Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of the
1st day of October, 2002 ("Effective Date"), by and between Rayovac Corporation,
a Wisconsin corporation (the "Company"), and Xxxxx X. Xxxxx (the "Executive").
WHEREAS, the Executive and the Company were parties to an Employment
Agreement dated September 12, 1996, with respect to the employment of the
Executive by the Company (the "1996 Agreement"); and
WHEREAS, the Executive and the Company modified the terms of Executive's
employment with the Company by entering into an Amended and Restated Employment
Agreement dated April 27, 1998 (the "1998 Agreement"), and again on October 1,
2000 (the "2000 Agreement"), and the parties wish to amend and restate the
provisions of the 2000 Agreement as set forth herein; and
WHEREAS, the Company desires the benefit of the experience, supervision and
services of the Executive and 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, as the Chairman of
the Board of Directors and Chief Executive Officer of the Company,
reporting directly to the Board of Directors of the Company (the "Board").
In connection therewith, as Chairman of the Board and Chief Executive
Officer, the Executive shall oversee and direct the operations of the
Company and perform such other duties consistent with the responsibilities
of Chairman of the Board and Chief Executive Officer, all subject to the
direction and control of the Board. During the Term (as defined below), the
Executive shall devote substantial time to such employment which will be
his primary business activity.
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").
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 Seven
Hundred Thousand Dollars ($700,000) per annum effective October 1,
2002 for the duration of the Term except as set forth in Section 3(n)
below, ("Base Salary"), which Base Salary shall be paid in equal
monthly installments each year, to be paid 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
100% of Base Salary except as set forth in Section 3(n) below,
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) ADDITIONAL SALARY. In addition to the compensation described above,
(i) so long as the promissory note (the "Note") of the Executive
attached hereto as EXHIBIT A, and as previously extended, is not due
and payable in full, the Executive shall receive additional
compensation at an initial rate of Thirty-five Thousand Dollars
($35,000) per annum during the Term, payable (A) at the time the Bonus
is payable hereunder, (B) if no Bonus is payable hereunder, at the
time the Board determines that no Bonus is payable hereunder or (C) if
payment of principal of and interest on the Note is accelerated, at
the time of the Executive's payment in full of the Note; provided,
however, that to the extent the Note is prepaid, the rate set forth
above shall be decreased by the amount by which interest on the Note
has been reduced as a result of such prepayment and (ii) the Executive
shall also receive an additional $18,500 per annum during the Term,
payable at the time the first monthly installment of Base Salary is
payable hereunder and on each anniversary thereafter (all such
payments set forth in clauses (i) and (ii) above are referred to
herein as the "Additional Salary").
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(d) 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.
(e) 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.
(f) NEW STOCK OPTIONS. The Company shall Grant to Executive 175,000 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.
(g) NEW RESTRICTED STOCK AWARD. The Company also grants 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 $1,400,000 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 October 1, 2005 or a
Change in Control of the Company 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.
(h) VACATION. The Executive shall be entitled to four (4) weeks vacation
each year.
(i) HOUSING AND OTHER EXPENSES. The Executive shall be entitled to
reimbursement of all reasonable and documented expenses actually
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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. In addition, the Company will reimburse the
Executive for expenses associated with reasonable travel to and from
Atlanta, Georgia and Naples, Florida, and will pay or reimburse the
Executive for the reasonable expenses associated with providing the
Executive with the use of a suitable home purchased by the Company in
the Madison, Wisconsin area, other than utilities and maintenance. 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.
(j) AUTOMOBILE. The Company shall provide the Executive with the use of a
leased automobile suitable for a chief executive officer of a company
similar to the Company.
(k) 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.
(l) LEGAL FEES. The Company shall pay the Executive's actual and
reasonable legal fees incurred in connection with the preparation of
this Agreement.
(m) RETENTION BONUSES; HOUSE SALE.
(i) As set forth in the 2000 Agreement, on the earlier of September
30, 2003 or a Change in Control, the Company shall pay the
Executive an additional amount of Four Hundred Thousand Dollars
($400,000). In addition, if the Company does not terminate the
Executive's employment hereunder pursuant to Section 4(a) and
the Executive does not terminate his employment hereunder
pursuant to Section 4(d) (other than following a Change in
Control), then on October 1, 2005, Company shall pay the
Executive Two Million Two Hundred Thousand Dollars
($2,200,000).
