EXHIBIT 10.5
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EMPLOYMENT SECURITY AGREEMENT
This Employment Security Agreement ("Agreement") is entered into
as of this ____ day of ________, ___, by and between Xxxxxx Rubbermaid
Inc., a Delaware corporation ("Employer") and ________________________
("Executive").
WITNESSETH:
WHEREAS, Executive is currently employed by Employer and by
Xxxxxx Operating Company, a subsidiary of Employer, as the
____________________of each of Employer and Xxxxxx Operating Company;
WHEREAS, Employer desires to provide certain security to
Executive in connection with Executive's employment with Employer; and
WHEREAS, Executive and Employer desire to enter into this
Employment Security Agreement ("Agreement") pertaining to the terms of
the security Employer is providing to Executive with respect to his
employment;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties agree as
follows:
1. TERM. The term of this Agreement shall be the period
beginning on the date hereof and terminating on the first to occur of
(a) the date 24 months after the date of Executive's termination of
employment under circumstances described in paragraph 2 and (b) the
date Executive attains or would have attained age 65 (the "Term").
2. BENEFITS UPON TERMINATION OF EMPLOYMENT. If, at any time
during the twelve month period following a Change in Control and prior
to Executive's attainment of age 65, (1) the employment of Executive
with Employer is terminated by Employer for any reason other than Good
Cause, or (2) Executive terminates his employment with Employer for
Good Reason, the following provisions will apply:
(a) Employer shall, as hereinafter described in this
subsection (a), pay Executive:
(1) Executive's Base Salary during the Severance Period;
and
(2) Executive's Bonus for each year during the Severance
Period. Such Base Salary will be paid during the Severance
Period in monthly or other installments of the same frequency as
the payments of his salary being received by Executive at the
date of the Change in Control, and will commence as soon as
practicable, but in no event later than the date 30 days after
termination of employment. Such Bonus for any calendar year will
be paid on March 1 of the next following calendar year.
(b) Executive shall receive any and all benefits accrued
under any other Incentive Plans and Retirement Plans to the date
of termination of employment, the amount, form and time of
payment of such benefits to be determined by the terms of such
Incentive Plans and Retirement Plans, and Executive's employment
shall be deemed to have terminated by reason of retirement under
circumstances that have the most favorable result for Executive
thereunder for all purposes of such Plans. Payment shall be made
at the earliest date permitted under any such Plan that is not
funded with a trust agreement.
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(c) For purposes of all Incentive Plans and Retirement
Plans Executive shall be given service credit for all purposes
for, and shall be deemed to be an employee of Employer during,
the Severance Period, notwithstanding the fact that he is not an
employee of Employer or any Affiliate or Associate thereof during
the Severance Period; provided that, if the terms of any of such
Incentive Plans or Retirement Plans do not permit such credit or
deemed employee treatment, Employer will make payments and
distributions to Executive outside of the Plans in amounts
substantially equivalent to the payments and distributions
Executive would have received pursuant to the terms of the Plans
and attributable to such credit or deemed employee treatment, had
such credit or deemed employee treatment been permitted pursuant
to the terms of the Plans. Executive shall not receive any amount
under an Incentive Plan pursuant to this subsection (c) to the
extent that such amount is included within the Executive's Bonus
payable pursuant to clause (a)(2) above.
(d) If upon the date of termination of Executive's
employment, Executive holds any options with respect to stock of
Employer, all such options will immediately become exercisable
upon such date and will be exercisable for 90 days thereafter. To
the extent such acceleration of exercise of such options is not
permissible under the terms of any plan pursuant to which the
options were granted, Employer will pay to Executive, in a lump
sum, within 90 days after termination of employment, an amount
equal to the excess, if any, of the aggregate fair market value
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of all stock of Employer subject to such options, determined on
the date of termination of employment, over the aggregate option
price of such stock, and Executive will surrender all such
options unexercised.
