TRANSITION EMPLOYMENT AGREEMENT

 

THIS TRANSITION EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of
the 8th day of January,  2015 (the “Effective Date”), by and between Spectrum
Brands, Inc., a Delaware corporation (the “Company”), Spectrum Brands Holdings,
Inc., a Delaware corporation (“Parent”) and David R. Lumley (the “Executive”).

 

WHEREAS, the Company, the Parent and the Executive entered into an Amended and
Restated Employment Agreement, dated as of the 11th day of August, 2010, as
amended on November 16, 2010  (collectively,the “Prior Agreement”), which by its
terms will automatically renew on April 15th of each year, unless one of the
parties thereto determines to give notice of non-renewal by January 14th of such
year; and

 

Whereas, the Executive has indicated that he wishes to retire from the
Company  and the Parent and the Company and the Parent have elected not to renew
the Prior Agreement pursuant to the existing  terms and conditions as set forth
therein;  and

 

WHEREAS, the parties have elected to terminate the Prior Agreement and enter
into this Agreement, providing for the Executive’s service through September 30,
2015 as provided herein;

 

WHEREAS, the Executive is willing and able to accept such employment on such
terms and conditions; and

 

WHEREAS, following the execution of this Agreement, the Prior Agreement will be
of no further force and effect and neither the Company, the Parent nor Executive
will have any further rights or obligations thereunder; and

 

WHEREAS, the Executive’s continued employment with the Company and the Parent is
expressly conditioned upon the agreement by the Executive to the terms and
conditions of such employment as contained in this Agreement.

 

NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein (promises that include benefits to which the Executive would not
otherwise be entitled or receive), and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Executive hereby agree as follows:

 

1.

EMPLOYMENT DUTIES AND ACCEPTANCE.  During the Term (as defined below), the
Company hereby employs the Executive, and the Executive agrees to serve and
accept employment with the  (i) Company as President and Chief Executive
Officer, and (ii) Parent as Chief Executive Officer, in both cases reporting
directly to the Board of Directors of Parent (the “Board”).  Executive shall be
fully responsible for the day to day management of the Company and Parent and
shall have the authority consistent with his positions as Chief Executive
Officer and President of similarly sized companies.  In addition, the Executive
shall support the CEO search process and reasonably assist in the transition to
a new CEO, including assistance with key constituencies of the Parent and the
Company, including the Board of Directors, the controlling shareholder of the
Parent, other shareholders and investment analysts, the Company’s management and
employees, key customers and suppliers to the Company, and the media.    The
Executive shall devote substantially all of his

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working time and efforts to such employment.  During the Term, Parent will
nominate the Executive for election to the Board.

 

2.

TERM OF EMPLOYMENT.  Subject to earlier termination of employment under Section
4 hereof, the Executive’s employment shall terminate on September 30, 2015 (the
“Term”), provided, however that the Board may extend the Term to December 31,
2015 so long as it gives Executive written notice of such extension at least
thirty (30) days  prior to September 30.  The effective date of the termination
of Executive’s employment with the Company, whether as a result of earlier
termination under Section 4 or expiration of the Term is referred to herein as
the “Termination Date.”    

 

3.

COMPENSATION.  During the Term, the Company shall pay or provide to the
Executive the following compensation and benefits, and such other compensation
as the Board may determine which the Executive agrees to accept in full
satisfaction for his services, subject to necessary withholding for payroll and
income taxes:

 

a.

Base Salary and Benefits until Termination Date.  During the Term the Executive
shall be compensated at the salary rate in effect on the Effective Date and the
Executive shall continue to be eligible to participate in the Company’s employee
benefit plans and arrangements, including driving the Company vehicle, as paid
by the Company on the Effective Date, in accordance with their terms as in
effect from time to time.    Notwithstanding the foregoing, at any time prior to
the expiration of the Term, the Company, in its sole discretion, may inform the
Executive that the Executive’s services are no longer required and place the
Executive on “garden leave” for the remainder of the Term (the “Garden Leave
Period”).  As of the commencement of the Garden Leave Period the Executive shall
be deemed to have resigned from all titles and positions the Executive holds
with the Company or Parent (or any subsidiary or affiliate thereof), unless
otherwise requested by the Board in writing. The Executive acknowledges and
agrees that upon request of the Board, the Executive shall serve as a strategic
advisor to the Chairman of the Board and the Company after the Termination Date.
 During the Garden Leave Period the Executive shall remain an employee with the
Company and the Company shall continue to provide the Executive with his base
salary, annual bonus opportunity and benefits at the same rate as in effect
immediately prior to the commencement of the Garden Leave Period, and the
Executive shall remain eligible to receive the fiscal 2015 MIP Bonus and 2015
EIP to the extent earned as provided for in sub-sections (b) and (e) of this
Section 3.  

b.