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(ii) If the Company does not terminate the Executive's employment
hereunder pursuant to Section 4(a) and the Executive does not
terminate his employment hereunder pursuant to Section 4(d)
(other than following a Change in Control, then at any time
after the earlier of April 30, 2003 or the date on which the
Executive's employment is terminated, at the option of and upon
the request of the Executive or his estate, the Company shall
sell to the Executive or his estate fee simple title to the
home purchased by the Company for the use of the Executive,
free and clear of all liens and encumbrances arising after the
date of the Company's acquisition of the home and not created
by the Executive, other than liens or encumbrances that do not
materially affect the use or value thereof; the purchase price
shall be One Dollar ($1.00).
(n) OPTION TO RELINQUISH CHIEF EXECUTIVE OFFICER POSITION. Notwithstanding
anything else in this Agreement to the contrary, Executive may at his
discretion relinquish his role as Chief Executive Officer effective
October 1, 2004 and remain as an employee of the Company and, as may
be permitted under law and the Company's bylaws, as Chairman of the
Board of Directors of the Company until September 30, 2005. Should
Executive exercise such option, his annual Base Salary during this
third year of his Agreement shall be Five Hundred Thousand Dollars
($500,000) and his Bonus shall be based on 75% of this Base Salary,
and all other terms and conditions of this Agreement shall continue to
apply.
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;
(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;
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(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 Board, provided such failure or
refusal continues after thirty (30) days of the receipt of
notice in writing from 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 without prior 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). 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, or upon thirty (30)
days prior written notice after a Change in Control. Any such
termination shall be treated as a termination by the Company for
"Cause" under Section 5, unless notice of such termination was given
within thirty (30) days after a Change in Control, in which case such
termination shall be treated in accordance with Section 5(d) hereof.
(e) CONSTRUCTIVE TERMINATION BY THE EXECUTIVE. The Executive shall be
entitled to terminate his employment and appointment hereunder,
without prior notice, upon the occurrence of a Constructive
Termination. Any such termination shall be treated as a termination by
the Company without Cause. For this purpose, a "Constructive
Termination" shall mean:
(i) a reduction in Base Salary or Additional Salary (other than as
permitted hereby);
(ii) a reduction in annual Bonus opportunity;
(iii) a change in location of office of more than seventy-five (75)
miles from Madison, Wisconsin;
(iv) unless with the express written consent of the Executive, (a)
the assignment to the Executive of any duties inconsistent in
any substantial respect with the Executive's position,
authority or responsibilities as contemplated by Section 1 of
this Agreement or (b) any other substantial change in such
position, including titles, authority or responsibilities from
those contemplated by Section 1 of the Agreement; or
(v) any material reduction in any of the benefits described in
Section 3(h), (i), (j) or (k) hereof.
For purposes of the Stock Option Agreements, Constructive Termination
shall be treated as a termination of employment by the Company without
"Cause."
(f) NOTICE OF TERMINATION. Any termination by the Company for Cause or by
the Executive for Constructive Termination 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
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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 any party to set forth in
the Notice of Termination any fact or circumstance which contributes
to a showing of Cause or Constructive Termination shall not waive any
right of such party hereunder or preclude such party 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) DEATH OR DISABILITY. If the Executive's employment is terminated by
the death or disability of the Executive (pursuant to Section 4(b)),
the Executive's compensation provided in Section 3 shall be paid to
the Executive or, in the event of the death of the Executive, the
Executive's estate, as follows:
(i) the Executive's Base Salary specified in Section 3(a) shall
continue to be paid in monthly installments until the first to
occur of (i) twenty-four (24) months following such termination
or (ii) such time as the Executive or the Executive's estate
breaches the provisions of Sections 6 or 7 of this Agreement;
(ii) double the PRO RATA portion (based on days worked and
percentage of achievement of annual performance goals) of the
annual Bonus payable to the Executive, if any, specified in
Section 3(b) shall be paid, unless the Board determines to pay
a greater amount in its sole discretion;
(iii) the Executive's Additional Salary (or, for any partial year,
the pro rata portion thereof) specified in Section 3(c) shall
continue to be paid until the first to occur of (i) the
remaining period of the Term or (ii) such time as the Executive
or the Executive's estate breaches the provisions of Sections 6
or 7 of this Agreement;
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(iv) If the Executive's employment is terminated as a result of
disability, the Executive's additional benefits specified in
Section 3(d) shall continue to be available to the Executive
until the first to occur of (i) the remaining period of the
Term (or twenty-four (24) months following such termination, if
greater) or (ii) such time as the Executive breaches the
provisions of Sections 6 or 7 of this Agreement; and
(v) the Executive's accrued vacation (determined in accordance with
Company policy) at the time of termination shall be paid as
soon as reasonably practicable.
