Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

This Separation Agreement and Release (“Agreement”) is entered into as of the
28th day of December, 2012 and is between Spectrum Brands, Inc. (which in this
Agreement is referred to as the “Company”) and me, John Heil.  For good and
valuable consideration, the sufficiency of which is acknowledged, the parties
agree as follows:
 
1.           Background. The Company and I have agreed that, following my
assistance in transitioning operations, my employment with the Company will
terminate effective March 31, 2013 (“Termination Date”).  Because the Company
desires to provide me with certain severance benefits pursuant to my Amended and
Restated Employment Agreement dated January 16, 2007, as subsequently amended on
November 10, 2008, February 24, 2009, August 28, 2009 and November 16, 2010,
respectively (collectively “Employment Agreements”), the parties have entered
into this Agreement.
 
2.           Employment Termination. I understand that my employment with the
Company is considered ended effective March 31, 2013 and that, pursuant to the
Transition Letter, my termination will be treated as a termination without Cause
under the Employment Agreements.  Effective as of the close of business on the
Termination Date, my employment shall cease and I will be considered to have
resigned from any and all titles, positions and appointments that I hold with
the Company and any of its affiliates (the “Company Group”).  I will promptly
thereafter receive all accrued but unpaid base salary, vacation and other
accrued amounts, as well as all outstanding expense reimbursements.
 
3.           Severance Pay and Benefits. In return for the execution of this
Agreement, and it becoming effective pursuant to Paragraph 18 below, and me
honoring all of its terms, the Company will provide me with the following pay
and benefits (with (a), (b) and (c) being delayed in accordance with the last
paragraph of this Section 3):
 
 
a.
Severance Pay of $1,000,000, which is two (2) times my annual base salary of
$500,000 (“Severance Pay”), to be paid over a period of twenty-four (24) months
in accordance with the Company’s regular payroll process, commencing with the
first payroll date following my Termination Date.  The period of time during
which I am provided this Severance Pay shall be known as the “Severance Period.”

 
 
b.
Severance Bonus Pay of $1,478,000, which is two (2) times my 2012 Management
Incentive Plan (“MIP”) actual payment of 147.8% of my annual base salary
(“Severance Bonus Pay”), to be paid over a twenty-four (24) month period in
accordance with the Company’s regular payroll process, commencing with the first
payroll date following the Termination Date.

 
 

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c.
A monthly amount equal to the monthly COBRA cost as of the date of my
termination of the medical, dental, vision and prescription drug benefits
(“Healthcare Benefits”) for me and my eligible dependents for twenty-four (24)
months following the Termination Date (the “Healthcare Benefit Payment”) at the
level and of the type provided to active employees of the Company from time to
time.

 
d.
My Executive Life Insurance benefit for twenty-four (24) months following the
Termination Date.

 
e.
In addition, the Company shall pay to me, between January 1 and March 31 of the
year following the year in which the Healthcare Benefit Payment is includible in
my income for Tax Purposes, an additional amount to make me whole for the amount
of such tax liability and the additional amount (the “Gross Up”).  The Company
is not liable for any excise, penalty or other like taxes or any interest with
respect to the payment of taxes.  The amount of the Gross Up will be determined
by an accounting firm chosen by the Company using any financial information
reasonably requested of me to calculate the amount of the Gross Up.

 
f.
Additional severance equal to the amount determined pursuant to the 2013 MIP
based on actual performance results for fiscal year 2013 using my 2013 MIP
target of 100% of my annual base salary, with such amount then prorated using
the fraction equal to the number of days that I have been employed by the
Company during fiscal year 2013 over 365.  The foregoing amount will be paid at
the same time as other payments are made to 2013 MIP participants, and in any
case no later than December 31, 2013.

 
g.
Payment for any accrued but unused vacation days that I am entitled to receive
as of my Termination Date, with such payment being made on the first regularly
scheduled payroll date occurring on or following the Termination Date.

 
h.
Any legitimate business expenses that remain unreimbursed as of the Termination
Date that are submitted for reimbursement in accordance with Company policy
within 30 days from the Termination Date.

For the avoidance of doubt, the Severance Benefits described in this Paragraph 3
are not intended to result in any duplication of any payments or benefits
described in this Agreement or any compensation or benefits plans, policies,
programs, agreements or arrangements of the Company.  Subject to my compliance
with Paragraph 11 of this Agreement, the obligations of the Company under this
Agreement shall not be affected by my receipt of compensation and benefits from
another employer in the event that I accept new employment following the
Termination Date, and I shall not be obligated to seek other employment or take
any other action

 
 

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by way of mitigation of the amounts payable to me under any of the provisions of
this Agreement.  The obligations of the Company are not affected by my death or
disability.