Fiscal 2015 MIP Bonus.  The Executive shall be eligible to receive a bonus for
the 2015 fiscal year, payable in arrears (the “Bonus”), calculated based upon
the achievement of performance targets established by the Board in November 2014
(the “Performance  Targets”).  If the Executive achieves 100 percent of the
Performance Targets, the Executive shall receive a Bonus in an amount that is at
least 115% of his Base Salary.  If the Executive exceeds the Performance Target,
the Bonus shall be increased in linear fashion; provided, however, the Bonus
shall not exceed 250% of Executive’s Base Salary.  The Company shall pay the
Bonus, if any, as soon as practicable following the end of the applicable fiscal
year but no later than March 15th of the year following the year in which the
Bonus is earned.

c.

Insurance Coverages.  The fringe benefits, perquisites and other benefits of
employment to be made available to the Executive shall be similar to such
benefits and perquisites as are

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generally made available to other senior executives of the Company, as such
plans are amended, modified or terminated from time to time.

d.

Existing Stock-Based Awards.  All restricted stock unit (RSU) awards previously
granted to the Executive shall remain in full force and effect in accordance
with their terms.

e.

Fiscal 2015 EIP Award.  As soon as practicable following the date hereof, the
Executive shall receive a grant of RSUs having an aggregate value of $5,000,000
on the date of grant under the Equity Incentive Plan for fiscal year 2015, which
shall be earned upon the achievement of the Adjusted EBITDA performance target
of $760 million for fiscal year 2015. The RSUs, to the extent earned shall vest
50% on September 30, 3016 and 50% on September 30, 2017 and shall be otherwise
governed by the 2015 EIP award agreement for Executive, provided, however, that
the RSUs will be deemed non-forfeitable upon the Termination Date so long as the
performance target has been achieved and (i) the Executive does not voluntarily
terminate his employment prior to September 30, 2015  or (ii) the Executive’s
employment is not terminated for Cause. 

f.

 Vacation.  The Executive shall be entitled to four (4) weeks of vacation each
year.

g.

Other Expenses.  The Executive shall be entitled to reimbursement of all
reasonable and documented expenses actually incurred or paid by the Executive in
the performance of the Executive’s duties under this Agreement, upon
presentation of expense statements, vouchers or other supporting information in
accordance with Company policy.  All expense reimbursements and other
perquisites of the Executive are reviewable periodically by the Compensation
Committee of the Board.

h.

Vehicle.  Pursuant to the Company’s policy for use of vehicles by executives,
Executive shall be provided the use of a leased vehicle.  Unless the Executive’s
employment is terminated by the Company for Cause pursuant to Section 4(a) or by
the Executive voluntarily pursuant to Section 4(d), Executive shall be permitted
to drive his Company vehicle for the duration of the 12-month period following
termination; at the end of such 12-month period, Executive will be permitted to
purchase his Company vehicle at the Company’s book value of the vehicle as of
such date.

i.

D&O Insurance.  The Executive shall be entitled to indemnification from the
Company and Parent to the maximum extent provided by law, but not for any
action, suit, arbitration or other proceeding (or portion thereof) initiated by
the Executive, unless authorized or ratified by the Board.  Such indemnification
shall be covered by the terms of the Company’s policy of insurance for directors
and officers in effect from time to time (the “D&O Insurance”). After the
Commencement Date, neither the Company nor Parent will amend its articles of
incorporation or its by-laws in a manner that would adversely affect Executive’s
indemnification rights as they existed on the Commencement Date.  Copies of the
Company’s and the Parent’s charter, by-laws and D&O Insurance will be made
available to the Executive upon request.

j.

Legal Fees.  The Company shall pay the Executive’s actual and reasonable legal
fees incurred in connection with the preparation and negotiation of this
Agreement.

 

k.

Retention Payments.  As a retention bonus for entering into this Agreement and
the Executive performing his obligations hereunder, the Company shall pay to the
Executive an amount in cash equal to double the sum of (i) the Executive’s Base
Salary at the rate then in effect, and (ii) the target annual Bonus established
pursuant to any annual bonus or annual

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incentive plan maintained by the Company in respect of the fiscal year ending
immediately prior to the fiscal year in which the Termination Date occurs (the
“Retention Bonus”).  The Retention Bonus shall be paid to the Executive ratably
monthly over the 24-month period commencing on the sixtieth (60th) day following
the Termination Date, subject to Section 11.   In addition, the Company shall
pay the Executive (A) $25,000 on the first anniversary of the Termination Date,
and (B) $75,000 in a lump sum on the 60th day following the Termination Date.  
 Payment of the amounts pursuant to this Section 3(k) is subject to Executive’s
execution without revocation of a separation agreement with a release of claims
agreeable to the Company (to the extent that the Executive is physically and
mentally capable to execute such an agreement (the “Release”), and provided the
Release is effective and irrevocable within sixty (60) days following the
Termination Date.  The Executive shall be entitled to receive the payments
provided for in this Section 3(k) regardless of the reason of the termination of
Executive’s employment.    The Executive expressly acknowledges and agrees that
Executive is not entitled to receive any severance or separation pay, whether
pursuant to the Prior Agreement or this Agreement.

