Exhibit 10.4
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (this "Agreement") is
entered into as of the 1st day of October, 2000, by and between Rayovac
Corporation, a Wisconsin corporation (the "Company"), and Xxxx X.
Xxxxxx (the "Executive").
WHEREAS, the Company and the Executive wish to amend and
restate the provisions of the Executive's Employment Agreement with the Company,
dated April 27, 1998, as amended October 1, 1998 and January 13, 2000, because
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, as the President
and Chief Operating Officer of the Company, reporting directly to the Chief
Executive Officer of the Company (the "CEO"). In connection therewith, as
President and Chief Operating Officer, the Executive shall have general
supervision of the day-to-day affairs of the Company and the supervision
and direction of the actions of the other officers of the Company, subject
to the supervision of the CEO. 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, 2003 (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
1
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 Eighty-Five Thousand Dollars ($385,000) per annum
effective October 1, 2000 for the duration of the Term ("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, as set forth on SCHEDULE A hereto, on the Company achieving
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) STOCK OPTIONS. All stock options previously granted to the Executive
shall remain in full force and effect in accordance with their
terms. In connection with the Executive's employment and appointment
hereunder, the Executive was previously granted certain time-based
and performance-based options to purchase, in the aggregate, 72,106
shares of Common Stock at an exercise price of $22.88 per share. If
the Company implements a new stock option program in the future, the
Executive may participate to the extent authorized by the Board.
(e) RESTRICTED STOCK AWARD. In connection with the Executive's
employment and appointment hereunder, the Executive is hereby
granted a Restricted Stock Award pursuant to The 1997 Rayovac
Incentive Plan (the "1997 Plan") and the terms and conditions of the
Rayovac Corporation Restricted Stock Award Agreement attached hereto
as Schedule B.
(f) VACATION. The Executive shall be entitled to four (4) weeks vacation
each year.
(g) 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
2
are reviewable periodically by the Compensation Committee of the
Board, if there be one, or the Board.
(h) AUTOMOBILE. The Company shall provide the Executive with the use of
a leased automobile suitable for a chief operating officer of a
company similar to the Company. Unless the Executive's employment is
terminated by the Company for Cause or by the Executive pursuant to
Section 5(c), the Executive shall be entitled to purchase such
automobile for $100 upon the earlier of (i) the expiration of the
lease for such automobile or (ii) the termination of Executive's
employment.
(i) 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.
(j) 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;
(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
3
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 to purchase 227,894
shares of Common Stock at an exercise price of $4.39 per share
(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
(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, unless notice of such termination was given within sixty
(60) days after a Sale (as such term is defined in the Stock Option
Agreements), in which case such termination shall be treated in
accordance with Section 5(c) 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:
4
(i) a reduction in Base 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(f), (g), (h) or (i) 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
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) WITHOUT CAUSE, DEATH OR DISABILITY. If the Executive's employment is
terminated by the Company without Cause or by reason of death or
5
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
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.
(c) FOLLOWING SALE. If the Executive elects to terminate his employment
within sixty (60) days following a Sale 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(b) except that
instead of the payment provided for in Section 5(b)(i)(ii) hereof,
the Executive shall be entitled to the annual Bonus (if any) earned
pursuant to any annual bonus or incentive plan maintained by the
Company in respect of the fiscal year in which such termination
occurs, and he shall be entitled to the full amount of such Bonus
even if he terminates his employment pursuant to this Section 5(c)
before the end of such fiscal year. 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 six (6) months
following the Sale (the "Post-Term Period"). The Company shall place
the maximum cash payments payable pursuant to Section 5(b) (as
modified by the provisions of this Section 5(c) above with respect
to Section 5(b)(i)(ii) hereof) in escrow with a commercial bank
6
or trust company mutually acceptable to the Company and the
Executive as soon as practicable following the Sale. 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(b) (as modified by the provisions of
this Section 5(c) above with respect to Section 5(b)(i)(ii) hereof)
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 in this Agreement 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.
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
7
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.
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
8
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 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:
Xxxxxx X. Xxx Company
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Xx.
and a copy to:
Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx,
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
(b) For notices and communications to the Executive:
Xxxx X. Xxxxxx
0000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
9
Any party hereto may, by notice to the other, change its address for receipt of
notices hereunder.