I acknowledge that since I am a “specified employee” (within the meaning of Code
section 409A) at the time of my separation from service, the payment of any
amount under this Agreement that is considered deferred compensation subject to
409A and is to be paid on account of my separation from service shall be
deferred, as required by Code section 409A(a)(2)(B)(i), for six (6) months after
my separation from service or, if earlier, my death (the “409A Deferral
Period”).  Any payments that otherwise would have been made during the 409A
Deferral Period shall be paid in a lump sum on the date after the 409A Deferral
Period expires, and the balance of any payments shall be made as scheduled.

Notwithstanding anything herein to the contrary, any payment or benefit under
this Agreement or otherwise that is exempt from Section 409A pursuant to
Treasury Regulation § 1.409A-1(b)(9)(v)(A) or (C) (relating to certain
reimbursements and in-kind benefits) shall be paid or provided to Executive only
to the extent that the expenses are not incurred, or the benefits are not
provided, beyond the last day of the second calendar year following  the
calendar year in which Executive’s “separation from service” occurs; and
provided further that such expenses are reimbursed no later than the last day of
the third calendar year following the calendar year in which Executive’s
“separation from service” occurs.  To the extent any indemnification payment,
expense reimbursement, or the provision of any in-kind benefit is determined to
be subject to Section 409A (and not exempt pursuant to the prior sentence or
otherwise), the amount of any such indemnification payment or expenses eligible
for reimbursement, or the provision of any in-kind benefit, in one calendar year
shall not affect the indemnification payment or provision of in-kind benefits or
expenses eligible for reimbursement in any other calendar year (except for any
life-time or other aggregate limitation applicable to medical expenses), and in
no event shall any indemnification payment or expenses be reimbursed after the
last day of the calendar year following the calendar year in which Executive
incurred such indemnification payment or expenses, and in no event shall any
right to indemnification payment or reimbursement or the provision of any
in-kind benefit be subject to liquidation or exchange for another benefit.

4.           Acknowledgement.  I understand that the Severance Pay and Benefits
provided in Paragraph  3 will not be paid or provided unless I accept this
Agreement, it becomes effective (see Paragraph 18), and I honor its terms.
 
5.           Release.  I understand and agree that my acceptance of this
Agreement means that, except as stated in Paragraph 9, I am forever waiving and
giving up any and all claims I may have, whether known or unknown, against the
Company Group and related companies, their employees and agents for any personal
monetary relief for myself, benefits or remedies that are based on any act or
failure to act that occurred before I signed this Agreement.  I understand that
this release and waiver of claims include claims relating to my employment and
the termination of my employment; any Company policy, practice, contract or
agreement; any tort or personal injury; any policies, practices, laws or
agreements governing the payment of wages, commissions or other compensation;
any laws governing employment discrimination including, but not limited to, the
Age Discrimination in Employment Act (“ADEA”), Older Workers Benefits Protection
Act, Title VII of the Civil Rights Act, the Employee Retirement Income
 

 
 

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Security Act, the Americans with Disabilities Act, the Equal Pay Act, the Family
and Medical Leave Act, the Genetic Non-Discrimination Act, the Lilly Ledbetter
Fair Pay Act, the Worker Adjustment and Retraining Notification Act, the
Wisconsin Fair Employment Act, and any state or local laws; any laws governing
whistle blowing or retaliation, including but not limited to the Sarbanes-Oxley
Act; any laws or agreements that provide for punitive, exemplary or statutory
damages; and any laws or agreements that provide for payment of attorneys’ fees,
costs or expenses.
 
6.           Equity Awards.  I understand that my Equity Awards for fiscal year
2010 and fiscal year 2011 have been fully earned and fully vested. I understand
that the performance-based portion of my Equity Award for 2012 and my Spectrum
500 Award and 2012 Bridge Equity Award have been fully earned and vested.  I
also understand that all remaining earned, but unvested Equity Awards will
continue to vest in accord with the applicable Equity Award Agreement(s).  I and
the Company agree that the summary of earned and unvested awards as set forth on
Annex A to this Agreement is accurate.  I understand that I will not be eligible
to participate in the 2013 Equity Award Plan or the Spectrum 750 Plan.
 