 

l.

Transition Success Bonus.  If the Executive performs his duties and
responsibilities in a satisfactory manner (including assisting in the CEO search
process and the transition of his duties to the new CEO) through the period up
to the Termination Date, as determined by the Chairman of the Board, then the
Board in its sole discretion may determine to pay or provide the Executive a
transition bonus within thirty days after the Termination Date in an amount and
form of consideration as so determined by the Board.

 

m.

 No Eligibility for Spectrum $2B Program.  For the avoidance of doubt, Executive
will not be eligible to participate in the Spectrum $2B program, nor will he be
eligible to participate in the 2016 MIP or EIP award programs.

 

4.

TERMINATION.

 

a.

Termination by the Company with Cause.  The Company shall have the right at any
time to terminate the Executive’s employment hereunder upon written notice upon
the occurrence of any of the following (any such termination being referred to
as termination for “Cause”):

i.

the commission by the Executive of any deliberate and premeditated act taken by
the Executive in bad faith against the interests of the Company which causes, or
is reasonably anticipated to cause, material harm to the Company or its
reputation;

ii.

the Executive has been convicted of, or pleads nolo contendere with respect to
any felony, or of any lesser crime or offense having as its predicate element
fraud, dishonesty or misappropriation of the property of the Company that
causes, or is reasonably anticipated to cause, material harm to the Company;

iii.

the habitual drug addiction of the Executive, or habitual intoxication of the
Executive, which negatively impacts his job performance, or the Executive’s
failure of a company-required drug test;

iv.

the willful failure or refusal of the Executive to (A) perform his duties as set
forth herein or (B) follow the direction of the Board, provided the failure or
refusal continues after fifteen (15) days of the receipt of notice in writing
from the Board of

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the failure or refusal, which notice refers to this Section 4(a) and states the
Company’s intent to terminate the Executive’s employment hereunder if such
failure or refusal is not remedied within such fifteen (15) day period; or

v.

the Executive materially breaches any of the terms of this Agreement or any
other material written agreement between the Executive and the Company which
breach is not cured within thirty (30) days subsequent to notice from the
company to the Executive of such breach, which notice refers to this Section
4(a) and states the Company’s intent to terminate the Executive’s employment
hereunder if such breach is not cured within such thirty (30) day period.

 

If a definition of termination for “Cause” set forth above conflicts with such
definition in the Executive’s time based or performance based stock option or
restricted stock agreements (collectively, the “Stock Agreements”), or any
agreements referred to therein, the definition set forth herein shall control.

 

b.

Termination by Company for Death or Disability.  The Company shall have the
right at any time to terminate the Executive’s employment hereunder upon thirty
(30) days prior written notice upon the Executive’s inability to perform his
duties hereunder by reason of any mental, physical or other Disability for a
period of at least six (6) consecutive months (for purposes hereof, “Disability”
has the same meaning as in the Company’s disability policy), if within 30 days
after such notice of termination is given, the Executive shall not have returned
to the full-time performance of his duties.  The Company’s obligations hereunder
shall, subject to the provisions of Section 5(b), also terminate upon the death
of the Executive.

c.

Termination by Company without Cause.  The Company shall have the right at any
time to terminate the Executive’s employment for any other reason without Cause
upon sixty (60) days prior written notice to the Executive, provided, however,
that the Company may, in its discretion, pay the Executive 60 days’ Base Salary
in lieu of such notice and; provided, further, that any unvested RSUs continue
to vest in accordance with their terms through the end of such 60-day period,
Executive shall be deemed to be employed for such period for all benefit
purposes including the Bonus, and coverage under the Company welfare benefit
plans shall continue for such period.

d.

Voluntary Termination by Executive.  The Executive shall be entitled to
voluntarily terminate his employment (without Good Reason) upon sixty (60) days
prior written notice to the Company.  Any such termination shall be treated as a
termination by the Company for “Cause” under Section 5(a).

e.