(c) WITHOUT CAUSE. If the Executive's employment is terminated by the
Company without Cause (pursuant to Section 4(c) or 4(e)), the
Executive's compensation provided in Section 3 shall be paid as
follows:
(i) the Executive's Base Salary specified in Section 3(a) shall
continue to be paid in monthly installments until the first to
occur of (i) the remaining period of the Term (or twenty-four
(24) months following such termination, if greater) or (ii)
such time as the Executive breaches the provisions of Sections
6 or 7 of this Agreement;
(ii) the Executive's annual Bonus shall continue to be paid in
accordance with this Section 5(c) at the times set forth in
Section 3(b) until the first to occur of (i) the remaining
period of the Term (or twenty-four (24) months following such
termination, if greater) or (ii) such time as the Executive
breaches the provisions of Sections 6 or 7 of this Agreement.
The annual Bonus payable pursuant to this Section 5(c) shall
equal the amount of the annual Bonus (if any) previously paid
or required to be paid pursuant to this Agreement for the full
fiscal year immediately prior to the Executive's termination of
employment;
(iii) the Executive's Additional Salary (or, for any partial year,
the pro rata portion thereof) specified in Section 3(c) shall
continue to be paid until the first to occur of (i) the
remaining period of the Term (or twenty-four (24) months
following such termination, if longer) or (ii) such time as the
Executive breaches the provisions of Sections 6 or 7 of this
Agreement; and
(iv) the Executive's additional benefits specified in Section 3(d)
shall continue to be available to the Executive until the first
to
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occur of (i) twenty-four (24) months following such termination
or (ii) such time as the Executive breaches the provisions of
Sections 6 or 7 of this Agreement.
(d) FOLLOWING CHANGE IN CONTROL. If the Executive elects to terminate his
employment within thirty (30) days following a Change in Control in
accordance with Section 4(d), such termination by the Executive shall
be treated as a termination by the Company without Cause, and the
Executive shall be entitled to the compensation provided in Section
5(c); provided, however, that Executive's Base Salary, annual Bonus,
Additional Salary and Section 3(d) additional benefits shall continue
to be paid only until the first to occur of (i) the remaining period
of the Term (or twelve (12) months following the expiration of the
Post-Term Period (as defined below)) or (ii) such time as the
Executive breaches the provisions of Sections 6 or 7 of this
Agreement. In no event, however, shall Executive receive less than
twelve (12) months Base Salary and annual Bonus following the
expiration of the Post-Term Period. Notwithstanding the foregoing, the
Company may require that the Executive continue to remain in the
employ of the Company for up to a maximum of thirty (30) days
following the Change in Control (the "Post-Term Period"). The Company
shall place the maximum cash payments payable pursuant to Section 5(c)
in escrow with a commercial bank or trust company mutually acceptable
to the Company and the Executive as soon as practicable following the
Change in Control. For the Post-Term Period, the Company shall make
the cash payments that would otherwise be required pursuant to Section
3 (all such cash payments to be deducted from the amount placed in
escrow). At the expiration of the Post-Term Period, the Executive
shall receive all cash amounts due the Executive from the remaining
amount held in escrow ratably monthly over the Non-Competition Period
(as defined below), with the balance (if any) returned to the Company.