7.           No Further Rights and Benefits.  As of the effective date of this
Agreement (see Paragraph 18), I agree that I have no further rights deriving
from my employment by the Company and will not be entitled to any further
compensation or non-vested benefits, except as provided in this Agreement under
any employee benefit plan in which I am a participant, my rights to
indemnification (including advancement of legal fees), directors’ and officers’
liability insurance, vested equity and vested benefits.
 
8.           No Disparagement. For three (3) years, I agree not to make
critical, negative or disparaging remarks about the Company, its
products/services, its employees or agents to others, and/or make statements
that might otherwise harm to the goodwill of the Company.  I also agree not to
disclose personal or private information about the Company or its employees,
agents or clients except in compliance with legal process.  The Company agrees
that its Board of Directors and senior management level employees that I worked
with not make negative or disparaging comments about me for three (3)
years.  The foregoing shall not be violated by legal testimony, normal
competitive type statements or rebuttal of statements made by others.
 
9.           Claims Not Waived.  I understand that this Agreement does not waive
any claims that I may have:  (a) for compensation for illness or injury or
medical expenses under any worker’s compensation statute; (b) for benefits under
any plan currently maintained by the Company that provides for retirement
benefits; (c) under any law or any policy or plan currently maintained by the
Company that provides health insurance continuation or conversation rights; or
(d) any claim that by law cannot be released or waived.
 
10.           Government Cooperation.  Nothing in this Agreement prohibits me
from cooperating with any government agency.  I specifically acknowledge and
agree that the Release set forth in Paragraph 5 does not prohibit me from filing
a charge of discrimination with the state Department of Human Rights or the
federal Equal Employment Opportunity Commission although I will not be able to
recover any damages if I file such a charge.
 

 
 

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11.           Prior Confidentiality, Non-Compete and Intellectual Property
Agreements.  I agree and understand that this Agreement does not supersede any
obligation to which I was subject under a prior agreement while employed with
the Company that addresses confidentiality, non-competition, patents or
copyright, including those set forth in the Employment Agreement; nor does this
Agreement reduce my obligations to comply with applicable laws relating to trade
secrets, confidential information or unfair competition.
 
12.           Non-admission.  I and the Company both acknowledge and agree that
nothing in this Agreement is meant to suggest that the Company has violated any
law or contract or that I have any claim against the Company.
 
13.           Voluntary Agreement.  I acknowledge and state that I have entered
into this Agreement knowingly and voluntarily.
 
14.           Consulting An Attorney.  I acknowledge that the Company has told
me that I should consult an attorney of my own choice about this Agreement and
every matter that it covers before signing this Agreement.
 
15.           Obligation to Pay Attorneys’ Fees and Costs.  I understand and
agree that if I violate the release commitments I have made in this Agreement,
the Company may seek to recover any payments and/or benefits provided in
Paragraph 3 of this Agreement and that, except as provided in Paragraph 16, I
will be responsible for paying the actual attorney fees and costs incurred by
the Company in enforcing this Agreement or in defending a claim released by
Paragraph 5.
 
16.           Exception to Attorneys’ Fees Obligation.  The obligation to pay
the Company’s attorney fees and costs does not apply to an action by me
regarding the validity of this Agreement under the ADEA.
 
17.           Complete Agreement.  Except as provided in Paragraph 11, I
understand and agree that this document contains the entire agreement between me
and the Company relating to my employment and the termination of my employment,
that this Agreement supersedes and displaces any prior agreements and
discussions relating to such matters and that I may not rely on any such prior
agreements or discussions.
 
18.           Effective Date and Revocation.  This Agreement shall not be
effective until seven (7) days after I sign it and return it to the Company
representative indicated below.  During that seven-day period, I may revoke my
acceptance of this Agreement by delivering to the Company representative
indicated below a written statement indicating I wish to remove this Agreement
or not be bound by it.
 
19.           Final and Binding Effect.  I understand that if this Agreement
becomes effective it will have a final and binding effect and that by signing
and not timely revoking this Agreement I may be giving up legal rights.
 
20.           Future Cooperation.  I agree that, as of the effective date of
this Agreement, I fully and truthfully disclosed to the Company any all and
concerns that I may have had related to my employment and/or any alleged or
perceived violation by the Company, its agents or
 

 
 

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employees of the Company’s Business Code of Conduct and Ethics.  I also agree to
reasonably cooperate with the Company in the future and to provide to the
Company truthful information, testimony or affidavits requested in connection
with any matter that arose during my employment.  This cooperation may be
performed at reasonable times and places and in a manner as to not interfere
with any other employment I may have at the time of request.  The Company agrees
to reimburse me for reasonable expenses incurred in providing such cooperation,
so long as such expenses are approved in advance by the Company.
 