Termination by the Executive for Good Reason.  The Executive shall be entitled
to terminate his employment and appointment hereunder, upon the occurrence of a
Good Reason.  Any such termination shall be treated as a termination by the
Company without Cause.  For this purpose, a “Good Reason” shall mean:

i.

any reduction, not consented to by the Executive in a signed writing, in the
Executive’s Base Salary or target annual bonus opportunity then in effect;

ii.

the relocation, not consented to by the Executive, of the Company’s office at
which the Executive is principally employed as of the date hereof to a location
more than seventy-five (75) miles from such office, or the requirement by the
Company that the Executive be based at an office other than the Company’s office
on an extended basis,

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except for required travel on the Company’s business to an extent substantially
consistent with the Executive’s business travel obligations;

iii.

a substantial diminution or other substantive adverse change, not consented to
by the Executive in a signed writing, in the nature or scope of the Executive’s
responsibilities, authorities, powers, functions or duties; provided, however,
the Executive shall not be entitled to resign for Good Reason in the event that
the diminution or other substantive adverse change in the nature or scope of
the  Executive’s responsibilities, authorities, powers, functions or duties (x)
is related to the Executive being placed on garden leave or (y)  is related to
the Company’s search for or hiring of a new Chief Executive Officer or
the  related transition to a new Chief Executive Officer ; or

iv.

a breach by the Company of any of its other material obligations under this
Agreement;

 

provided, however, that in each case, the Executive may not terminate his
employment for Good Reason unless the Executive (A) provides the Company with 30
days advance written notice of his intent to resign for Good Reason, (B) such
notice is given within 60 days of the events or circumstances claimed to give
rise to Good Reason, (C) the Company fails to cure such alleged violation during
such 30 day period and (D) if the Company fails to cure such alleged violation,
the Executive must terminate his employment within six months of the initial
occurrence of the facts or circumstances giving rise to Good Reason.

 

For purposes of any stock option agreements or restricted stock award
agreements, termination for Good Reason shall be treated as a termination of
employment by the Company without “Cause.”

 

f.

Notice of Termination.  Any termination (except due to death of the Executive)
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 8.  For purposes of this Agreement, a “Notice of
Termination” means a written notice given prior to the termination which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
sets 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 and (iii) if the termination date is other than the date of receipt of
such notice, specifies the termination date of this Agreement (which date shall
be not more than fifteen (15) days after the giving of such notice, unless a
longer notice is required pursuant to another section of this Agreement).  The
failure by the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Cause shall not waive any right
of the Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing its rights under this Agreement.

g.

Upon termination of the Executive’s employment with the Company, unless the
Company requests otherwise, the Executive shall be deemed to have resigned,
effective immediately, from all directorships and other positions he held with
the Company and its affiliates (including, without limitation, Parent) and the
Executive shall execute any documents reasonably required to effectuate the
foregoing.

 

5.

EFFECT OF TERMINATION OF EMPLOYMENT.

 

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a.

Termination by the Company with Cause or Voluntarily by the Executive.  If the
Executive’s employment hereunder is terminated by the Company with Cause or if
the Executive voluntarily terminates his employment hereunder (except for Good
Reason), the Executive’s salary and other benefits specified in Section 3 shall
cease at the time of such termination, and the Executive shall not be entitled
to any compensation specified in Section 3 (except as set forth in Section 3(k))
which was not required to be paid prior to such termination.  The Company shall
promptly pay to the Executive accrued salary and vacation pay, reimbursement for
expenses incurred through the date of termination in accordance with Company
policy, and accrued benefits through the Company’s benefit plans, programs and
arrangements, and the amounts set forth in Section 3(k) (as provided for and at
the times set forth in Section 3(k)) subject to the Executive’s executing the
Release (the “Accrued Obligations”).  The Executive shall be entitled to
continue to participate in the Company’s medical benefit plans to the extent
required by law.

b.

 Without Cause or for Good Reason, Death or Disability.  If the Executive’s
employment hereunder is (a) terminated by the Company without Cause, (b) by
Executive for Good Reason or (c) by reason of death or by the Company for
Disability, the Company shall pay or provide the Accrued Obligations and, if the
Executive executes without revocation the Release and the Release is effective
and irrevocable on or before the date that is sixty (60) days following the
Termination Date:

i.

For the 24-month period immediately following the Termination Date, the Company
shall arrange to provide the Executive and his dependents the additional
benefits specified in Section 3(c) (other than the healthcare coverage)
substantially similar to those provided to the Executive and his dependents by
the Company immediately prior to the Termination Date, at no greater cost to the
Executive or the Company than the cost to the Executive and the Company
immediately prior to such date.  Benefits receivable by the Executive pursuant
to this Section 5(b)(ii) shall be reduced to the extent benefits of the same
type are received by or made available to the Executive during the 24-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.  Benefits
receivable by the Executive pursuant to this Section 5(b) shall cease
immediately upon the discovery by the Company of the Executive’s breach of the
covenants contained in Section 6 or 7 hereof.

ii.

