Exhibit 10.5
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of the 7
day of October, 2003, by and between Rayovac Corporation, a Wisconsin
corporation (the "Company"), and Xxxxxx Xxx (the "Executive").
WHEREAS, the Executive has been employed by Remington Products Company,
L.L.C. ("Remington") as its President, North America pursuant to a letter
agreement between the Executive and Remington dated June 6, 1997 (the "Prior
Employment Agreement");
WHEREAS, pursuant to the Purchase Agreement dated as of August 21, 2003 by
and among the Company, Remington, Vestar Equity Partners, L.P., Investors/RP,
L.L.C., and RPI Corp., the Company has agreed to acquire all of the outstanding
membership interests of Remington (the "Transaction"), after which the Company
will integrate Remington into the Company's operations; and
WHEREAS, the Company desires to employ the Executive upon the terms and
conditions set forth herein and 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
President, Remington North America. The Executive shall remain based in
Bridgeport, Connecticut, shall be a member of the Company's executive
committee and shall report to the Chairman and Chief Executive Officer.
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 of Directors of the Company
(the "Board"). Notwithstanding the foregoing, consent is not required for
activities established prior to the date hereof.
2. TERM OF EMPLOYMENT. Subject to Section 4 hereof, the Executive's employment
and appointment hereunder shall be for a term commencing on October 1, 2003
and expiring on September 30, 2004 (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:
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(a) BASE SALARY. The Executive shall receive a base salary equal to an
amount no less than Three Hundred Fifty-Five Thousand dollars
($355,000) per annum effective October 1, 2003 for the duration of the
Term ("Base Salary"), which Base Salary shall be paid in equal
semi-monthly installments. 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.
(b) BONUS. The Executive shall be entitled to receive the bonus that would
have been due as an employee of Remington for calendar year 2003, if
and when such bonus would have been due under the Remington bonus
plan, including the Super Performance provisions as amended August 28,
2003. The Executive shall also receive a bonus for each fiscal year
ending during the Term, payable annually in arrears, which shall be
based on seventy-five percent (75%) of Base Salary, provided the
Company achieves certain annual performance goals established by the
Board from time to time (the "Bonus"). The Executive shall be entitled
to receive only seventy-five percent (75%) of any Bonus earned during
the Company's fiscal year ending September 30, 2004. The Company
contribution to bonus dollars earned and deferred in the Company's
Deferred Compensation Plan shall be made at the time such bonus is
paid and shall vest at the end of the Term. All amounts previously
deferred by Executive and all Remington matching contributions shall
vest (to the extent not already vested) and be paid promptly following
the end of the Term.
(c) BENEFITS AND PERQUISITES. The Executive shall be entitled to such
insurance, benefits and perquisites to which he was entitled as an
employee of Remington prior to the date hereof.
(d) EQUITY. The Executive will award no less than $207,084 in Company
Stock to the Executive on a date determined by the Board in its
discretion, using the closing price on the date of the grant to
determine the number of shares. Restrictions on the shares shall
expire on September 30, 2004 provided that Executive is employed and
actively working for the Company on such date. Until expiration of the
restrictions, the shares may not be sold, assigned, transferred,
exchanged, pledged, hypothecated, or otherwise encumbered in any
manner by the Executive.
(e) VACATION. The Executive shall be entitled to four (4) weeks vacation
each year.
(f) 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.
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(g) VEHICLE. The Executive shall be provided with the use of a leased
vehicle or an allowance to lease a vehicle. The value of this benefit
shall be comparable to peer members of the Executive Committee.
4. TERMINATION AND SEVERANCE. The Company shall have the right to terminate
the Executive's employment at any time and the Executive shall have the
right to terminate his employment at any time. Any such termination shall
have the effects described in this Section 4.
(a) If the Executive's employment with the Company is terminated prior to
September 30, 2004 by the Company without cause or by Executive for
"good reason", as defined in the Change of Control Agreement dated as
of September 20, 2000 between the Executive and Remington, then the
Executive shall be entitled to the compensation and benefits specified
in such agreement, a copy of which is attached hereto as Exhibit A
(the "Change of Control Agreement").
