AMENDED AND
RESTATED
EMPLOYMENT SECURITY
AGREEMENT
This Employment Security Agreement
(“Agreement”) is entered into as of this 30th day of
September, 2008 by and between Newell Rubbermaid Inc., a Delaware
corporation (“Employer”), and Mark D. Ketchum
(“Executive”).
WITNESSETH:
WHEREAS, Executive is currently
employed by Employer as the President and Chief Executive
Officer;
WHEREAS, Employer desires to provide
certain security to Executive in connection with Executive’s
employment with Employer; and
WHEREAS, Executive and Employer are
parties to an Employment Security Agreement dated as of
March 14, 2006, which agreement is hereby amended, restated
and replaced in its entirety with this Agreement in order to comply
with Section 409A of the Internal Revenue Code of 1986, as
amended.
NOW, THEREFORE, in consideration of
the mutual covenants and promises contained herein, and other good
and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Definitions . For
purposes of this Agreement.
(a) “Affiliate”
shall have the meaning set forth in Rule 12b-2 under the
Securities Exchange Act of 1934.
(b) “Base Salary”
shall mean Executive’s annual base salary at the rate in
effect on the date of a Change in Control, or if greater, the rate
in effect immediately prior to Executive’s termination of
employment with Employer.
(c) “Bonus” shall
mean an amount determined by multiplying Executive’s Base
Salary by the payout percentage that would apply to Executive based
on (i) the job position held by Executive on the date of a
Change in Control or the date of Executive’s termination of
employment with Employer (whichever position is higher at the time)
and (ii) attainment of the targeted performance goals at a
100% level, as determined under the Management Cash Bonus Plan of
Employer, or any prior or successor plan or arrangement covering
Executive (such amount to be determined regardless of whether
Executive would otherwise be eligible for a Bonus under the terms
of any such plan or arrangement or the extent to which the
performance goals are actually met).
(d) “Code” means
the Internal Revenue Code of 1986, as amended.
(e) “Change in
Control” shall mean the occurrence of any of the following
events:
(i) any individual,
partnership, firm, corporation, association, trust, unincorporated
organization or other entity (other than Employer or a trustee or
other fiduciary holding securities under an employee benefit plan
of Employer), or any syndicate or group deemed to be a person under
Section 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), is or becomes the
“beneficial owner” (as defined in Rule 13d-3 of
the General Rules and Regulations under the Exchange Act), directly
or indirectly, of securities of Employer representing 25% or more
of the combined voting power of Employer’s then outstanding
securities entitled to vote generally in the election of
directors;
(ii) Employer is party to a
merger, consolidation, reorganization or other similar transaction
with another corporation or other legal person unless, following
such transaction, more than 50% of the combined voting power of the
outstanding securities of the surviving, resulting or acquiring
corporation or person or its parent entity entitled to vote
generally in the election of directors (or persons performing
similar functions) is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners of Employer’s
outstanding securities entitled to vote generally in the election
of directors immediately prior to such transaction, in
substantially the same proportions as their ownership, immediately
prior to such transaction, of Employer’s outstanding
securities entitled to vote generally in the election of
directors;
(iii) Employer sells all or
substantially all of its business and/or assets to another
corporation or other legal person unless, following such sale, more
than 50% of the combined voting power of the outstanding securities
of the acquiring corporation or person or its parent entity
entitled to vote generally in the election of directors (or persons
performing similar functions) is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners of Employer’s
outstanding securities entitled to vote generally in the election
of directors immediately prior to such sale, in substantially the
same proportions as their ownership, immediately prior to such
sale, of Employer’s outstanding securities entitled to vote
generally in the election of directors; or
(iv) during any period of two
consecutive years or less, individuals who at the beginning of such
period constituted the Board of Directors of Employer (and any new
Directors, whose appointment or election by the Board of Directors
or nomination for election by Employer’s stockholders was
approved by a vote of at least two-thirds of the Directors then
still in office who either were Directors at the beginning of the
period or whose appointment, election or nomination for election
was so approved) cease for any reason to constitute a majority of
the Board of Directors.
(f) “Good Cause”
shall exist if, and only if:
(i) Executive willfully engages
in misconduct in the performance of his duties that causes material
harm to Employer; or
(ii) Executive is convicted of
a criminal violation involving fraud or dishonesty.