The Executive shall remain eligible to receive the fiscal 2015 MIP Bonus and
fiscal 2015 EIP to the extent earned as provided for in sub-sections (b) and (e)
of Section 3.  The 2015 MIP will be paid it would have been paid had Executive
remained employed with the Company on the payment date, and the 2015 RSUs will
be treated as set forth in Section 3(e).

iii.

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 5, and there shall be no reduction or offset of such payments
following Executive’s obtaining other employment.

c.

Except as set forth in Section 3, the Executive’s salary and other benefits
specified in Section 3 shall cease at the time of termination, and the Executive
shall not be entitled

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to any compensation specified in Section 3 which was not required to be paid
prior to the termination and the Executive will not be entitled to receive any
other severance or separation pay.

 

6.

AGREEMENT NOT TO COMPETE.

 

a.

The Executive agrees that during his employment and for the two-year period
immediately following the termination of his employment for any reason
(hereafter, the “Non-Competition Period”), he will not, directly or indirectly,
either separately, jointly or in association with others, as an officer,
director, consultant, agent, employee, owner, principal, partner or stockholder
of any business, provide services of the same or similar kind or nature that he
provides to the Company to, or have a financial interest in (excepting only the
ownership of not more than 5% of the outstanding securities of any class listed
on a national securities exchange or the NASDAQ Stock Market), any competitor of
the Company (which means any person or organization that is in the business of
or makes money from designing, developing, or selling products or services
similar to those products and services developed, designed or sold by the
Company); provided, however, that the Executive may provide services to or have
a financial interest in a business that competes with the Company if his
employment or financial interest is with a separately managed or operated
division or affiliate of such business that does not compete with the
Company.  The Executive recognizes, acknowledges and agrees that his duties and
responsibilities hereunder will be performed throughout the United States and
Canada and Europe and Asia and Latin America and will result in Executive’s
having material contact with the Company’s customers, suppliers, vendors, and
employees throughout the United States and Canada and Europe and Asia and Latin
America.  Accordingly, the Parties acknowledge and agree that the restrictions
set forth in this Section 6(a) shall extend to the United States and Canada and
Europe and Asia and Latin America (hereafter, the “Restricted Territory”) and
that this geographic scope is reasonable based on the geographic scope of
Executive’s duties and responsibilities.

b.

Without limiting the generality of clause (a) above, the Executive further
agrees that, during the Non-Competition Period, he will not, within the
Restricted Territory, directly or indirectly, either separately, jointly or in
association with others, solicit, divert, take away, or attempt to solicit,
divert, or take away, any customer or person with whom the Company has a written
sales or servicing contract in connection with the business of the Company (a
“Current Customer”), or any customer or person to whom the Company has sent a
written sales or servicing proposal or contract in connection with the business
of the Company within the immediately preceding two-year period (a “Prospective
Customer”), for the purpose of or with the intention of selling or providing to
such Current Customer or Prospective Customer any product or service similar to
any product or service sold, provided, offered, or under development by the
Company during the two-year period immediately preceding the termination of
Executive’s employment for any reason (or during the preceding two years if
during Executive’s employment); provided, however, that this restriction shall
only apply to Current Customers or Prospective Customers of the Company with
whom Executive had contact or about whom the Executive acquired confidential
information by virtue of his employment with the Company at any time during such
two-year period.

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c.

The Executive agrees that during the Non-Competition Period, he shall not (i)
contact in order to induce, solicit or encourage any person to leave the
Company’s employ; and (ii) hire any person who is an employee or consultant
under contract with the Company or who was an employee or consultant within the
six month period preceding such activity, without the Company’s written
consent.  Nothing in this paragraph is meant to prohibit an employee of the
Company that is not a party to this Agreement from becoming employed by another
organization or person.

d.

The Non-Competition Period shall be tolled by and automatically extended by the
length of a breach by the Executive.

e.

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 hereto to revise the
foregoing restrictions to include the maximum restrictions allowed under the
applicable law.  Sections 6(a), 6(b), and 6(c) each are intended to be
considered and construed as separate and independent covenants; any ruling that
any one or more of these sections is overbroad or otherwise invalid shall not
affect the validity of any of the other sections or any other section of this
Agreement.

f.

For purposes of this Section 6 and Section 7, the “Company” refers to the
Company and any incorporated or unincorporated affiliates of the Company
(including, without limitation, Parent).

 

7.

SECRET PROCESSES AND CONFIDENTIAL INFORMATION.

 

a.

