Rayovac 2008 Annual Report Download - page 107

Table of Contents
Index to Financial Statements
agreement includes non-competition and non-solicitation provisions that extend for one year following the executive’s termination and
confidentiality provisions that extend for two years following the executive’s termination.
Termination in the event that Mr. Lumley elects to invoke his right to terminate his employment for good reason. The employment agreement for
Mr. Lumley permits him, under certain circumstances, to terminate his employment relationship upon the occurrence of an event of good reason. Except as
modified by the next paragraph, the election by such executive to terminate his employment as a result of the occurrence of an event of good reason is, for the
purposes of Mr. Lumley’s employment agreement as well as any stock option agreements or restricted stock award agreements with the Company, treated as a
termination by the Company without cause. As such, it would entitle the executive, contingent upon such executive’s execution of a separation agreement with a
release of claims agreeable to the Company, to receive the pay and benefits described above under “Termination without Cause or for Death or Disability”. For
Mr. Lumley, good reason is defined as the occurrence of any of the following events without such executive’s consent:
(i) any reduction in the applicable executive’s annual base salary or MIP target level;
(ii) the required relocation of Mr. Lumley’s place of principal employment to an office more than 75 miles, from Mr. Lumley’s current office, or the
requirement by the Company that the executive be based at an office other than the such executive’s current office on an extended basis;
(iii) a substantial diminution or other substantive adverse change in the nature or scope of the executive’s responsibilities, authorities, powers, functions
or duties; or
(iv) a breach by the Company of any of its other material obligations under Mr. Lumley’s employment agreement, if not cured within thirty (30) days
after written notice of such breach;
(v) As more fully described below the sale of Global Batteries and Personal Care.
As described above, one event of “good reason” for Mr. Lumley is deemed to occur upon the sale of Global Batteries and Personal Care. However, the
right of Mr. Lumley to terminate his employment as a result of such a sale is contingent upon Mr. Lumley electing to exercise that right during the 60 day period
preceding the one year anniversary of the closing of the sale with the termination of employment to be effective on the one year anniversary date of such closing
and that as a further condition executive will have remained employed by the acquirer of the business segment during the full one year period following such
closing date. During such one-year period, the executive would be guaranteed an annual bonus of 100% of his target bonus amount. Unless the executive is
terminated at the time of such sale, the Company is obligated to deposit in escrow on the closing date of the sale an amount equal to double the sum of (i) such
executive’s annual base salary and (ii) the target MIP award amount such executive would be eligible to receive if the Company met 100% of the applicable
performance goals established by the Board of Directors or, if higher, the amount of the MIP award made to such executive for the fiscal year ending
immediately prior to the closing of such sale. If such executive’s employment is terminated without cause or by reason of death or disability following the
closing date of the sale but before the first anniversary of the closing date of the sale or upon the executive’s proper election to terminate his or her employment
for good reason, then the escrow agent will pay out the escrowed amount to the executive over 24 months in lieu of the Lumley Cash Severance. The executive
would then also be entitled to receive those benefits described above under “Termination of Mr. Lumley without Cause or for Death or Disability” other than the
Lumley Cash Severance.
As discussed under the heading “Retention Agreements,” beginning on page 82, Mr. Lumley is also party to a retention agreement between Mr. Lumley
and the Company dated as of June 9, 2008 (“Mr. Lumley’s retention agreement”). Mr. Lumley’s retention agreement provides that in the event that prior to
December 31, 2009 (i) Mr. Lumley’s employment with the Company is considered to have been terminated by the executive for Good Reason (as defined in
Mr. Lumley’s employment agreement and described above under “Termination in the event that Mr. Lumley elects to invoke his right to terminate his
employment for good reason”) or (ii) the
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008