Rayovac 2009 Annual Report Download - page 98

Table of Contents
Index to Financial Statements
For the Fiscal 2010 Cash LTIP, if the Company achieves less than 85% of the Fiscal 2010 Cash LTIP performance goals, then the participant would
receive no cash award under the Fiscal 2010 Cash LTIP. If the Company achieved at least 85% but less than 100% of the Fiscal 2010 Cash LTIP
performance goals, then the participant would be eligible to earn a stated percentage of the award, payable as described below. For performance in excess of
the Fiscal 2010 Cash LTIP performance goals, such participant would have received an award in excess of the target cash−based award amount, up to 200%
of such target cash−based award amount for achieving 115% or more of the Fiscal 2010 Cash LTIP performance goals. For any Cash LTIP award so earned
based on Fiscal 2010 performance, 33 1/3% of such earned amount is payable on or before December 31, 2010, 33 1/3% of such earned amount is payable on
or before December 31, 2011 and the remaining 33 1/3% of such cash award is payable on or before December 31, 2012; provided, that the participant’s
employment with the Company has not been terminated with cause by the Company or voluntarily by the participant prior to such date. As mentioned
above, none of the named executive officers participate in the 2010 Cash LTIP.
Retention Agreements
During Fiscal 2008, each of Mr. Lumley, Mr. Heil, Mr. Genito and Ms. Yoder executed retention agreements with the Company. Mr. Hussey
executed a retention agreement with the Company in Fiscal 2009. The Compensation Committee, in evaluating the critical roles performed by the members
of the Spectrum Leadership Team and the potential negative impact on the Company as a whole if any of those executives were to end their employment
relationship with the Company, determined it to be in the best interests of the Company to put in place for those executives a retention program designed to
give those executives additional incentive not to seek alternative employment opportunities. For each executive, the retention agreement provides such
executive with the opportunity to earn an additional cash amount equal to 150% of such executive’s annual base salary as in effect on the date the retention
agreement was executed in two installments contingent upon such executive remaining employed by the Company through December 31, 2009. If the
executive continued to be an employee of the Company on through December 31, 2008, such executive received the first payment in an amount equal to
75% of such executive’s annual base salary. Each of Mr. Hussey, Mr. Genito, Mr. Lumley and Mr. Heil received this payment in January 2009. If the
executive continues to be employed by the Company through December 31, 2009, such executive would receive the second and final payment in an amount
equal to 75% of such executive’s annual base salary. In the event that prior to December 31, 2009 (i) the executive’s employment with the Company is
considered to have been terminated by the executive for good reason (as defined in the relevant employment agreement) or Mr. Hussey experiences a
constructive termination (as defined in Mr. Hussey’s employment agreement) or (ii) the Company terminates such executive’s employment without cause
(as defined in the relevant employment agreement), the executive would be entitled to receive any portion of the total potential award that has not yet been
paid. As a result of Ms. Yoder’s departure on October 8, 2008 from the Company, she did not receive the foregoing retention payments.
One−Time Cash Bonus Payment
In connection with the Company’s emergence from Chapter 11 of the Bankruptcy Code, the Company’s Board of Directors approved one−time cash
payments to certain members of Company management, including each of our current named executive officers, in recognition of efforts exerted during the
bankruptcy process above and beyond the normal management functions for those members of management. Mr. Hussey received $300,000, Mr. Genito
received $200,000, Mr. Lumley received $100,000 and Mr. Heil received $100,000, which were paid in September 2009.
Pre−Bankruptcy Outstanding Equity and Equity Grants
The Company emerged from bankruptcy on August 28, 2009. At that time, all of the outstanding capital stock of the Company was extinguished
pursuant to the Company’s Plan of Reorganization. As a result, (i) all outstanding stock held by any of the named executive officers and (ii) all outstanding
unvested equity grants to the Company’s named executive officers, including grants made under each such executive’s employment agreement and all
equity grants made under any than existing incentive plan, were cancelled.
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