EXECUTIVE SEVERANCE AGREEMENT
This EXECUTIVE SEVERANCE AGREEMENT (this "Agreement") is made as of
November 25, 1996, by and between the entity named on the signature page hereto
(the "Company"), Xxxxxxxxx X. Xxxxxxxx (the "Executive").
In order to induce Executive to accept employment with the Company and in
consideration of the covenants and agreements contained herein, the parties
hereto agree as follows:
1. Definitions.
"Agreement" shall have the meaning set forth in the preface.
"Cause" shall mean a termination of the employment of Executive by the
Company or any subsidiary thereof due to (i) the commission by Executive of an
act of fraud or embezzlement (including the unauthorized disclosure of
confidential or proprietary information of the Company or any of its
subsidiaries which results in material financial loss to the Company or any of
its subsidiaries), (ii) the commission by Executive of a felony, (iii) the
willful misconduct of Executive as an employee of the Company or any of its
subsidiaries which is reasonably likely to result in material injury or
financial loss to the Company or any of its subsidiaries or (iv) the willful
failure of Executive to render services to the Company or any of its
subsidiaries in accordance with the terms of Executive's employment which
failure amounts to a material neglect of Executive's duties to the Company or
any of its subsidiaries.
"Change of Control" shall mean a transaction as the result of which any
person or entity not controlled by persons currently owning Common Units
acquires more than 60% of the outstanding Common Units or of the common stock of
a corporation that either controls the Company, directly or indirectly, or is
the successor to the Company.
"Common Units" shall mean the common units of the Company, together with
any securities issued in exchange therefor.
"Company" shall have the meaning set forth in the preface.
"Confidential Information" shall have the meaning set forth in Section 6
below.
"Disability" shall mean the inability of Executive to perform the essential
functions of Executive's job, with or without reasonable accommodation, by
reason of a physical or mental infirmity, for a continuous period of six months.
The period of six months shall be deemed continuous unless Executive returns to
work for at least 30 consecutive business days during such period and performs
during such period services at the level and competence that were performed
prior to the beginning of the six-month period. The date of such Disability (for
purposes of determining the Termination Date in the event of such Disability)
shall be on the first day of such six-month period.
"Good Reason" shall mean (i) the assignment to Executive of duties
materially and adversely inconsistent with Executive's position, duties or
responsibilities as in effect immediately after the date of execution of this
Agreement including, but not limited to, any material reduction in such
positions, duties or responsibilities, or a change in Executive's titles or
offices, as then in effect, or any removal of Executive from, or any failure to
reelect Executive to, any of such positions or (ii) the occurrence of a Change
of Control, provided that a resignation prior to the 90th day following such
Change of Control shall not be deemed a termination for Good Reason.
"Health Benefits" shall have the meaning set forth in Section 3(b) below.
"Insured Benefits" shall have the meaning set forth in Section 3(b) below.
"Senior Executive" shall mean any employee of the Company with significant
managerial responsibility over material areas of the business of the Company,
including, without limitation, financial, marketing, sales, distribution or
manufacturing.
"Severance Term" shall have the meaning set forth in Section 3(a) below.
"Termination Date" shall have the meaning set forth in Section 4(a) below.
2. Job Elimination. If, within the period commencing 90 days from the date
hereof and for so long as Executive is employed by the Company, there shall
occur:
(a) any involuntary termination of Executive's employment (other than for
Cause or Disability);
(b) the resignation of Executive for Good Reason;
(c) any reduction in Executive's annual base salary in effect on the date
hereof; or
(d) any failure by the Company to provide Executive with benefits at least
as favorable as those enjoyed by Executive under any of the pension, life
insurance, medical, health and accident, disability or other employee plans
of the Company on the date hereof, or the taking of any action that would
materially reduce any of such benefits in effect on the date hereof (unless
this reduction relates to a reduction in benefits applicable to all
employees generally);
then, at Executive's option, exercisable by Executive within thirty (30)
days of the occurrence of each and every of the foregoing events, other than a
resignation for Good Reason as a result of a Change of Control, Executive may
resign from employment (or, if involuntarily terminated, give notice of
intention to collect benefits hereunder) by delivering a notice in writing to
the Company, and the provisions of Section 3 of this Agreement shall apply. A
notice of resignation for Good Reason as a result of a Change of Control shall
be delivered to the Company not earlier than 90 days nor later than 120 days
following the Change of Control in order for the provisions of Section 3 of this
Agreement to apply.
