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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On September 9, 2019, Spectrum Brands
Holdings, Inc. (the “Company”) and Spectrum Brands Inc. entered into a Separation Agreement with Douglas L.
Martin, the Chief Financial Officer of the Company (the “Martin Separation Agreement”). Pursuant to the Martin
Separation Agreement, Mr. Martin’s employment with the Company and all of its subsidiaries and affiliates will end on
December 20, 2019 or such earlier date as determined by the Company (the “Martin Separation Date”). Mr. Martin
will continue to receive his compensation and benefits through the Martin Separation Date. Subject to Mr. Martin
executing an effective and irrevocable release of claims, Mr. Martin will receive as severance eighteen (18) months base
salary ($825,000) and one times his annual bonus of $495,000, in each case payable over an 18 month period.
In addition, Mr. Martin will be eligible for a pro rata bonus for fiscal 2020 based on actual performance for fiscal 2020,
but he will not receive any equity awards for fiscal 2020. Mr. Martin will also continue to receive health
insurance benefits during the 18 month severance period and will be permitted to purchase his Company leased vehicle for which he will
be reimbursed up to $85,000. In addition, the Company will transfer his life insurance policy to Mr. Martin. Mr.
Martin’s long term equity-based award shall be forfeited without payment and his bridge award shall be payable pro rata
in accordance with the terms of his agreement (and any performance award component of the bridge award shall be paid only to
the extent performance is achieved). Mr. Martin will be subject to post-employment restrictive covenants including an
18-month noncompete as well as nondisparagement and other post employment provisions. The above summary is not complete
and is qualified in its entirety by the Martin Separation Agreement, a copy of which is attached hereto as Exhibit 10.1
and is incorporated herein by reference.
On
September 9, 2019, the Company entered into an employment agreement with Jeremy W. Smeltser (the “Smeltser
Employment Agreement”). Pursuant to the Smeltser Employment Agreement, Mr. Smeltser will become an employee of the
Company with the title of Executive Vice President on October 1, 2019. Mr. Smeltser will become Executive Vice President and
Chief Financial Officer of the Company on December 20, 2019 or such earlier date as determined by the Company. Pursuant to
the Smeltser Employment Agreement, Mr. Smeltser will receive an annual base salary of $500,000, and commencing with fiscal
2020, he will have a target annual bonus of 80% and a maximum bonus of 160% of annual base salary. On or prior to
December 31, 2019, Mr. Smeltser will receive an equity or equity based award which will vest based on time and
performance, with a grant date value of $1,000,000. Commencing with fiscal 2021, Mr. Smeltser will receive an equity or
equity based award with a grant date value equal to 200% of his base salary. Mr. Smeltser will receive relocation
reimbursement of up to $75,000 as well as the use of a Company funded apartment for up to 12 months. In addition, Mr.
Smeltser will be eligible to participate in the Company’s benefits programs. If Mr. Smeltser’s employment is
terminated by the Company without cause or he resigns for good reason or as a result of death or disability, then he will
receive as severance pay one and a half times his annual base salary plus one times his annual bonus payable over an 18 month
period, a pro rata bonus for the year of termination based on actual performance, 18 months continued medical coverage
subject to his election of COBRA and pro rata vesting of any time based equity award and any performance based awards shall
be forfeited. The receipt of severance benefits is conditioned upon his execution of an effective and irrevocable release of
claims as well as continued compliance with his post employment restrictive covenants including 18 month noncompete and
nondisparagement provisions. The above summary is not complete and is qualified in its entirety by the Smeltser Employment
Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Mr.
