SEC Filings

8-K
SPECTRUM BRANDS LEGACY, INC. filed this Form 8-K on 05/01/2018
Entire Document
 

If, in the period that begins sixty (60) days prior to the occurrence of a change in control (as defined in the 2011 Plan), or in limited cases earlier, and ends upon the first anniversary of such change in control, Mr. Maura’s employment (as Executive Chairman or in all his roles) is terminated by the Company without Cause (and not due to death or Disability) or by Mr. Maura for Good Reason, then the termination will be deemed a “Change in Control Termination.”  Upon a Change in Control Termination, (i) Mr. Maura will receive all severance benefits available to him as if he terminated his employment for “Good Reason” (as described above); and (ii) all outstanding and unvested performance-based equity awards will vest in full (at the target level).

   

For purposes of the Employment Agreement, “Cause” is defined as (i) the commission by Mr. Maura of any deliberate and premeditated act taken by him in bad faith against the interests of the Company or SBI that causes or is reasonably anticipated to cause material harm to the Company or SBI; (ii) Mr. Maura being convicted of, or pleading 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 or SBI that causes or is reasonably anticipated to cause material harm to the Company or SBI; (iii) the habitual drug addiction or intoxication of Mr. Maura which negatively impacts his job performance or Mr. Maura’s failure of a Company-required drug test; (iv) the willful failure or refusal of Mr. Maura to perform his duties as set forth in the agreement or the willful failure or refusal to follow the direction of the Board that is consistent with the Employment Agreement, provided such failure or refusal continues after 30 calendar days of the receipt of written  notice from the Board of such failure or refusal; or (v) Mr. Maura materially breaches any of the terms of the Employment Agreement or any other agreement between himself and the Company or SBI and the breach is not cured within 30 calendar days after written notice from the Company or SBI.

   

In addition, for purposes of the Employment Agreement, “Good Reason” is defined as (i) any reduction, not consented to by Mr. Maura, in Mr. Maura’s Base Salary or target MIP bonus opportunity, then in effect; (ii) the relocation, not consented by Mr. Maura, of the  office at which he is principally employed as of the date of the Employment Agreement to a location more than 50 miles from such office, or the requirement by the Company that Mr. Maura be based at an location other than such office on an extended basis, except for required business travel; (iii) a substantial diminution or other substantive adverse change, not consented to by Mr. Maura, in the nature or scope of his responsibilities, authorities, powers, functions, or duties; (iv) a breach by the Company of any of its material obligations under the Employment Agreement; or (v) the failure of the Company to obtain the agreement for any successor to the Company or SBI to assume and agree to perform the Company’s obligations under the Employment Agreement.

   

Mr. Maura is bound by noncompetition provisions that restrict him from competing with the Company through a period of 18 months following the termination of his employment with the Company.  Mr. Maura also is subject to non-solicitation restrictions with respect to Company customers and employees for the same period.  Finally, Mr. Maura is subject to confidentiality provisions protecting the Company’s confidential business information from unauthorized disclosure. 

   

The foregoing description of the Employment Agreement is a summary and is qualified in its entirety by reference to the Employment Agreement, a copy of which is filed herewith  as Exhibit 10.1 to this report on Form 8-K and incorporated by reference herein.

   

Other than as described herein, Mr. Maura was not selected as Executive Chairman or CEO pursuant to any arrangement or understanding between him and any other person. There are no family relationships between Mr. Maura and any of the Company’s other directors or executive officers. Since the beginning of the Company’s last fiscal year, there has been no transaction or any currently proposed transaction, in which the Company was or is to be a participant and in which Mr. Maura or any of his immediate family members had or will have a direct or indirect material interest, required to be disclosed under Item 404(a) of Regulation S-K, except as disclosed by HRG Group, Inc. on Form S-4, in the section titled “The Merger—Interests of Spectrum’s Directors and Officers in the Merger—Ownership of HRG Common Stock” contained therein, which Form S-4 was filed with the Securities and Exchange Commission (the “SEC”) on April 10, 2018 and which section is incorporated by reference herein.



Departure of Mr. Rouvé



As noted above, on April 26, 2018, the Company announced that Andreas Rouvé, Chief Executive Officer and President and a director of the Company, had stepped down from his positions as Chief Executive Officer and President of the Company, his positions with SBI and as a member of the Board, effective April 25, 2018. 



In connection with Mr. Rouvé’s resignation, the Company, SBI and Mr. Rouvé entered into a Separation Agreement and Release (the “Separation Agreement”).  Under the terms of the Separation Agreement, Mr. Rouvé will receive the following cash separation payments:  (i) $183,750, payable over 90 days, in lieu of 90 days’ notice of termination under Mr. Rouvé’s employment agreement with the Company (the “Notice Period”); (ii) payment for accrued but unused vacation days; (iii) $1,102,750, which is equal to one and one-half times Mr. Rouvé’s annual base salary at the time of his resignation, payable over a period of 18 months following the Notice Period; (iv) $918,750, which is equal to Mr. Rouvé’s bonus at target level under the Company’s 2018 Management Incentive Plan, payable over a period of 18 months following the Notice Period; (v) the annual bonus earned, if any, by Mr. Rouvé pursuant to the Company’s 2018 Management Incentive Plan, based on actual performance results, to be paid, if at all, in a lump sum or, at the election of the Company, common stock of the Company at substantially the same time as fiscal 2018 bonuses are paid to other executives of the Company; (vi) for a period of 18 months following the Notice Period, continuation medical, dental, vision and prescription drug benefits, provided that such continuation benefits shall end earlier upon Mr. Rouvé’s becoming eligible for comparable coverage under another employer’s benefit plans; (vii) the continuance of the Company-owned life insurance benefit for Mr. Rouvé and certain German pension contributions for a period of 18 months following the Notice Period; (viii) a relocation payment of $500,000 in satisfaction of the Company’s obligation to provide relocation costs under Mr. Rouvé’s employment agreement; (ix) the use of Mr. Rouvé’s Company-subsidized leased vehicle for a period of twelve months following the Notice Period, and, after such period, the entitlement to purchase such Company-subsidized leased vehicle; (x) any earned but unpaid base salary through the date of resignation; (xi) the reimbursement of any unreimbursed business expenses; (xii) accrued benefits, to the extent vested, under all employee benefit plans in which Mr. Rouvé participated (except for any plan that provides for bonus, severance, separation pay or termination benefits); and (viii) tax preparation assistance, and if applicable, a make-whole payment equal to Mr. Rouvé’s tax liability for the foregoing benefits, to be paid, if at all, between January 1 and March 31 of the year following the year in which the foregoing benefits become includable in Mr. Rouvé’s income for tax purposes. Mr. Rouvé’s entitlement to the foregoing consideration is subject to his continuing compliance with the terms of the Separation Agreement, which includes various restrictive covenants, including covenants relating to non-competition, non-solicitation, non-disparagement and confidentiality.



Mr. Rouvé’s previously earned performance shares under the Company’s 2017 EIP Award that have not previously vested, will vest following the release by Mr. Rouvé referred to below becoming effective and irrevocable.  Mr. Rouvé will not be eligible for performance shares under the Company’s 2018 EIP or the Company’s multi-year programs. 



Mr. Rouvé has agreed to a customary release of potential claims against the Company.



The foregoing summary of the Separation Agreement is a summary and is qualified in its entirety by reference to the Separation Agreement, a copy of which is filed herewith as Exhibit 10.2 and is incorporated by reference herein.