(b) If the Executive's employment with the Company is terminated prior to
September 30, 2004 (i) by the Company without cause, as defined in the
Change of Control Agreement, (ii) in the event Company requires
Executive to relocate more than 40 miles from Bridgeport, Connecticut
prior to September 30, 2004 or (iii) the Company materially reduces
Executive's compensation prior to September 30, 2004 then the
restrictions on Executive's Company stock shall expire on September
30, 2004.
(c) If the Executive's employment with the Company is not terminated by
either the Company or the Executive prior to September 30, 2004, then,
notwithstanding anything in the Change of Control Agreement to the
contrary, on October 1, 2004 the Executive shall be entitled to the
compensation and benefits specified in the Change of Control Agreement
to which the Executive would have been entitled if his employment had
been terminated within 12 months following a Change of Control (as
defined in the Change of Control Agreement) by Remington without
"Cause" or by Executive for "Good Reason" (each as defined in the
Change of Control Agreement).
(d) For purposes of implementing Subsections (a) and (c) above, the
Company and the Executive agree that Exhibit B hereto sets forth the
dollar amount of certain items of compensation and benefits specified
in the Change of Control Agreement.
(e) In the event that during the Term, the Executive dies or becomes
permanently disabled (as such term is defined in the Remington Long
Term Disability policy, last provided by Remington as Executive's
principal long-term disability coverage), then the Executive or his
heirs and assigns shall be entitled to all of the payments and
benefits provided for in this Agreement, including the payments and
benefits described in this Section 4 and restrictions on Executive's
Company stock shall expire on September 30, 2004.
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5. 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 that is involved
in the manufacturing, sourcing, distributing, repairing, servicing or
retail sale of men's or women's consumer electric shavers and hair
trimming and clipping products in North America (a "Competing
Business") (excepting only (a) the ownership of not more than 5% of
the outstanding securities of any class listed on an exchange or the
Nasdaq Stock Market and (b) acting as an officer, director,
consultant, agent, employee, principal or partner of a division,
subsidiary (direct or indirect) or parent (direct or indirect) of a
Competing Business, which division, subsidiary (direct or indirect) or
parent (direct or indirect) is not involved in the manufacturing,
sourcing, distributing, repairing, servicing or retail sale of men's
or women's consumer electric shavers or hair trimming or clipping
products in North America. The "Non-Competition Period" is (i) the
longer of the Executive's employment with the Company or the time
period which he serves as a director of the Company or any subsidiary
of the Company PLUS (ii) 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 as defined in section 5 (a).
(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 Term, nor hire any active
employee of Company for any other business; provided, however that the
provisions of this Section 5 (c) shall not apply with respect to any
employee whose employment with the Company or Remington was terminated
at any time following the close of the transaction.
(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 modify the foregoing restrictions to include the
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maximum restrictions allowed under the applicable law. The covenants
and agreements set forth in this Section 5 shall be deemed, and shall
be construed as, separate and independent covenants and agreements,
and should any part or provision of such covenants or agreements be
held invalid, void or unenforceable by any court of competent
jurisdiction, such invalidity, voidness or unenforceability shall in
no way render invalid, void or unenforceable any other part or
provision thereof or any separate covenant not declared invalid, void
or unenforceable; and this Section 5 shall in that case be construed
as if the void, invalid or unenforceable provisions were omitted
(e) For purposes of this Section 5 and Section 6, the "Company" refers to
the Company and any incorporated or unincorporated subsidiaries and
affiliates of the Company, including Remington.
6. SECRET PROCESSES AND CONFIDENTIAL INFORMATION.
(a) The Executive recognizes and acknowledges that he has had and will
have access to certain highly sensitive, special, unique information
of the Company that is confidential or proprietary. The Executive
hereby covenants and agrees that he will not (except in the
performance of his services under this Agreement): (a) use or disclose
any Trade Secrets during the Term and for a period of five years
thereafter for so long as they remain Trade Secrets and (b) use or
disclose any Confidential Information during the term of his
employment with the Company and for a period of three (3) years
thereafter; PROVIDED, HOWEVER, that the foregoing restrictions shall
not apply to (1) items that have entered the public domain other than
by an unauthorized disclosure by the Executive, (2) any items required
to be disclosed by a governmental authority or under applicable law,
or (3) Confidential Information received subsequently from third
parties not known by the Executive to be subject to confidentiality
restrictions.