If the Company does not require that the Executive remain in the
employ of the Company, the Company shall pay the Executive all cash
amounts payable pursuant to Section 5(c) ratably monthly over the
Non-Competition Period (all such cash payments to be deducted from the
amount placed in escrow) with the balance (if any) returned to the
Company.
The Executive shall not be required to mitigate the amount of any payment
provided for herein by seeking other employment or otherwise, and if the
Executive does obtain other employment, all amounts payable by the Company
under this Agreement shall remain fully due and payable.
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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.
(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.
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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.
(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
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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: Board of Directors
with a copy to:
Rayovac Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx
(b) For notices and communications to the Executive:
Xxxxx X. Xxxxx
7881 Via Vecchia
Xxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Any party hereto may, by notice to the other, change its address for
receipt of notices hereunder.
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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 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
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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. In the event
that the Executive shall give a Notice of Termination for Constructive
Termination and it shall thereafter be determined that Constructive
Termination did not take place, the employment of the Executive shall,
unless the Corporation and the Executive shall otherwise mutually
agree, be deemed to have terminated, at the date of giving such
purported Notice of Termination, and the Executive shall be entitled
to receive only those payments and benefits which he would have been
entitled to receive at such date had he terminated his employment
voluntarily at such date under Section 4(d) 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) ENTIRE AGREEMENT. This Agreement and the exhibit 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
RAYOVAC CORPORATION
By /s/ Xxxx X. Xxxxxx
---------------------
Xxxx X. Xxxxxx
President and Chief Operating Officer
EXECUTIVE:
/s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
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EXHIBIT A
RAYOVAC CORPORATION
FULL RECOURSE PROMISSORY NOTE
$500,000 Madison, Wisconsin
September 12, 1996
FOR VALUE RECEIVED, the undersigned, Xxxxx X. Xxxxx (the "Borrower"),
residing at 0000 Xxxxx Xxx, Xxxxxxx, XX 00000 HEREBY PROMISES TO PAY to the
order of Rayovac Corporation, a Wisconsin corporation (the "Company"), having a
principal address at 000 Xxxxxxx Xxxxx, Xxxxxxx, XX 00000, or to the legal
holder of this Note at the time of payment, the principal sum of $500,000, in
accordance herewith, plus simple interest thereon at a rate of 7% per annum. The
principal amount of this Note shall be due and payable on the Maturity Date (as
defined below) and the interest on this Note shall be paid in five (5) annual
installments of $35,000 on each successive Payment Date (as defined below).
This Note is being delivered to the Company in consideration for a
loan of even date herewith to enable the Borrower to acquire 227,894 shares (the
"Shares") of common stock, $.01 par value per share, of the Company in
connection with the recapitalization of the Company pursuant to the Stock
Purchase and Redemption Agreement dated this date.
The Borrower and the Company are parties to an Employment Agreement,
dated this date (the "Employment Agreement"), which sets forth the terms of
Borrower's employment with the Company as Chairman of the Board of Directors,
President and Chief Executive Officer of the Company.
This Note is subject to the following further terms and conditions:
1. PAYMENT DATES AND MATURITY DATE. Payments of interest on this
Note as set forth above shall be paid at such time as Additional Salary (as
defined in the Employment Agreement) set forth in Section 3 (c) (i) of the
Employment Agreement is due and payable by the Company to the Borrower pursuant
to the terms of the Employment Agreement (each such date referred to herein as a
"Payment Date"). Payment of principal on this Note as set forth above shall be
paid on the fifth Payment Date (the "Maturity Date").
2. METHOD OF PAYMENT. All payments of principal, interest and other
amounts owing hereunder shall be made, without setoff, deduction or
counterclaim, in funds which are available on the Payment Date (including the
Maturity Date) to the Company at the Company's principal address set forth
herein, or to such other person and at such other place specified in writing by
the Company to the Borrower, by 12:00 noon (local time) on the date when due.
