EXHIBIT 10.20
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.
"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 a 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.
"Confidential Information" shall have the meaning set forth in
Section 6 below.
"Good Reason" shall mean 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.
"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, 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 2 of this Agreement shall apply. The events
described in clause (b) above shall be deemed to occur in the event of a Change
of Control which results in the Company being (1) a member of a different
consolidated group and (2) controlled, directly or indirectly by another entity
which actively conducts an operating business.
3. Continuing Compensation and Benefits.
(a) The Company will continue to pay to Executive his annual base
salary at Executive's rate of pay in effect on the date hereof for a period of
twelve (12) months after the effective date of the termination of Executive's
employment (the "Severance Term"). Subject to Section 6 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"),
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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 but 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
lesser of (i) 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 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, and (ii) 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, provided that, in the event of a Termination
occurring at any time during the period ending December 31, 1997, the amount
payable under this paragraph 3(b) shall be determined solely under clause (i) of
this paragraph 3(b). The Company shall pay one-half of the projected amount
payable under this paragraph 3(b) at the end of the Company's fiscal year and
the remainder at completion of the Company's year end audit.
(c) If the Termination Date occurs within 12 months of a Change of
Control, then the Company shall, within 5 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.
(d) The provisions of this Section 3 will be effective beginning 90
days after the date hereof.
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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 receive 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. Non-Compete; Non-Solicitation.
(a) Executive agrees that during the Non-Compete Period (as defined
below), he shall not directly or indirectly own, manage, control, participate
in, consult with, render services for, or in any manner engage in any business
that competes anywhere in the United States, Canada or anywhere else in the
world with the businesses of the Company or its subsidiaries as such businesses
exist or are in process on the Termination Date. Nothing herein shall prohibit
Executive from owning not more than 5% of the outstanding stock of any class of
a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation. For purposes of this
Agreement, the term "Non-Compete Period" means the period beginning on the date
of this Agreement and ending on the last day of the Severance Term.
(b) Executive shall not directly or indirectly through another
entity (i) induce or attempt to induce any Senior Executive of the Company or
its subsidiaries to leave the employ of the Company or such subsidiary, or in
any way interfere with the relationship between the Company or its subsidiaries
and any Senior Executive thereof, (ii) hire any person who was a Senior
Executive of the Company or its subsidiaries at any time during Executive's
employment with the Company until the later of the first anniversary of the
Termination Date and the six month anniversary of such Senior Executive's
departure from the Company, or (iii) for the two year period after the
termination of his employment with the Company induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company or its
subsidiaries to cease doing business with the Company or its subsidiaries, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or its subsidiaries.
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(b) If, at the time of enforcement of this Section 7, a court or
arbitrator shall hold that the duration, scope or area restrictions stated
herein are unreasonable under circumstances then existing, the parties agree
that the maximum duration, scope or area reasonable under such circumstances
shall be substituted for the stated duration, scope or area and that the court
or arbitrator shall be allowed to revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law.
(c) In the event of the breach or a threatened breach by Executive,
of any of the provisions of Section 6 or this Section 7, the Company, in
addition and supplementary to other rights and remedies existing in its favor,
may apply to any court of law or equity of competent jurisdiction for specific
performance or injunctive or other relief in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
8. 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.
9. Term. This Agreement will be in effect for a period of three
years from the date hereof.
10. 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.
11. 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 Cause.
12. Administration by Management Committee. This Agreement shall be
administered by the Management Committee, which shall have full power and
authority to construe and administer this Agreement as it may deem advisable.
Any action taken under the provisions of this Agreement by the Management
Committee in connection with the administration of this Agreement shall be, in
each case, within the sole discretion of the Management Committee and conclusive
and binding upon the Company, Executive, all beneficiaries of Executive, and all
persons and entities having any interest therein.
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13. 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.
14. 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 a 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.
15. 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.
16. 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.
17. 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
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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:
18. 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.
19. 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.
20. Injunctive Relief. The Executive acknowledges and agrees that a
violation of any of the terms of this Agreement will cause the Company
irreparable injury for which adequate remedy at law is not available.
Accordingly, it is agreed that the Company shall be entitled to an injunction,
restraining order or other equitable relief to prevent breaches of the
provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction in the United States or
any state thereof, in addition to any other remedy to which it may be entitled
at law or equity.
21. 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.
* * * * *
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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