The Executive agrees to 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 and 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 7(a),
confidential information or materials shall include, but are not limited to,
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 (hereafter
“Confidential Information”).  The restriction on the Executive’s use or
disclosure of Confidential Information shall remain in force during the
Executive’s employment hereunder and until the earlier of (x) the expiration of
a period of seven (7) years thereafter or (y) such time as the Confidential
Information is of general knowledge in the industry through no fault of the
Executive or any agent of the Executive.  The Executive also agrees to return to
the Company promptly upon its request any Company information or materials in
the Executive’s possession or under the Executive’s control.  This Section 7(a)
is not intended to preclude Executive from being gainfully employed by
another.  Rather, it is intended to prohibit Executive from using the Company’s
confidential information or materials in any subsequent employment or employment
undertaken that is not for the benefit of the Company during the identified
period.

b.

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

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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 the 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 for
hire” as that term is defined in the U.S. Copyright Law.  The Company shall be
the sole owner of all domestic and foreign rights and interests in the
Inventions.  The Executive agrees to assist the Company at the Company’s expense
to obtain and from time to time enforce patents and copyrights on the
Inventions.

c.

Upon the request of, and, in any event, upon termination of the Executive’s
employment with the Company for any reason, 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.  Subject only to the Executive’s duty to hold in strict
confidence all Confidential Information of the Company and its affiliates and
his other obligations under this Agreement, nothing in this Agreement or
elsewhere shall prevent the Executive from retaining copies of his desk
calendars, address book and rolodex.

d.

Nothing in this Section 7 diminishes or limits any protection granted by law to
trade secrets or relieves the Executive of any duty not to disclose, use or
misappropriate any information that is a trade secret for as long as such
information remains a trade secret.

 

8.

NONDISPARAGEMENT. The Executive hereby agrees not to defame or disparage the
Company, its affiliates (including, without limitation, Parent) and their
respective officers, directors, members or employees.  The Executive hereby
agrees to cooperate with the Company and its affiliates, upon reasonable
request, in refuting any defamatory or disparaging remarks by any third party
made in respect of the Company or its affiliates or their directors, members,
officers or employees.

 

9.

NOTICES.  All notices or other communications hereunder 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.  The
addresses for such notices shall be as follows:

 

a.

For notices and communications to the Company and Parent:

 

Spectrum Brands, Inc.

601 Rayovac Drive

Madison, WI 53711

Facsimile: (608) 278-6363

Attention: General Counsel

 

With a copy to:

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Reuven Falik, Esq.

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY  10019-6064

Facsimile: (212) 492-0399

 

b.

For notices and communications to the Executive: at the address below as updated
at the request of the Executive from time to time:

 

David R. Lumley

4830 Morris Court

Waunakee, Wisconsin  53597

 

With a copy to:

Andrew J. Bernstein, Esq.

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

The Chrysler Center

666 Third Avenue

New York, New York  10017

Facsimile: (212) 983-3115

 

Any party hereto may, by notice to the other, change its address for receipt of
notices hereunder.

 

10.

GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; SERVICE OF
PROCESS.

 

a.

Any controversy or claim arising out of or relating to this Agreement or the
breach thereof or otherwise arising out of the Executive’s employment or the
termination of that employment (including, without limitation, any claims of
unlawful employment discrimination whether based on age or otherwise) other than
Section 6 or 7 shall, to the fullest extent permitted by law, be settled by
binding confidential arbitration by a panel of three arbitrators (the “Panel”)
under the auspices of the American Arbitration Association (“AAA”) in New York
City, New York in accordance with the Employment Dispute Resolution Rules of the
AAA, including, but not limited to, the rules and procedures applicable to the
selection of arbitrators. The Executive and the Company (the “Parties”) hereby
agree that the Panel (i) shall construe, interpret and enforce this Agreement in
accordance with its express terms, and otherwise in accordance with the
governing law as set forth in Section 12 and (ii) shall have no authority to
award any punitive or exemplary damages and waive, to the full extent permitted
by law any right to recover such damages in arbitration  Judgment may be entered
on the arbitration award in any court having jurisdiction.    Within 20 days of
the conclusion of the arbitration hearing, the Panel shall prepare written
findings of fact and conclusions of law.  Any arbitration costs and expenses
that are unique to arbitration or are in excess of the costs of filing the same
claim in a court of competent jurisdiction shall be borne by the Company.  Each
party shall bear its own attorneys’ fees and costs.  THE PARTIES EXPRESSLY WAIVE
THEIR RIGHT TO A JURY TRIAL.

b.