2
3. Continuing Compensation and Benefits.
(a) The Company will continue to pay to Executive his then annual base
salary for a period of twelve (12) months after the effective date of the
termination of Executive's employment (the "Severance Term"). Subject to Section
7 below, during the Severance Term, Executive will be free to seek, accept and
engage in other full-time employment.
(b) During the Severance Term, the Company will continue to provide to
Executive the medical benefits Executive was entitled to on the date hereof
(hereinafter "Health Benefits") and to the extent the Company's insurance plans
permit, the long-term disability and life insurance benefits Executive was
entitled to on the date hereof (hereinafter "Insured Benefits"), except that the
amount of coverage under the Insured Benefits will be based on the rate of pay
Executive is receiving from the Company at the time of the event that gives rise
to a claim under the Insured Benefits. The continued provision of the Health
Benefits and the Insured Benefits will cease (i) when payments to Executive
cease under Section 3(a) above or (ii) when Executive becomes employed on a
full-time basis, whichever occurs first.
(c) On the effective date of termination of Executive's employment, the
Company will pay Executive for accrued by unused vacation (at his rate of pay in
effect on the date hereof), if any, to the extent provided in the Company's
policies on the date hereof, but Executive shall not accrue any vacation during
the period referred to in Section 3(a) above.
4. Accrued Bonuses.
(a) If the effective date of the termination of Executive's employment (the
"Termination Date") is on or before the end of the second quarter of the
Company's fiscal year and after December 31, 1997, then the Company shall pay to
Executive a bonus in an amount equal to the bonus paid to Executive for the
prior fiscal year under the Company's Bonus Plan multiplied by a fraction, the
numerator of which is the number of completed fiscal quarters which have elapsed
in the Company`s current fiscal year through and including the Termination Date,
and the denominator of which is 4.
(b) If the Termination Date is after the end of the second quarter of the
Company's fiscal year or occurs at any time prior to December 31, 1997, then the
Company shall, at the time bonuses for such fiscal year are paid to employees of
the Company, pay to Executive a bonus in an amount equal to the bonus for the
such fiscal year to which Executive would have been entitled had he not been
terminated multiplied by a fraction, the numerator of which is the number of
completed days which have elapsed in the Company's current fiscal year through
and including the Termination Date, and the denominator of which is 365.
(c) If the Termination Date occurs within 12 months of a Change of Control,
then the Company shall, within five business days of the Termination Date, pay
to Executive 100% of the greater of (i) the targeted bonus that Executive would
have received in respect of such fiscal year had he not been terminated and (ii)
the bonus paid to Executive in respect of the prior fiscal year.
3
(d) The provisions of this Section 3 will be effective beginning 90 days
after the date hereof.
5. Termination for Cause. If Executive's employment is terminated for
Cause, all of Executive's rights under paragraphs 2 and 3 shall cease as of the
effective date of the Termination Date, except that Executive (i) shall be
entitled to received accrued salary through the Termination Date and (ii) shall
be entitled to receive the payments and benefits to which Executive was then
entitled under the employee benefit plans of the Company or any affiliate
thereof as of the Termination Date.