Without limiting the generality of the foregoing, the following
shall not constitute Good Cause: the failure by Executive and/or
Employer to attain financial or other business objectives; any
personal or policy disagreement between Executive and Employer or
any member of the Board of Directors of Employer; or any action
taken by Executive in connection with his duties if Executive acted
in good faith and in a manner he reasonably believed to be in, and
not opposed to, the best interest of Employer and had no reasonable
cause to believe his conduct was improper. Notwithstanding anything
herein to the contrary, in the event Employer terminates the
employment of Executive for Good Cause hereunder, Employer shall
give Executive at least 30 days prior written notice
specifying in detail the reason or reasons for Executive’s
termination.
(g) “Good Reason”
shall exist if, without the Executive’s written consent:
(i) there is a material change
in the nature or the scope of Executive’s authority or
duties;
(ii) Executive is required to
report (A) to an officer with a materially lesser position or
title than the officer to whom Executive reported on the date of
the Change in Control, if Executive is not the Chief Executive
Officer of Employer, or (B) to other than the entire Board, if
Executive is the Chief Executive Officer of Employer;
(iii) there is a material
reduction in Executive’s rate of base salary;
(iv) Employer changes by 50
miles or more the principal location in which Executive is required
to perform services;
(v) Employer terminates or
materially amends, or terminates or materially restricts
Executive’s participation in, any Incentive Plan or
Retirement Plan so that, when considered in the aggregate with any
substitute Plan or Plans, the Incentive Plans and Retirement Plans
in which he is participating materially fail to provide him with a
level of benefits provided in the aggregate by such Incentive Plans
or Retirement Plans prior to such termination or amendment; or
(vi) Employer materially
breaches the provisions of this Agreement;
A termination of Executive’s employment by Executive shall
not be deemed to be for Good Reason unless (1) Executive gives
notice to Employer of the existence of the event or condition
constituting Good Reason within thirty (30) days after such
event or condition initially occurs or exists, (2) the
Employer fails to cure such event or condition within thirty
(30) days after receiving such notice, and
(3) Executive’s “separation from service”
within the meaning of Section 409A of the Code occurs not later
than ninety (90) days after such event or condition initially
occurs or exists (or, if earlier, the last day of the Term).
(h) “Incentive
Plan” shall mean any incentive, bonus, equity-based or
similar plan or arrangement currently or hereafter made available
by Employer or an Affiliate in which Executive is eligible to
participate.
(i) “Retirement
Plan” shall mean any qualified or supplemental defined
benefit retirement plan or defined contribution retirement plan,
currently or hereinafter made available by Employer or an Affiliate
in which Executive is eligible to participate.
(j) “Severance
Period” shall mean the period beginning on the date the
Executive’s employment with Employer terminates under
circumstances described in Section 3 and ending on the date
24 months thereafter.
(k) “Welfare Plan”
shall mean any plan or arrangement providing health, prescription
drug, vision, dental, disability, survivor income or life insurance
benefits that is currently or hereafter made available by Employer
or an Affiliate in which Executive is eligible to participate.
2. Term . The term of
this Agreement shall be the period beginning on the date hereof and
terminating on the date 24 months after the date of
Executive’s termination of employment (the
“Term”).
3. Termination of
Employment . If a Change in Control occurs, Executive shall be
entitled to the benefits described in Section 4 if at any time
during the 24-month period following the Change in Control
(i) the employment of Executive with Employer is terminated by
Employer for any reason other than Good Cause, or
(ii) Executive terminates his employment with Employer for
Good Reason.
4. Benefits Upon Termination
of Employment . Upon termination of Executive’s
employment with Employer under circumstances described in
Section 3 above:
(a) Employer shall pay
Executive, in a lump sum as soon as practicable following
Executive’s termination of employment, but in no event later
than 30 days following such termination, the sum of:
(i) three (3) times the
sum of the Executive’s Base Salary and the Executive’s
Bonus; plus
(ii) the Executive’s
Bonus multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the date of termination
occurs through the date of termination and the denominator of which
is 365.
(b) Executive shall be entitled
to receive any and all benefits accrued under any other Incentive
Plans to the date of termination of employment, the amount,
entitlement to, form and time of payment of such benefits to be
determined by the terms of such Incentive Plans. For purposes of
calculating Executive’s benefits under the Incentive Plans,
Executive’s employment shall be deemed to have terminated by
reason of retirement under circumstances that have the most
favorable result for Executive thereunder.
(c) Executive’s benefits
accrued or credited through the date of termination of employment
under the Newell Rubbermaid Supplemental Executive Retirement Plan,
or its successor (“SERP”) and the Newell Rubbermaid
Inc. 2008 Deferred Compensation Plan, or its successor (the
“2008 Deferred Compensation Plan”) that are not vested
as of the date of termination of employment shall be fully vested
and paid in accordance with the terms of the applicable plan
(subject to any forfeiture provisions applicable to the plans).