9. GENERAL.
9.1 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.
9.2 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.
9.3 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.
9.4 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.
9.5 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.
9.6 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
10
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.
9.7 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.
9.8 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.
9.9 ENTIRE AGREEMENT. This Agreement and the schedules 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
RAYOVAC CORPORATION
By:
---------------------------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
EXECUTIVE:
-----------------------
Xxxx X. Xxxxxx
11
SCHEDULE A
EXECUTIVE BONUS SCHEDULE
=====================================================================================
Bonus Available
Percentage of as Percentage
Plan Achieved of Annual Base Salary
-------------------------------------------------------------------------------------
137.5% 120%
-------------------------------------------------------------------------------------
130 110
-------------------------------------------------------------------------------------
122.5 100
-------------------------------------------------------------------------------------
115 90
-------------------------------------------------------------------------------------
107.5 75
-------------------------------------------------------------------------------------
100 60
-------------------------------------------------------------------------------------
90 30
-------------------------------------------------------------------------------------
80 0
-------------------------------------------------------------------------------------
Any level of Company performance which falls between two specific
points set forth above under "Percentage of Plan Achieved" shall entitle the
Executive to receive a percentage of Base Salary determined on a straight line
basis between such two points. Such amount shall be calculated as follows:
[(A-B) x .1] x (C-D) + D
Where:
A = The actual Percentage of Plan Achieved.
B = The Percentage of Plan Achieved set forth above which is less than and
closest to actual results.
C = The Bonus Available as Percentage of Base Salary set forth above
which is greater than and closest to the percentage that would apply
based on actual results.
D = The Bonus Available as Percentage of Base Salary set forth above
which is less than and closest to the percentage that would apply based
on actual results.
12
SCHEDULE B
RAYOVAC CORPORATION
RESTRICTED STOCK AWARD AGREEMENT
This is a Restricted Stock Award Agreement ("Agreement") dated as of
October 1, 2000 by and between Rayovac Corporation, a Wisconsin corporation (the
"Company"), and Xxxx X. Xxxxxx (the "Executive") pursuant to The 1997 Rayovac
Incentive Plan (the "Plan"), and, in consideration of the mutual promises set
forth below and other good and valuable consideration, the mutuality and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. BACKGROUND. The Company has adopted the Plan to provide additional
incentive compensation to its officers and other employees and to encourage such
individuals, including the Executive, to remain in the employ of the Company.
The Company desires to grant an award (the "Award") to the Executive of shares
of the Company's common stock, par value $.01 per share ("Common Stock"), as
additional incentive for the Executive's services and as an inducement to the
continued services by the Executive to the Company and its subsidiaries, subject
to all of the terms, conditions and restrictions contained herein. The Executive
acknowledges that he has received a copy of the Plan and any prospectus related
thereto from the Company.
2. GRANT OF AWARD. Pursuant to the Plan and subject to the terms and
conditions of this Agreement and the Plan, the Company hereby grants to the
Executive an Award of Thirty-Five Thousand Nine Hundred Seventy-One (35,971)
shares of Common Stock, subject to certain restrictions (individually, a "Share"
and collectively, the "Shares").
3. RESTRICTIONS. Until expiration of the restrictions provided in this
Agreement or in the Plan, the Shares shall be subject to the following
restrictions:
(a) CONTINUED EMPLOYMENT. The Executive shall remain in the
employment of the Company or one of its subsidiaries and if, prior to the lapse
of restrictions on the Shares, the Executive's employment by the Company
terminates for any reason other than termination by the Company without Cause or
by reason of death or disability of Executive prior to the date the restrictions
lapse, the Shares shall immediately be forfeited to the Company and the
Executive shall have no further rights with respect the Shares. The terms
"Cause" and "disability" shall be defined as set forth in Sections 4(a) and (b)
of Executive's Amended and Restated Employment Agreement of October 1, 2000.
13
(b) TRANSFER. The Shares may not be sold, assigned, transferred,
exchanged, pledged, hypothecated, or otherwise encumbered in any manner by the
Executive.