With respect to any controversy, claim or dispute under Section 6 or 7 of this
Agreement, the Parties each hereby irrevocably submits to the exclusive
jurisdiction of any court of the

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United States located in the State of Delaware or in a State Court in
Delaware  Except as otherwise specifically provided in this Agreement, the
Parties undertake not to commence any suit, action or proceeding based on any
dispute between them that arises out of or relates to Section 6 or 7 of
Agreement in a forum other than a forum described in this Section 10 provided,
however, that nothing herein shall preclude either Party from bringing any suit,
action or proceeding in any other court for the purposes of enforcing the
provisions of this Section 10 or enforcing any judgment obtained by the
Company.  The agreement of the Parties to the forum described in this Section 10
is independent of the law that may be applied in any suit, action, or
proceeding, and the Parties agree to such forum even if such forum may under
applicable law choose to apply non-forum law.  The Parties waive, to the fullest
extent permitted by applicable law, any objection which they now or hereafter
have to personal jurisdiction or to the laying of venue of any such suit, action
or proceeding brought in an applicable court described in Section 10, and the
Parties agree that they shall not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court.  The
Parties agree that, to the fullest extent permitted by applicable law, a final
and non-appealable judgment in any suit, action or proceeding brought in any
applicable court described in Section 10 shall be conclusive and binding upon
the Parties and may be enforced in any other jurisdiction.

c.

THE PARTIES EXPRESSLY AND KNOWINGLY WAIVE ANY RIGHT TO A JURY TRIAL. Each of the
Parties hereto agrees that this Agreement involves at least $100,000 and that
this Agreement has been entered into in express reliance on Section 2708 of
Title 6 of the Delaware Code.  Each of the Parties hereto irrevocably and
unconditionally agrees (i) that service of process may be made on such Party by
mailing copies of such process to such Party at such Party’s address as
specified in Section 10 that service made pursuant to clause (i) above shall, to
the fullest extent permitted by applicable law, have the same legal force and
effect as if served upon such Party personally within the State of Delaware.

   

11.

SECTION 409A.

 

a.

This Agreement is intended to satisfy the requirements of Section 409A of the
Code (“Section 409A”) with respect to amounts, if any, subject thereto and shall
be interpreted and construed and shall be performed by the parties consistent
with such intent.  This Agreement may be amended at any time, without the
consent of the Executive, to avoid the application of Section 409A in a
particular circumstance or to satisfy any of the requirements under Section
409A.  Notwithstanding the foregoing, the Executive shall be solely responsible
and liable for the satisfaction of all taxes and penalties that may be imposed
on or for the account of the Executive in connection with payments and benefits
provided in accordance with the terms of this Agreement (including any taxes and
penalties under Section 409A of the Code), and neither the Company nor any of
its affiliates shall have any obligation to indemnify or otherwise hold the
Executive (or any beneficiary) harmless from any or all of such taxes or
penalties.

b.

Notwithstanding anything in this Agreement to the contrary, the following
special rule shall apply, if and to the extent required by Section 409A, in the
event that (i) the Executive is deemed to be a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i), (ii) amounts or benefits under this
Agreement or any other program, plan or arrangement of the Company or a
controlled group affiliate thereof are due or

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payable on account of “separation from service” within the meaning of Treasury
Regulations Section 1.409A-1(h) and (iii) the Executive is employed by a public
company or a controlled group affiliate thereof:  no payments hereunder that are
“deferred compensation” subject to Section 409A shall be made to the Executive
prior to the date that is six (6) months after the date of the
Executive’s separation from service or, if earlier, the Executive’s date of
death; following any applicable six (6) month delay, all such delayed payments
will be paid in a single lump sum on the earliest permissible payment date.

c.

Any payment or benefit due upon a termination of the Executive’s employment that
represents a “deferral of compensation” within the meaning of Section 409A shall
be paid or provided to the Executive only upon a “separation from service” as
defined in Treas.  Reg.  § 1.409A-1(h).  Each payment made under this Agreement
shall be deemed to be a separate payment for purposes of Section 409A.  Amounts
payable under this Agreement shall be deemed not to be a “deferral of
compensation” subject to Section 409A to the extent provided in the exceptions
in Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9)
(“separation pay plans,” including the exception under subparagraph (iii)) and
other applicable provisions of Treasury Regulation § 1.409A-1 through A-6.  For
the avoidance of doubt, to the extent that the termination of the Executive’s
employment does not constitute a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of
further services that are reasonably anticipated to be provided by the Executive
to the Company at the time the Executive’s employment terminates under Section
4), any benefits payable under Sections 5(b) or (c) that constitute deferred
compensation under Section 409A of the Code shall be delayed until after the
date of a subsequent event constituting a separation of service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h).  For purposes of
clarification, this shall not cause any forfeiture of benefits on the
Executive’s part, but shall only act as a delay until such time as a “separation
from service” occurs.

d.

Notwithstanding anything to the contrary in Agreement, 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 the 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 the 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 the 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 the Executive
incurred such indemnification payment or expenses, and in no event shall any
right to indemnification payment or

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reimbursement or the provision of any in-kind benefit be subject to liquidation
or exchange for another benefit.

 

12.

GENERAL.

 

a.

Governing Law.  This Agreement shall be construed under and governed by the laws
of the State of Delaware, without reference to its conflicts of law principles.

b.