(e) During the Severance Period, Executive and his spouse
will continue to be covered by all Welfare Plans, maintained by
Employer in which he or his spouse were participating immediately
prior to the date of his termination, as if he continued to be an
employee of Employer; provided that, if participation in any one
or more of such Welfare Plans is not possible under the terms
thereof, Employer will provide substantially identical benefits.
Such coverage will cease if and when Executive obtains employment
with another employer during the Severance Period, and becomes
eligible for coverage under any substantially similar plans
provided by his new employer.
(f) During the Severance Period Employer shall reimburse
Executive for the expenses of an automobile in accordance with
the arrangement, if any, in effect at the time of termination of
Executive's employment. Such reimbursement will cease if and when
Executive obtains employment with another employer during the
Severance Period and receives such reimbursement from his new
employer.
(g) Executive shall not be entitled to receive any payments
or other compensation during the Severance Period attributable to
vacation periods he would have earned had his employment
continued during the Severance Period or to unused vacation
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periods accrued as of the date of termination of employment, and
Executive waives any right to receive such compensation.
(h) During the Severance Period Executive shall not be
entitled to reimbursement for fringe benefits such as dues and
expenses related to club memberships, automobile telephones,
expenses for professional services and other similar perquisites.
3. SETOFF. No payments or benefits payable to or with respect
to Executive pursuant to this Agreement shall be reduced by any amount
Executive or his spouse may earn or receive from employment with
another employer or from any other source, except as expressly
provided in subsections 2(e) and 2(f).
4. DEATH. If Executive dies during the Severance Period all
amounts payable hereunder to Executive shall, during the remainder of
the Severance Period, be paid to his surviving spouse, and his spouse
shall continue to be covered under all applicable Welfare Plans during
the remainder of the Severance Period. On the death of the survivor of
Executive and his spouse, no further benefits will be paid, and no
further Welfare Plan coverage will be provided, under the Agreement;
except for benefits accrued under any Incentive Plans and Retirement
Plans to the date of termination of employment, to the extent such
benefits continue following Executive's death pursuant to the term of
such Plans.
5. DEFINITIONS. For purposes of this Agreement:
(a) "Affiliate" or "Associate" shall have the meaning set
forth in Rule 12b-2 under the Securities Exchange Act of 1934.
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(b) "Base Salary" shall mean Executive's annual base salary
at the rate in effect on the date of a Change in Control.
(c) "Bonus" shall mean an amount determined by multiplying
Executive's Base Salary by a percentage that is the average
percentage of base salary that was paid (or payable) to Executive
as a bonus under the Revised ROI Cash Bonus Plan or the ROA Cash
Bonus Plan of Employer, or any successor plan or arrangement, for
the three full fiscal years of Employer preceding the date of a
Change in Control.
(d) "Change in Control" shall be deemed to occur on the
occurrence of any of the following events without the prior
written approval of a majority of the entire Board of Directors
of Employer as it exists immediately prior to such event;
provided that, in the case of an event described in (1) or (3)
below, such approval occurs before the time of such event and, in
the case of an event described in (2) below, such approval occurs
prior to the time that any other party to the event described in
(2) (or any Affiliate or Associate thereof) acquires 20% or more
of the Voting Power:
(1) The acquisition by an entity, person or group
(including all Affiliates or Associates of such entity, person or
group) of beneficial ownership, as that term is defined in
Rule13d-3 under the Securities Exchange Act of 1934, of capital
stock of Employer entitled to exercise more than 50% of the
outstanding voting power of all capital stock of Employer
entitled to vote in elections of directors ("Voting Power");
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(2) The effective time of (I) a merger or consolidation of
Employer with one or more other corporations as a result of which
the holders of the outstanding Voting Power of Employer
immediately prior to such merger or consolidation (other than the
surviving or resulting corporation or any Affiliate or Associate
thereof) hold less than 50% of the Voting Power of the surviving
or resulting corporation, or (II) a transfer of a majority of the
Voting Power, or a Substantial Portion of the Property, of
Employer other than to an entity of which Employer owns at least
50% of the Voting Power; or
(3) The election to the Board of Directors of Employer, of
directors constituting a majority of the number of directors of
Employer then in office.