The Borrower may, at his option, prepay this Note in whole or in part at any
time or from time to time without penalty or premium. Any prepayment of any
portion of
the principal portion of this Note shall be accompanied by payment of all
interest accrued but unpaid hereunder. Upon full and final payment of the
principal amount of and interest accrued on this Note, it shall be surrendered
to the Borrower and cancelled by the Company.
3. LOAN PROCEEDS. The Borrower hereby irrevocably directs the
Company to disburse the proceeds of this Note directly to the Company for the
account of the Borrower in payment (whether in whole or in part) of the Shares
and agrees that any funds so disbursed (regardless of how applied by the
Company) shall be considered received by the Borrower upon the receipt of such
funds by the Company.
4. EVENTS OF ACCELERATION.
(a) Upon the occurrence of any of the following events ("Events
of Acceleration"):
(i) the failure to pay the principal of and interest under this
Note when due if such failure is not remedied within ten (10) days after
written notice thereof to the Borrower from the holder of this Note;
(ii) the Borrower is terminated by the Company for Cause (as
defined in the Employment Agreement) pursuant to Section 4 (a) of the
Employment Agreement;
(iii) the Borrower terminates his employment with the Company
(other than pursuant to Section 4 (e) of the Employment Agreement) and the
Borrower is no longer a director of the Company; or
(iv) the Borrower sells or otherwise disposes for value any of
the Shares, unless the Borrower uses the proceeds from such sale or other
disposition (net of brokers' commissions) to immediately prepay in whole or
in part the principal amount of this Note outstanding and any accrued and
unpaid interest on the portion prepaid;
the holder of this Note may declare, by notice of acceleration given to the
Borrower, the entire principal amount of this Note to be forthwith due and
payable, whereupon the entire principal amount of this Note outstanding and any
accrued and unpaid interest hereunder shall become due and payable without
presentment, demand, protest, notice of dishonor and all other demands and
notices of any kind, all of which are hereby expressly waived. Upon the
occurrence of an Event of Acceleration, the accrued and unpaid interest
hereunder shall thereafter bear the same rate of interest as on the principal
hereunder, but in no event shall such interest be charged which would violate
any applicable usury law. If an Event of Acceleration shall occur hereunder, the
Borrower shall pay costs of collection, including reasonable attorneys' fees,
incurred by the holder in the enforcement hereof.
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(b) No delay or failure by the holder of this Note in the
exercise of any right or remedy shall constitute a waiver thereof, and no single
or partial exercise by the holder hereof of any right or remedy shall preclude
other or future exercises thereof or the exercise of any other right or remedy.
5. AMENDMENTS. This Note may be amended if in writing and signed by
the Borrower and the Company.
6. HEADINGS. The headings contained in this Note are for reference
purposes only and shall not affect in any way the meaning or interpretation of
the provisions hereof.
7. BENEFITS OF THIS AGREEMENT. This Note shall be binding upon the
Borrower and the Borrower's personal representatives, heirs and assigns and
shall not be construed so as to confer any right or benefit upon any person
other than the Borrower and his or her personal representatives, heirs and
assigns.
8. NOTICES. All notices and other communications hereunder shall be
in writing, and shall be deemed to have been duly given if delivered or, upon
receipt, if mailed, in either case, to the respective addresses of the Company
and the Borrower specified herein, or to such other address as a party shall
have specified by notice to the other in the same manner.
9. SEVERABILITY. If any provision of this Note is construed to be
invalid, illegal or unenforceable, then the remaining provisions shall not in
any way be affected thereby and shall be enforced without regard thereof.
10. GOVERNING LAW. The provisions of this Note shall be governed by
and construed in accordance with the laws of the State of Wisconsin, without
regard to the conflict of law rules thereof.
11. WAIVER OF JURY TRIAL. The Borrower and, by acceptance hereof, the
Company hereby waive trial by jury in any judicial proceeding involving,
directly or indirectly, any matter (whether sounding in tort, contract or
otherwise) in any way arising out of, related to, or connected with this Note.
IN WITNESS WHEREOF, the undersigned Borrower has executed this Note under
seal as of the day and year first above written.
/s/ Xxxxx X. Xxxxx
----------------------
(Signature of Borrower)
Witness:
/s/ X. X. Xxxxx, Xx.
--------------------
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