4. LAPSE OF RESTRICTIONS.
(a) GENERAL. Subject to the terms of this Agreement, restrictions on
the Shares shall expire on September 30, 2003, and the Executive shall receive
the Shares with respect to which such restrictions expire within thirty (30)
days after such vesting date.
(b) FORFEITURE OF SHARES. The Executive shall forfeit all of the
Shares subject to restrictions upon the Executive's termination of employment
with the Company or any of its subsidiaries for any reason other than
termination by the Company without Cause or by reason of death or disability.
(c) TERMINATION OF RESTRICTIONS. Notwithstanding the foregoing, the
Compensation Committee of the Board of Directors of the Company shall have the
power, in its sole discretion, to accelerate the expiration of the applicable
restriction period, to waive any restriction with respect to any part or all of
the Shares, or to waive the forfeiture of Shares and to retain restrictions on
Shares that would have been forfeited pursuant to the terms of this Agreement.
5. CERTIFICATES. Each certificate issued in respect of the Shares shall
be registered in the name of Executive and deposited with the Company or its
designee and shall bear the following legend:
"This certificate and the shares of common stock represented hereby
are subject to the terms and conditions (including forfeiture and
restrictions against transfer) contained in The 1997 Rayovac
Incentive Plan and an Agreement entered into between Rayovac
Corporation and the registered owner. Release from such terms and
conditions shall be obtained only in accordance with the provisions
of such Plan and Agreement, copies of which are on file in the
office of the Secretary of Rayovac Corporation, Madison, Wisconsin."
The Executive shall execute and deliver to the Company a stock power or
powers in blank with respect to the Shares.
6. SECTION 83 ELECTION. The Executive agrees not to file an election
under section 83(b) of the Internal Revenue Code of 1986, as amended, with
respect to the Shares.
7. CHANGE IN CONTROL. As more particularly provided in the Plan, all
restrictions with respect to any of the Shares that have not been previously
forfeited
14
as provided in this Agreement shall expire and lapse upon the occurrence of a
Change in Control (as defined in the Plan). If a Change in Control has occurred,
all restrictions on the Shares shall expire immediately prior to the effective
date of the Change in Control .
8. INCORPORATION OF PLAN; DEFINED TERMS. The Plan is incorporated
herein by reference and made a part of this Agreement as if each provision of
the Plan were specifically set forth herein. In the event of a conflict between
the Plan and this Agreement, the terms and conditions of the Plan shall govern.
Unless otherwise expressly defined in this Agreement, all capitalized terms in
this Agreement shall have the meanings given such terms in the Plan.
9. MISCELLANEOUS.
(a) SUCCESSORS; GOVERNING LAW. This Agreement shall bind and inure
to the benefit of the parties, their heirs, personal representative, successors
in interest and assigns. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin.
(b) DIVIDENDS. The Company shall have the discretion to pay to the
Executive any special or regular cash dividends declared by the Board of
Directors, or to defer the payment of cash dividends until the expiration of the
restrictions with respect to the Shares, or reinvest such amounts in additional
shares of Restricted Stock. Any cash payments of dividends that become payable
while any of the Shares remain subject to restrictions hereunder to Executive
with respect to the restricted shares may, in the Company's discretion, be net
of an amount sufficient to satisfy any federal, state and local withholding tax
requirements with respect to such dividends.
(c) CONTINUED EMPLOYMENT. The Agreement does not constitute a
contract of employment. Participation in the Plan does not give the Executive
the right to remain in the employ of the Company or a subsidiary and does not
limit in any way the right of the Company or a subsidiary to change the duties
or responsibilities of the Executive.
(d) AMENDMENT. The Company may amend this Agreement or modify the
provisions for the termination of the restrictions on the Shares without the
approval of the Executive to comply with any rules or regulations under
applicable tax, securities or other laws or the rules and regulations
thereunder, or to correct any omission in this Agreement.
15
IN WITNESS WHEREOF, the parties have executed this Agreement, effective
as of the date set forth below.
Rayovac Corporation
October 1, 2000 By:
---------------------------------------
Xxxxx X. Xxxxx
Chief Executive Officer
EXECUTIVE
--------------------------------
Name: Xxxx X. Xxxxxx
Address: 0000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
16