Amendment; Waiver.  This Agreement may be amended, modified, superseded,
canceled, renewed or extended, 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.

c.

Successors and Assigns.  This Agreement shall be binding upon the Executive,
without regard to the duration of his employment by the Company or reasons for
the cessation of such employment, and inure to the benefit of his
administrators, executors, heirs and assigns, although the obligations of the
Executive are personal and may be performed only by him.  This Agreement shall
also be binding upon and inure to the benefit of the Company and its
subsidiaries, successors and assigns, including any corporation with which or
into which the Company or its successors may be merged or which may succeed to
their assets or business.

d.

Counterparts.  This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same instrument.  Signatures delivered by facsimile (including by “pdf”) shall
be deemed effective for all purposes.

e.

Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation during his employment hereunder
in any benefit, bonus, incentive or other plan or program provided by the
Company or any of its affiliates and for which the Executive may qualify (except
for any severance plan, program, or policy).  Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any plan or
program of the Company or any affiliated company at or subsequent to the date of
the Executive’s termination of employment with the Company shall, subject to the
terms hereof or any other agreement entered into by the Company and the
Executive on or subsequent to the date hereof, be payable in accordance with
such plan or program.

f.

Mitigation.  In no event shall the Executive be obligated to seek other
employment by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement.

g.

Equitable Relief.  The Executive expressly agrees that breach of any provision
of Sections 6 or 7 of this Agreement would result in irreparable injuries to the
Company, that the remedy at law for any such breach will be inadequate and that
upon breach of

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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.

h.

Severability.  Sections 6(a), 6(b), 6(c), 7(a), 7(b) and 9(f) and (g) of this
Agreement shall be considered separate and independent from each other and from
the other sections of this Agreement and no invalidity of any one of those
sections shall affect any other section or provision of this
Agreement.  However, because it is expressly acknowledged that the pay and
benefits provided under this Agreement are provided, at least in part, as
consideration for the obligations imposed upon Executive under Sections 6(a),
6(b), 6(c), 7(a) and 7(b), should Executive challenge those obligations or any
court determine that any of the provisions under these Sections is unlawful or
unenforceable, such that Executive need not honor those provisions, then
Executive shall not receive the pay and benefits, provided for in this Agreement
following termination, (or if he has already received the Retention Bonus or
benefits, Executive shall be required to repay such Retention Bonus and benefits
to the Company within 10 days of written demand by the Company)  if otherwise
available to Executive, irrespective of the reason for the end of Executive’s
employment. Except as set forth in the preceding two sentences, if any provision
of this Agreement or the application thereof is held invalid, the invalidity
shall not affect other provisions or applications of this Agreement which can be
given effect without the invalid provisions or applications and to this end the
provisions of this Agreement are declared to be severable.

i.

Entire Agreement.  This Agreement and the schedule hereto constitute the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior negotiations, discussions, writings and agreements
between them with respect to the subject matter hereof, including without
limitation, the Prior Agreement and the term sheet dated on or around January 7,
2015.

j.

No Construction Against Drafter.  The Parties acknowledge and agree that each
Party has reviewed and negotiated the terms and provisions of this Agreement and
has had the opportunity to contribute to its revision.  Accordingly, the rule of
construction to the effect that ambiguities are resolved against the drafting
party shall not be employed in the interpretation of this Agreement.  Rather,
the terms of this Agreement shall be construed fairly as to both Parties and not
in favor or against either Party.

k.

Assignment.  This Agreement is binding on and is for the benefit of the Parties
hereto and their respective successors, assigns, heirs, executors,
administrators and other legal representatives.  This Agreement is personal to
the Executive.  Neither this Agreement nor any right or obligation hereunder may
be assigned by the Executive, without the prior written consent of the Company
or except by will or the laws of descent and distribution, and any purported
assignment in violation of this Section 12(k) shall be void.

l.

 Tax Withholding.  The Company or its affiliates may withhold from any amounts
payable to the Executive hereunder all federal, state, city, foreign or other
taxes that the Company may reasonably determine are required to be withheld
pursuant to any applicable law or regulation (it being understood that the
Executive shall be responsible for payment of all taxes in respect of the
payments and benefits provided herein).

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m.

 Headings.  The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning of
any provision hereof.

 

[signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

 

 

 

 

 

SPECTRUM BRANDS, INC.

 

  

 

 

 

Nathan E. Fagre

 

Senior Vice President, General Counsel,

 

and Secretary

 

 

 

SPECTRUM BRANDS HOLDINGS, INC. 

 

 

 

 

 

Nathan E. Fagre

 

Senior Vice President, General Counsel,

 

and Secretary 

 

 

 

EXECUTIVE

 

 

 

 

 

David R. Lumley

 

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