EXHIBIT 10.10
SEVERANCE AGREEMENT
This Agreement, dated as of 31 August 1999, is made by and between Rayovac
Corporation (the "Company"), a Wisconsin corporation with its principal business
address at 601 Rayovac Drive, Madison, Wisconsin 53711, and Luis A. Cancio, an
individual residing at 3 Ridgewood Drive, Bridgewater, Connecticut 06752 (the
"Executive").
BACKGROUND
The Executive has been, and continues to be, privy to important confidential
information of the Company, and has developed substantial skills and knowledge
related to the Company's industry, which skills and knowledge would be of
substantial value to the Company's competition.
The Company considers it essential to the best interests of its shareholders to
foster the continued employment of key managers, and to limit their ability to
compete with the Company after their employment terminates.
The Executive and the Company wish to execute this Agreement to formalize
additional terms of the Executive's employment.
UNDERTAKINGS
Now therefore, the parties agree:
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1. TERM OF AGREEMENT. The term of this Agreement (the "Term") shall commence on
the date hereof and shall continue in effect through 30 September 1999;
provided, however, that commencing on 1 October 1999 and each year
thereafter, the Term shall automatically extend one additional year unless,
not later than 30 days prior to the end of the preceding Term, the Company
or the Executive shall give notice not to extend the Term.
2. SEVERANCE PAYMENTS.
2.1 If the Executive's employment is terminated during the Term (a) by the
Company without Cause (as defined below) or (b) by reason of death or
Disability (as defined below), then the Company shall pay the Executive
the amounts, and provide the Executive the benefits, described in
Section 2.2 (the "Severance Payments").
2.2 (a) The Company shall pay to the Executive as severance, an amount in
cash equal to two times the sum of (i) the Executive's base salary
as in effect for the fiscal year ending immediately prior to the
fiscal year in which such termination occurs, 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).
(b) For the 12-month period immediately following such termination,
the Company shall arrange to provide the Executive and his
dependents insurance benefits substantially similar to those
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provided to the Executive and his dependents immediately prior to
the date of termination, at no greater cost to the Executive than
the cost to the Executive immediately prior to such date. Benefits
otherwise receivable by the Executive pursuant to this Section
2.2(b) shall cease immediately upon the discovery by the Company
of the Executive's breach of the covenants contained in Sections 5
or 6 hereof. In addition, benefits otherwise receivable by the
Executive pursuant to this Section 2.2(b) shall be reduced to the
extent benefits of the same type are received by or made available
to the Executive during the 12-month period following the
Executive's termination of employment (and any such benefits
received by or made available to the Executive shall be reported
to the Company by the Executive); provided, however, that the
Company shall reimburse the Executive for the excess, if any, of
the cost of such benefits to the Executive over such cost
immediately prior to the date of termination.
2.3 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.
2.4 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 2.
3. TERMINATION PROCEDURES. During the Term, any purported termination of the
Executive's employment (other than by reason of death) shall be communicated
by written notice of termination from one party to the other
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in accordance with Section 8 hereof. The notice of termination shall
indicate the specific termination provision in this Agreement relied upon
and shall set 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.
4. NO RIGHTS TO EMPLOYMENT. This Agreement shall not be construed as creating
an express or implied contract of employment, and except as otherwise agreed
in writing between the Executive and the Company and authorized by the Board
of Directors of the Company, the Executive shall not have any right to be
retained in the employ of the Company.
5. EXECUTIVE'S COVENANT NOT TO COMPETE.
5.1 During the Non-Competition Period, the Executive 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 an
class listed on an exchange or the Nasdaq Stock Market). For purposes
of this Agreement, the "Non-Competition Period" means the period
beginning on the date hereof and continuing until the date which is the
two-year anniversary of the later to occur of (a) the end of the Term
and (b) the date of termination.
5.2 Without limiting the generality of Section 5.1 above, during the
Non-Competition Period the Executive will not, directly or indirectly,
in any
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capacity, either separately, jointly, or in association with others,
solicit or otherwise contact any of the Company's customers or
prospects 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.