6. Confidentiality. Executive acknowledges that the information,
observations and data obtained by him while employed by the Company concerning
the business or affairs of the Company and its subsidiaries that (i) are not
available to the public, customers, suppliers and competitors of the Company,
(ii) are in the nature of trade secrets, or (iii) the disclosure of which could
reasonably be expected to cause a financial loss to the Company, or otherwise
have a material adverse effect on the Company (collectively, the "Confidential
Information") are the property of the Company or such subsidiary. Therefore,
Executive agrees that he shall not disclose to any unauthorized person or use
for his own account any Confidential Information without the prior written
consent of the Board, unless and to the extent that the aforementioned matters
become generally known to and available for use by the public other than as a
result of Executive's acts or omissions to act. Executive shall deliver to the
Company at the termination of employment, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes and
software and other documents and data (and copies thereof) relating to the
Confidential Information, work product or the business of the Company or any of
its subsidiaries which he may then possess or have under his control.
7. Notice/Consultation. In consideration of the foregoing, Executive agrees
to give the Company no less than 30 days prior written notice if at any time
Executive decides to resign from the Company's employ. Since, in certain
respects, Executive will be an employee of the Company during any Severance
Term, Executive agrees to consult with the Company during such Severance Term.
This consultation obligation will not prevent or interfere with Executive
seeking, accepting or engaging in full-time employment.
8. Term. This Agreement will be in effect for a period of three years from
the date hereof and shall be automatically renewed for successive periods of two
years each, unless terminated by Executive upon 30 days notice prior to the
expiration of the original or any renewal term.
9. Tax Withholding. All payments to Executive hereunder will be earned and
prorated on a daily basis, but shall be payable at the same time and in the same
manner as executives of the Company, or its successor, are paid their salaries.
The Company shall have the power to withhold, require Executive to remit to the
Company in cash or offset against any amounts otherwise payable Executive, an
amount sufficient to satisfy all Federal, state, local and foreign withholding
tax requirements relating to such payments, and the Company may defer any
payments until such requirements are satisfied.
4
10. Executive's Employment by the Company. Nothing contained in this
agreement shall be deemed to obligate the Company or any subsidiary of the
Company to employ Executive in any capacity whatsoever or to prohibit or
restrict the Company (or any such subsidiary) from terminating the employment of
Executive at any time or for any reason whatsoever, with or without Case.
11. Binding Effect. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.
12. Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in writing executed by
the party so waiving. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party's rights or
privileges hereunder or shall be deemed a waiver of such party's rights to
exercise the same at any subsequent time or times hereunder.
13. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without regard to
the conflicts of law principles thereof.
14. Jurisdiction. Any suit, action or proceeding with respect to this
Agreement, or any judgment entered by any court in respect thereof, shall be
brought in any court of competent jurisdiction in the State of New York, and
both the Company and Executive hereby submit to the exclusive jurisdiction of
such courts for the purpose of any such suit, action, proceeding or judgment.
Executive and the Company hereby irrevocably waive any objections which either
may now or hereafter have to the laying of the venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any court of
competent jurisdiction in the State of New York, and hereby further irrevocably
waive any claim that any such suit, action or proceeding brought in any such
court has been brought in any inconvenient forum.
15. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), two days after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.
(i) If to the Company:
Remington Products Company, L.L.C.
00 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy: 000-000-0000
5
and
Remington Products Company, L.L.C.
c/o Vestar Equity Partners, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxx
Telecopy: 000-000-0000
(ii) If to Executive:
Xxxxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
16. Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
17. Counterparts. This Agreement may be executed in separate counterparts
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
18. Rights Cumulative. The rights and remedies of Executive and the Company
under this Agreement shall be cumulative and not exclusive of any rights or
remedies which either would otherwise have hereunder or at law or in equity or
by statute, and no failure or delay by either party in exercising any right or
remedy shall impair any such right or remedy or operate as a waiver of such
right or remedy, nor shall any single or partial exercise of any power or right
preclude such party's other or further exercise or the exercise of any other
power or right.
* * * * *
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
REMINGTON PRODUCTS COMPANY, L.L.C.
By: ___________________________________
Name:
Title:
___________________________________
XXXXXXXXX X. XXXXXXXX
7