Employer shall also pay to the Executive, in a lump sum as soon as
practicable following Executive’s termination of employment,
but in no event later than 30 days following such termination,
the sum of:
(i) the excess, if any, of
(A) the actuarial equivalent of the benefit under the SERP
(utilizing actuarial assumptions no less favorable to the Executive
than the most favorable of those in effect under the SERP at any
time from the day immediately prior to the Change in Control) that
the Executive would receive if the Executive’s employment
continued for the entire Severance Period, assuming for this
purpose that: (1) all accrued benefits are fully vested,
(2) the Executive’s age and years of service is
increased by the number of years that the Executive is deemed to be
so employed, (3) for purposes of determining the
Executive’s compensation during each year of the Severance
Period, the base salary and bonus for each year shall be at the
rate set forth in Sections 1(b) and 1(c) (and shall exclude any of
the severance benefits provided under this Agreement), subject to
any special adjustment provisions in the applicable plan and
(4) solely for purposes of calculating the benefit under this
Section 4(c)(i)(A), the benefit under the Newell Rubbermaid
Pension Plan and the 2008 Deferred Compensation Plan shall be
calculated without regard to the additional age and service credit
provided under this Section 4(c)(i) or Section 4(c)(ii),
over (B) the actuarial equivalent of the Executive’s
actual benefit, if any, under the SERP as of the Executive’s
date of termination, plus
(ii) an amount equal to the sum
of Employer matching or other Company contributions (but not the
Executive’s voluntary deferrals) under Employer’s
qualified defined contribution plans in which the Executive
participates and the 2008 Deferred Compensation Plan that the
Executive would receive if the Executive’s employment
continued during the Severance Period, assuming for this purpose
that (A) the Executive’s benefits under such plans are
fully vested, (B) the Executive’s age and years of
service is increased by the number of years that the Executive is
deemed to be so employed, (C) Employer’s rate of matching or
other contribution is equal to the greater of the rate in effect on
the date of the Change in Control, or if greater, the rate in
effect immediately prior to the Executive’s termination of
employment, (D) for purposes of determining the
Executive’s compensation during each year of the Severance
Period, the base salary and bonus for each year shall be at the
rate set forth in Sections 1(b) and 1(c) (and shall exclude any of
the severance benefits provided under this Agreement), subject to
any special adjustment provisions in the applicable plan, and (E)
to the extent that Employer matching or other contributions are
determined based on the contributions or deferrals of the
Executive, that the Executive’s contribution or deferral
elections, as appropriate, are those in effect immediately prior to
the Executive’s termination of employment, plus
(iii) an amount equal to the
Executive’s benefits accrued or credited through the date of
termination of employment under the Employer’s qualified
defined contribution plans that are not vested as of the date of
termination of employment.
(d) If upon the date of
termination of Executive’s employment, Executive holds any
awards with respect to securities of Employer, (i) all such
awards that are options shall immediately become exercisable upon
such date and shall be exercisable thereafter until the earlier of
the third anniversary of Executive’s termination of
employment or the expiration of the term of the options;
(ii) all restrictions on any awards of restricted securities
shall terminate or lapse; and (iii) all performance goals
applicable to any performance-based awards shall be deemed
satisfied at the highest level and paid in accordance with the
terms of the applicable award agreement.
(e) During the Severance
Period, Executive and his spouse and eligible dependents shall
continue to be covered by all Welfare Plans in which he or his
spouse or eligible dependents were participating immediately prior
to the date of his termination of employment, as if he continued to
be an active employee of Employer, and Employer shall continue to
pay the costs of such coverage under such Welfare Plans on the same
basis as is applicable to active employees covered thereunder;
provided that, if participation in any one or more of such Welfare
Plans is not possible under the terms thereof, Employer shall
provide substantially identical benefits. Such coverage shall cease
if and when Executive obtains employment with another employer
during the Severance Period and becomes eligible for coverage under
any substantially similar plans provided by his new employer. If
Executive or his spouse or eligible dependents are covered under
any Welfare Plan that is a group health plan as defined in Title I,
Part 6 of the Employee Retirement Income Security Act of 1974
(“COBRA”) pursuant to this subsection (e), Executive
and his spouse and eligible dependents shall be eligible for COBRA
continuation coverage. Executive shall be responsible for paying
the full cost of such coverage. The 18-month (or 29-month, if the
COBRA disability extension is applicable) COBRA period shal