5.3 During the Non-Competition Period, the Executive shall not, other than
in connection with employment for the Company, solicit the employment
or services of any employee of the Company who is or was an employee of
the 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.
5.4 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 to revise the foregoing restrictions to include the maximum
restrictions allowed under the applicable law.
5.5 For purposes of this Section 5 and Section 6, the "Company" refers to
the Company and any incorporated or unincorporated affiliates of the
Company.
6. SECRET PROCESSES AND CONFIDENTIAL INFORMATION.
6.1 The Executive will hold in strict confidence and, except as the Company
may authorize or direct, not disclose to any person or use
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(except in the performance of his services hereunder) any confidential
information or materials received by the Executive from the Company or
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 6.1, 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 will return to the Company
promptly upon its request any Company information or materials in the
Executive's possession or under the Executive's control.
6.2 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 Inventions shall be the sole property of the Company, and the
Executive hereby assigns to the Company all of
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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 Inventions. The
Executive will assist the Company at the Company's expense to obtain
and from time to time enforce patents and copyrights on the Inventions.
6.3 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.
7. SUCCESSORS; BINDING AGREEMENT
7.1 In addition to any obligations imposed by law upon any successor to the
Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
such succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the
Executive to the Severance Payments, except that, for purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the date of termination. For purposes
of this Agreement,
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"Company" shall mean Rayovac Corporation, a Wisconsin corporation, and
shall include any successor to its business or assets which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
7.2 This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If the Executive shall die while any amount would still be payable to
the Executive hereunder (other than amounts which, by their terms,
terminate upon the death of the Executive) if the Executive had
continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the
Executive's estate.
8. NOTICES. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement 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.
9. SURVIVAL. The obligations of the Company and the Executive under this
Agreement which by their nature may require either partial or total
performance after the expiration of the Term (including, without limitation,
those under Sections 2, 5 and 6 hereof) shall survive such expiration.
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10. AMENDMENT; WAIVER. This Agreement may be amended, modified, superseded, or
canceled, 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.
11. EQUITABLE RELIEF. Breach of any provision of Sections 5 or 6 of this
Agreement would result in irreparable injuries to the Company, the remedy at
law for any such breach will be inadequate, and 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.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire understanding of the
parties hereto with respect to the subject matter hereof and supersedes all
prior negotiations, discussions, writings, and agreements between them.
13. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
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14. COUNTERPARTS. This Agreement may be executed in two counterparts, each of
which shall be deemed to be an original but both of which together will
constitute one and the same instrument.
15. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the meanings indicated below:
(a) "Cause" for termination by the Company of the Executive's employment
shall mean (i) the commission by the Executive of any fraud,
embezzlement or other material act of dishonesty with respect to the
Company or any of its affiliates (including the unauthorized disclosure
of confidential or proprietary information of the Company or any of its
affiliates or subsidiaries); (ii) Executive's conviction of, or plea of
guilty or NOLO CONTENDERE to, a felony or other crime involving moral
turpitude; (iii) Executive's willful misconduct; (iv) willful failure
or refusal by Executive to perform his duties and responsibilities to
the Company or any of its affiliates which failure or refusal to
perform is not remedied within 30 days after receipt of a written
notice from the Company detailing such failure or refusal to perform;
or (v) Executive's breach of any of the terms of this Agreement or any
other agreement between Executive and the Company which breach is not
cured within 30 days subsequent to notice from the Company to Executive
of such breach.
(b) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the
Executive's inability to perform his duties by reason of any mental,
physical or other disability for a period of at least 6 consecutive
months (for purposes hereof, "disability" has the same meaning as in
the Company's disability policy), the Company shall have given the
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Executive a notice of termination for Disability, and, within 30 days
after such notice of termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
RAYOVAC CORPORATION EXECUTIVE
By: /s/ Kent J. Hussey /s/ Luis A. Cancio
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Kent J. Hussey Luis A. Cancio
President and Chief Operating Officer