Smeltser, 44, previously served as Vice President and Chief Financial Officer of SPX Flow, Inc. (“SPX
Flow”). Prior to his role at SPX Flow, he served as Vice President and Chief Financial Officer of SPX Corporation,
where he served in various roles, including as Vice President and Chief Financial Officer, Flow Technology, and became an
officer of SPX Corporation in April 2009. Mr. Smeltser joined SPX Corporation in 2002 from Ernst & Young LLP, where he
was an audit manager in Tampa, Florida. Prior to that, he held various positions with Arthur Andersen LLP, in Tampa, Florida,
and Chicago, Illinois, focused primarily on assurance services for global manufacturing clients. Mr. Smeltser earned a
Bachelor of Science degree in Accounting from Northern Illinois University.
On
September 9, 2019, the Company promoted Randal D. Lewis, the Company’s Chief Operating Officer (the “Lewis
Employment Agreement”), to the office of Executive Vice President. Pursuant to the Lewis Employment Agreement, Mr.
Lewis will be employed as an Executive Vice President and Chief Operating Officer of the Company as of September 9, 2019 and
his base salary shall be increased from $450,000 to $550,000 per annum, pro-rated for fiscal 2019. For fiscal 2020, Mr.
Lewis’s target bonus will be 90% (increased from 80% for fiscal 2019) of his annual base salary with a maximum bonus of
180% of base salary. On or prior to December 31, 2019, Mr. Lewis will receive an equity or equity based award which
will vest based on time and performance, with a grant date value of $2,200,000. Commencing with fiscal 2021, Mr. Lewis will
receive an equity or equity based award with a grant date value equal to 400% of his base salary which will vest based on
time and performance.
Mr. Lewis will be eligible to participate
in the Company’s benefits programs. If Mr. Lewis’s employment is terminated by the Company without cause or
he resigns for good reason or as a result of death or disability, then he will receive as severance pay one and a half times
his annual base salary plus one times his annual bonus payable over an 18 month period, a pro rata bonus for the year of
termination based on actual performance, 18 months continued medical coverage subject to his election of COBRA and pro rata
vesting of any time based equity award and any performance based awards shall be forfeited. The receipt of severance benefits
is conditioned upon his execution of an effective and irrevocable release of claims as well as continued compliance with
his post employment restrictive covenants including 18 month noncompete and nondisparagement provisions. This Lewis
Employment Agreement supersedes Mr. Lewis’s prior Severance Agreement dated as of February 1, 2016 and his letter
agreement dated October 23, 2018. The above summary is not complete and is qualified in its entirety by the Lewis Employment
Agreement, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
On September 9, 2019, the Company entered into
a letter agreement (the “Long Letter Agreement”) and a Severance Agreement (the “Long Severance
Agreement”) with Rebeckah Long. Pursuant to the Long Letter Agreement, effective as of September 9, 2019, Ms.
Long will be promoted to Senior Vice President, Global Human Resources for the Company. Effective as of September 9, 2019,
Ms. Long’s base salary was increased from $250,000 to $300,000 (pro rated for fiscal 2019). For fiscal 2020,
Ms. Long’s target bonus will be increased from 40% to 60% and her long term incentive award for fiscal 2020 will
be $350,000.
Pursuant to the Long Severance Agreement, if Ms. Long’s employment is terminated by the Company without Cause, she will receive as severance between 26 and 52 weeks of base pay depending on her length of employment with the Company and subject to timely election of COBRA between 26 and 52 weeks of continued medical coverage. The receipt of severance benefits is conditioned upon her execution of an effective and irrevocable release of claims as well as continued compliance with her post employment restrictive covenants including 12 month noncompete and nondisparagement provisions. The above summary is not complete and is qualified in its entirety by the Long Letter Agreement and Long Severance Agreement, copies of which are attached hereto as Exhibits 10.4 and 10.5, respectively, and are incorporated herein by reference.
Ms. Long, 45, previously served as our
Vice President of Human Resources since October 2018 and as the Company’s Division Vice President, Human Resources
since December 2014. Prior to joining the Company, Ms. Long served as Regional Human Resources Manager at United Rentals,
Inc. from June 2000 until February 2008. Ms. Long received a Bachelor of Science degree in Economics from Illinois State
University.