(e) "Good Cause" shall be deemed to exist if, and only if:
(1) Executive engages in acts or omissions constituting
dishonesty, intentional breach of fiduciary obligation or
intentional wrongdoing or malfeasance; or
(2) Executive is convicted of a criminal violation
involving fraud or dishonesty. Notwithstanding anything herein to
the contrary, in the event Employer shall terminate the
employment of Executive for Good Cause hereunder, Employer shall
give Executive at least thirty (30) days prior written notice
specifying in detail the reason or reasons for Executive's
termination.
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(f) "Good Reason" shall exist if:
(1) there is a significant change in the nature or the
scope of Executive's authority;
(2) there is a reduction in Executive's rate of base
salary;
(3) Employer changes by 100 miles or more the principal
location in which Executive is required to perform services; or
(4) Employer terminates or amends any Incentive Plan or
Retirement Plan so that, when considered in the aggregate with
any substitute Plan or Plans, the Incentive Plans and Retirement
Plans in which he is participating fail to provide him with a
level of benefits provided in the aggregate by such Incentive
Plans or Retirement Plans prior to such termination or amendment.
(g) "Incentive Plans" shall mean any incentive, bonus, deferred
compensation or similar plan or arrangement currently or hereafter
made available by Employer in which Executive is eligible to
participate.
(h) "Retirement Plans" shall mean any qualified or supplemental
defined benefit retirement plan or defined contribution retirement
plan, currently or hereinafter made available by Employer in which
Executive is eligible to participate.
(i) "Severance Period" shall mean the period beginning on
the date the Executive's employment with Employer terminates
under circumstances described in Section 2 and ending on the
first to occur of the date 24 months thereafter and the date
Executive attains or would have attained age 65.
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(j) "Substantial Portion of the Property of Employer" shall mean
75% of the aggregate book value of the assets of Employer and its
Affiliates and Associates as set forth on the most recent balance
sheet of Employer, prepared on a consolidated basis, by its regularly
employed, independent, certified public accountants.
(k) "Welfare Plan" shall mean any health and dental plan,
disability plan, survivor income plan and life insurance plan or
arrangement currently or hereafter made available by Employer in which
Executive is eligible to participate.
6. RESTRICTIVE COVENANTS. Executive shall not, during the
Term of this Agreement be associated, directly or indirectly, as
employee, proprietor, stockholder, partner, agent, representative,
officer, or otherwise, with the operation of any business that is
competitive with any business of Employer or any of its Affiliates,
except that Executive's ownership (or that of his wife and children)
of publicly-traded securities of any such business having a cost of
not more than $50,000, shall not be considered a violation of this
Section. For purposes of the preceding sentence, Executive shall be
considered as the "stockholder" of any equity securities owned by his
spouse and all relatives and children residing in Executive's
principal residence.
7. NO SOLICITATION OF REPRESENTATIVES AND EMPLOYEES. Executive
agrees that he shall not, during the Term of this Agreement, directly
or indirectly, in his individual capacity or otherwise, induce, cause,
persuade, or attempt to do any of the foregoing in order to cause, any
representative, agent or employee of Employer or any of its Affiliates
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to terminate such person's employment relationship with Employer or
any of its Affiliates, or to violate the terms of any agreement
between said representative, agent or employee and Employer or any of
its Affiliates.
8. CONFIDENTIALITY. Executive acknowledges that preservation of
a continuing business relationship between Employer or its Affiliates
and their respective customers, representatives, and employees is of
critical importance to the continued business success of Employer and
that it is the active policy of Employer and its Affiliates to guard
as confidential the identity of its customers, trade secrets, pricing
policies, business affairs, representatives and employees. In view of
the foregoing, Executive agrees that he shall not during the Term of
this Agreement and thereafter, without the prior written consent of
Employer (which consent shall not be withheld unreasonably), disclose
to any person or entity any information concerning the business of, or
any customer, representative, agent or employee of, Employer or its
Affiliates which was obtained by Executive in the course of his
employment by Employer. This section shall not be applicable if and to
the extent Executive is required to testify in a legislative, judicial
or regulatory proceeding pursuant to an order of Congress, any state
or local legislature, a judge, or an administrative law judge.