(b) For purposes of this Agreement, (A) "Trade Secret" means any currently
existing information of the Company, including, without limitation,
technical or non-technical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a set of guidelines, a
procedure, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers
of the Company, that derives economic value, actual or potential, from
not being generally known to and not being readily ascertainable by
proper means by other persons who can obtain economic value from its
disclosure or use and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy or otherwise
constitutes a trade secret under applicable law; and (B) "Confidential
Information" is any currently existing data or information of the
Company other than Trade Secrets, which is competitively sensitive and
not generally known to the public.
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(c) 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, in each case pertaining to products produced and sold by the
Company 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.
(d) The Executive acknowledges that all Trade Secrets and Confidential
Information are and shall be the sole, exclusive and valuable property
of the Company, and that he does not have and shall not acquire any
right, title or interest therein. Any and all printed, typed, written
or other material that the Executive may have in his possession or
obtain with respect to Trade Secrets or Confidential Information
(including without limitation all copyrights therein) shall be and
remain the exclusive property of the Company, and any and all material
(including any copies) shall, upon request of the Company, be promptly
delivered by the Executive to the Company.
7. 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:
For notices and communications to the Company:
Rayovac Corporation
000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx
For notices and communications to the Executive:
Xxxxxx Xxx
000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
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Any party hereto may, by notice to the other, change its address for
receipt of notices hereunder.
8. GENERAL.
(a) GOVERNING LAW. This Agreement shall be construed under and governed by
the laws of the State of Connecticut, without reference to its
conflicts of law principles. The parties agree that they shall submit
to the exclusive jurisdiction of the state and federal courts located
in the State of Connecticut with respect to any dispute arising under
this Agreement.
(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) 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.
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(f) 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.
(g) EQUITABLE RELIEF. The Executive expressly agrees that breach of any
provision of Sections 5 or 6 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.
(h) 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.
(i) PRIOR AGREEMENTS. Nothing in this Agreement shall be deemed to
supercede, cancel or modify an existing agreement between the
Executive and Remington including, but not limited to, the Change of
Control Agreement (as modified by Section 4 hereof) and Super
Performance Agreement as amended August 28, 2003. All of which shall
continue in full force and effect.
(j) ATTORNEY'S FEES. The Company shall reimburse the Executive for any and
all legal fees and expenses incurred by the Executive, as such fees
and expenses are incurred, in connection with any litigation or
dispute between the parties under this Agreement including, but not
limited to, legal fees and expenses incurred by the Executive in
connection with any litigation brought in good faith by the Executive
under this Agreement. The Company shall also reimburse the Executive
as such fees and expenses are incurred by him in connection with the
review and negotiation of this Agreement.
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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
Chairman and
Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxx Xxx
----------------
Name: Xxxxxx Xxx
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EXHIBIT A
CHANGE OF CONTROL AGREEMENT
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EXHIBIT B
SEVERANCE COMPENSATION AND BENEFITS
ALL FIGURES ARE GROSS; EXECUTIVE IS RESPONSIBLE FOR TAXES AND REQUIRED
WITHHOLDING.
Value of 2 Years base salary (using annual salary of $355,000) plus one year
target bonus (75% of base = $266,250). TOTAL: $976,250
Prorated bonus if termination date occurs prior to end of fiscal year ($TBD)
Value of 2 years 401(K) contributions. TOTAL: $21,000
Value of 2 years MERP. TOTAL: $8,540
Value of 2 years Financial & Tax planning allowance. TOTAL: $6,000
Full value of Deferred Compensation Account. ($TBD)
Value of 2 years Car Allowance. ($TBD)
Value of Cash in lieu of Outplacement Services. TOTAL: $35,000
Value of 2 years Club Membership. TOTAL: $10,000
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