Exhibit 10.18
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SEVERANCE AGREEMENT
This Agreement, dated as of 19 March 1998, 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 Randall J. Steward,
an individual residing at 3024 Woodland Trail, Middleton, Wisconsin 53562 (the
"Executive").
BACKGROUND
The Company considers it essential to the best interests of its shareholders to
foster the continued employment of key managers.
UNDERTAKINGS
Now therefore, the parties agree:
1. Term of Agreement. The term of this Agreement (the "Term") shall
commence on 19 March 1998 and shall continue in effect through 18 March
1999; and shall continue thereafter for additional one year Terms
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 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).
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(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 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 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.
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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
one-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 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.
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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 (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 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.
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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, "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.
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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.
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.
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:
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(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 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/ Randall J. Steward
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Kent J. Hussey Randall J. Steward
President