9. EXECUTIVE ASSIGNMENT. No interest of Executive or his spouse
or any other beneficiary under this Agreement, or any right to receive
any payment or distribution hereunder, shall be subject in any manner
to sale, transfer, assignment, pledge, attachment, garnishment, or
other alienation or encumbrance of any kind, nor may such interest or
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right to receive a payment or distribution be taken, voluntarily or
involuntarily, for the satisfaction of the obligations or debts of, or
other claims against, Executive or his spouse or other beneficiary,
including claims for alimony, support, separate maintenance, and
claims in bankruptcy proceedings.
10. BENEFITS UNFUNDED. All rights of Executive and his spouse or
other beneficiary under this Agreement shall at all times be entirely
unfunded and no provision shall at any time be made with respect to
segregating any assets of Employer for payment of any amounts due
hereunder. Neither Executive nor his spouse or other beneficiary shall
have any interest in or rights against any specific assets of
Employer, and Executive and his spouse or other beneficiary shall have
only the rights of a general unsecured creditor of Employer.
11. WAIVER. No waiver by any party at any time of any breach by
any other party of, or compliance with, any condition or provision of
this Agreement to be performed by any other party shall be deemed a
waiver of any other provisions or conditions at the same time or at
any prior or subsequent time.
12. LITIGATION EXPENSES. Employer shall pay 50% of Executive's
attorney's fees in connection with any judicial proceeding to enforce
this Agreement or to construe or determine the validity of this
Agreement or otherwise in connection herewith, whether or not
Executive is successful in such litigation.
13. APPLICABLE LAW. This Agreement shall be construed and
interpreted pursuant to the laws of Illinois.
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14. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between Employer and Executive and supersedes any and all
previous agreements, written or oral, between the parties relating to
the subject matter hereof. No amendment or modification of the terms
of this Agreement shall be binding upon the parties hereto unless
reduced to writing and signed by Employer and Executive.
15. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement
shall be construed to be an employment contract between Executive and
Employer. Executive is employed at will and Employer may terminate his
employment at any time, with or without cause.
16. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original.
17. SEVERABILITY. In the event any provision of this Agreement
is held illegal or invalid, the remaining provisions of this Agreement
shall not be affected thereby.
18. SUCCESSORS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs,
representatives and successors.
19. EMPLOYMENT WITH AN AFFILIATE. If Executive is employed by
Employer and an Affiliate, or solely by an Affiliate, on the date of
termination of employment of Executive under circumstances described
in Section 2, then (i) employment or termination of employment as used
in this Agreement shall mean employment or termination of employment
of Executive with Employer and such Affiliate, or with such Affiliate,
as applicable, and (ii) the obligations of Employer hereunder shall be
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satisfied by Employer and/or such Affiliate as Employer, in its
discretion, shall determine; provided that Employer shall remain
liable for such obligations to the extent not satisfied by such
Affiliate.
20. NOTICE. Notices required under this Agreement shall be in
writing and sent by registered mail, return receipt requested, to the
following addresses or to such other address as the party being
notified may have previously furnished to the others by written
notice.
If to Employer: Xxxxxx Rubbermaid Inc.
00 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: ______________________
If to Executive: _______________________
_______________________
_______________________
_______________________
21. BOARD APPROVAL. The rights and obligations of Employer under
this Agreement are contingent upon the approval or ratification by its
Board of Directors of the execution of this Agreement on its behalf.
IN WITNESS WHEREOF, Executive has hereunto set his hand, and
Employer has caused these presents to be executed in its name on its
behalf, all as of the day and year first above written.
XXXXXX RUBBERMAID INC.
By: ____________________________________
Title: __________________________________
_________________________________________
EXECUTIVE
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