereby requested and authorized by the
parties hereto to revise the foregoing restrictions to include the
maximum restrictions allowed under the applicable law.
(e) For purposes of this Section 6 and Section 7, the "Company" refers to
the Company and any incorporated or unincorporated affiliates of the
Company.
7. SECRET PROCESSES AND CONFIDENTIAL INFORMATION.
(a) The Executive agrees to hold in strict confidence and, except as the
Company may authorize or direct, not disclose to any person or use
(except in the performance of his services hereunder) any confidential
information or materials received by the Executive from the Company
and any confidential information or materials of other parties
received by the Executive in connection with the performance of his
duties hereunder. For purposes of this Section 7(a), confidential
information or materials shall include existing and potential customer
information, existing and potential supplier information, product
information, design and construction information, pricing and
profitability information, financial information, sales and marketing
strategies and techniques and business ideas or practices. The
restriction on the Executive's use or disclosure of the confidential
information or materials shall remain in force until such information
is of general knowledge in the industry through no fault of the
Executive or any agent of the Executive. The Executive also agrees to
return to the Company promptly upon its request any Company
information or materials in the Executive's possession or under the
Executive's control.
(b) The Executive will promptly disclose to the Company and to no other
person, firm or entity all inventions, discoveries, improvements,
trade secrets, formulas, techniques, processes, know-how and similar
matters, whether or not patentable and whether or not reduced to
practice, which are conceived or learned by the Executive during the
period of the Executive's employment with the Company, either alone or
with others, which relate to or result from the actual or anticipated
business or research of the Company or which result, to any extent,
from the Executive's use of the Company's premises or property
(collectively called the "Inventions"). The Executive acknowledges and
agrees that all the Inventions shall be the sole property of the
Company, and the Executive hereby assigns to the Company all of the
Executive's rights and interests in and to all of the Inventions, it
being acknowledged and agreed by the Executive that all the Inventions
are works made for hire. The Company shall be the sole owner of all
domestic and foreign rights and interests in the Inventions. The
Executive agrees to assist the Company at the Company's expense to
obtain and from time to time enforce patents and copyrights on the
Inventions.
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(c) Upon the request of, and, in any event, upon termination of the
Executive's employment with the Company, the Executive shall promptly
deliver to the Company all documents, data, records, notes, drawings,
manuals and all other tangible information in whatever form which
pertains to the Company, and the Executive will not retain any such
information or any reproduction or excerpt thereof.
8. NOTICES. All notices or other communications hereunder shall be in writing
and shall be deemed to have been duly given (a) when delivered personally,
(b) upon confirmation of receipt when such notice or other communication is
sent by facsimile or telex, (c) one day after delivery to an overnight
delivery courier, or (d) on the fifth day following the date of deposit in
the United States mail if sent first class, postage prepaid, by registered
or certified mail. The addresses for such notices shall be as follows:
(a) For notices and communications to the Company:
Rayovac Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx
(b) For notices and communications to the Executive:
Xxxxxxx X. Xxxxxx
0000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Any party hereto may, by notice to the other, change its address for
receipt of notices hereunder.
9. GENERAL.
(a) GOVERNING LAW. This Agreement shall be construed under and governed by
the laws of the State of Wisconsin, without reference to its conflicts
of law principles.
(b) AMENDMENT; WAIVER. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by a written instrument executed by all of the parties
hereto or, in the case of a waiver, by the party waiving compliance.
The failure of any party at any time or times to require performance
of any provision hereof shall in no manner affect the right at a later
time to enforce the same. No waiver by any party of the breach of any
term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in this
Agreement.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Executive, without regard to the duration of his employment by the
Company or reasons for the cessation of such employment, and
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inure to the benefit of his administrators, executors, heirs and
assigns, although the obligations of the Executive are personal and
may be performed only by him. This Agreement shall also be binding
upon and inure to the benefit of the Company and its subsidiaries,
successors and assigns, including any corporation with which or into
which the Company or its successors may be merged or which may succeed
to their assets or business.
(d) COUNTERPARTS. This Agreement may be executed in two counterparts, each
of which shall be deemed an original but which together shall
constitute one and the same instrument.
(e) ATTORNEYS' FEES. In the event that any action is brought to enforce
any of the provisions of this Agreement, or to obtain money damages
for the breach thereof, and such action results in the award of a
judgment for money damages or in the granting of any injunction in
favor of one of the parties to this Agreement, all expenses, including
reasonable attorneys' fees, shall be paid by the non-prevailing party.
(f) NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation during his
employment hereunder in any benefit, bonus, incentive or other plan or
program provided by the Company or any of its affiliates and for which
the Executive may qualify. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or
program of the Company or any affiliated company at or subsequent to
the date of the Executive's termination of employment with the Company
shall, subject to the terms hereof or any other agreement entered into
by the Company and the Executive on or subsequent to the date hereof,
be payable in accordance with such plan or program.
(g) MITIGATION. In no event shall the Executive be obligated to seek other
employment by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement.
(h) EQUITABLE RELIEF. The Executive expressly agrees that breach of any
provision of Sections 6 or 7 of this Agreement would result in
irreparable injuries to the Company, that the remedy at law for any
such breach will be inadequate and that upon breach of such
provisions, the Company, in addition to all other available remedies,
shall be entitled as a matter of right to injunctive relief in any
court of competent jurisdiction without the necessity of proving the
actual damage to the Company.
(i) SEVERANCE AGREEMENT. The Severance Agreement between the parties dated
October 1, 1998 is hereby terminated and all rights and obligations
thereunder are of no further force or effect.
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(j) ENTIRE AGREEMENT. This Agreement and the schedule hereto constitute
the entire understanding of the parties hereto with respect to the
subject matter hereof and supersede all prior negotiations,
discussions, writings and agreements between them with respect to the
subject matter hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
RAYOVAC CORPORATION
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
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