21.           Return of Property.  I acknowledge an obligation and agree to
return all Company property, unless otherwise specified in Paragraph 3,
above.  This includes all files, memoranda, documents, records, credit cards,
keys and key cards, I-pads, personal digital assistants, or similar instruments,
other equipment of any sort, badges, and any other property of the Company.  In
addition, I agree to provide any and all access codes or passwords necessary to
gain access to any computer, program or other equipment that belongs to the
Company or is maintained by the Company or on Company property.  Further, I
acknowledge an obligation and agree not to destroy, delete or disable any
Company property, including items, files and materials on computers and
laptops.  The Company agrees that I may retain my address book to the extent it
only contains contact information.
 
22.           Representations.  By signing this Agreement, I represent that I
have read this entire document and understand all of its terms.
 
23.           Performance Through Separation Date.  To the extent my Termination
Date is after the date on which this Agreement is given to me for my
consideration, I understand and acknowledge that my receipt of the Severance Pay
and Benefits provided in Paragraph 3 is contingent on my continued performance
of my duties and responsibilities through the Termination Date unless otherwise
requested by the Company.  Further, should I be terminated prior to the
Separation Date for Cause under my employment agreement or I should resign my
employment other than for Good Reason prior to the Termination Date, this
Agreement shall be considered null and void and of no effect, and I shall not
receive any of the Severance Pay or Benefits outlined in Paragraph  3.
 
24.           Consideration of Release.  I acknowledge that, before signing this
Agreement, I was given twenty-one (21) days within which to consider whether to
sign and accept this Agreement and that I was given seven (7) days after signing
the Agreement to revoke my acceptance of the Agreement.  I further acknowledge
that I carefully read this release and fully understand it; that I am entering
into it voluntarily; that I am receiving valuable consideration in exchange for
my execution of this release that I would not otherwise be entitled to receive;
and that I was encouraged, in writing, to discuss this release with my attorney
before signing it.  I acknowledge that if his Agreement is not signed, dated and
returned to the Company representative identified below within twenty-two (22)
days, the offer of Severance Pay and Benefits described in Paragraph 3 will no
longer be available.
 
25.           Choice of Law.  This Agreement and all matters related to this
Agreement shall be governed by Wisconsin law, without regard to any choice of
law provisions under such law.
 

 
 

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26.           Limited Severability.  If any Paragraph or provision of this
Agreement is found by a court of competent jurisdiction to be invalid or
unenforceable, in whole or in part, then those provisions will be deemed to be
modified or restricted in the manner necessary to render them valid and
enforceable, and this Agreement will be construed and enforced to the maximum
extent permitted by law, if any.
 
27.           Tax Matters.  All payments and benefits under this Agreement shall
be subject to applicable withholding as determined by the Company.  NO member of
the Company Group shall have any liability to any person for any taxes,
penalties or interest due with respect to payments and benefits provided under
this Agreement, other than with respect to applicable income and employment tax
withholding, remitting and reporting obligations.
 

This Agreement shall be interpreted, construed and operated to reflect the
intent of the Company that all aspects of the Agreement shall be either exempt
from the provisions of Code section 409A or, to the extent subject to Code
section 409A, shall comply with Code section 409A and any regulations and other
guidance thereunder.  Nothing in the Agreement shall provide a basis for any
person to take action against any member of the Company Group who acts in good
faith and in compliance with this Agreement based on matters covered by Code
section 409A, including taxes, penalties or interested imposed under Code
section 409A.

Presented By:
               
Name:
Stacey L. Neu
 
Date Delivered:
                                                   
Employee:
               
Signature:
   
Date Signed:
           
Printed Name:  John Heil
                                                       
Company:
                 
Signature:
   
Date Signed:
           
Printed Name:  Stacey L. Neu
     

 
 

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Return Signed Agreement to:

Stacey L. Neu
Spectrum Brands, Inc.
Human Resources Department
601 Rayovac Drive
Madison, WI   53711

 
 

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ANNEX A

ACCELERATION OF EQUITY AWARDS PURSUANT TO PARAGRAPH 6

Type of Award
Gross Award
Equity 2012 Award
44,444 Restricted Stock Units
2012 Bridge Award
18,519 Restricted Stock Units
Spectrum Award
14,815 Restricted Stock Units
Remainder of June 15, 2010 Grant
5,867 Restricted Stock Units

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