Exhibit 10.1
SPECTRUM BRANDS, INC. 2009
INCENTIVE PLAN
SECTION 1. PURPOSE;
DEFINITIONS.
The purpose of the Plan is to
support the Company’s ongoing efforts to attract and retain
leaders of exceptional talent and to provide the Company with the
ability to provide incentives directly linked to the profitability
of the Company’s businesses and to increases in shareholder
value.
For purposes of the Plan, the
following terms are defined as set forth below:
(a) “ Affiliate ”
has the meaning set forth in Rule 12b-2 promulgated under
Section 12 of the Exchange Act.
(b) “ Annual Incentive
Award ” means an Incentive Award made pursuant to
Section 5(a)(v) with a Performance Cycle of one year or
less.
(c) “ Award ”
means a grant under this Plan of an Incentive Award, Stock Option,
Stock Appreciation Right, Restricted Stock or Other Stock-Based
Award.
(d) “ Beneficial Owner
” has the meaning set forth in Rule 13d-3 promulgated under
Section 13 of the Exchange Act.
(e) “ Board ”
means the Board of Directors of the Company.
(f) “ Cause ”
means, in the case of a particular Award, unless the applicable
Award agreement states otherwise, (i) the Company or an
Affiliate having “cause” to terminate a
Participant’s employment or service, as defined in any
employment, severance, consulting or other similar
individually-negotiated agreement between the Participant and the
Company or an Affiliate in effect at the time of such termination
or (ii) in the absence of any such agreement as described in
the foregoing clause (i) (or the absence of any definition of
“Cause” contained therein), (A) the
Participant’s commission of a felony or a crime involving
moral turpitude, or other material act or omission involving
dishonesty or fraud, (B) the Participant’s conduct that
brings or is reasonably likely to bring the Company or any of its
Affiliates into public disgrace or disrepute and that affects the
Company’s or any Affiliate’s business in any material
way, (C) the Participant’s failure to perform duties as
reasonably directed by the Company (which, if curable, is not cured
within 10 days after notice thereof is provided to the Participant)
or (D) the Participant’s gross negligence, willful
malfeasance or material act of disloyalty in the performance of his
or her duties with respect to the Company or its Affiliates (which,
if curable, is not cured within 10 days after notice thereof is
provided to the Participant). Any determination of whether Cause
exists shall be made by the Committee in good faith and in its sole
discretion.
(g) “ Change in Control
” of the Company shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have
occurred:
(i) any Person is or becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or any of
its direct or indirect subsidiaries) representing more than 50% of
the combined voting power of the Company’s then outstanding
securities, excluding any Designated Holder and any Person who
becomes such a Beneficial Owner in connection with a transaction
described in clause (A) of subsection
(iii) below;
(ii) the following individuals cease
for any reason to constitute a majority of the members of the
Board: (A) individuals who, on the Effective Date, were
members of the Board (the “Incumbent Directors”),
(B) individuals whose election or nomination to the Board was
approved by Incumbent Directors constituting, at the time of such
election or nomination, at least a majority of the Board or
(C) individuals whose election or nomination to the Board was
approved by individuals referred to in clauses (B) and
(C) constituting, at the time of such election or nomination,
at least a majority of the Board (other than, in the cases of
clauses (B) and (C), directors whose initial nomination for,
or assumption of office as, members of the Board occurs as a result
of an actual or threatened solicitation of proxies or consents for
the election or removal of one or more directors by any Person
other than a solicitation for the election of one or more directors
by or on behalf of the Board);
(iii) there is consummated a merger
or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other entity, other than
(A) a merger or consolidation which results in the voting
securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) more than 50% of the
combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, (B) a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or indirectly, of voting securities
of the Company (not including in the securities Beneficially Owned
by such Person any securities acquired directly from the Company or
any of its direct or indirect subsidiaries) representing 50% or
more of the combined voting power of the Company’s then
outstanding voting securities or (C) a merger or consolidation
affecting the Company as a result of which a Designated Holder owns
after such transaction more than 50% of the combined voting power
of the voting securities of the Company or such surviving entity or
any parent thereof outstanding immediately after such merger or
consolidation; or
(iv) the shareholders of the Company
approve a plan of complete liquidation or dissolution of the
Company or there is consummated an agreement for the sale or
disposition by the Company of all or substantially all of the
assets of the Company and its subsidiaries taken as a whole, to any
Person, other than a sale or disposition by the Company of all or
substantially all of the assets of the Company to an entity, more
than 50% of the combined voting power of the voting securities of
which are owned by shareholders of the Company in substantially the
same proportions as their ownership of the Company immediately
prior to such sale.
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Notwithstanding the foregoing, a “Change
in Control” shall not be deemed to have occurred by virtue of
(I) the consummation of the Plan of Reorganization having been
satisfied or waived as set forth in Sections 8.2 and 8.3 of the
Plan of Reorganization or any other contemplated transactions
thereunder or (II) the consummation of any transaction or series of
integrated transactions immediately following which the record
holders of the Common Stock of the Company immediately prior to
such transaction or series of transactions continue to have
substantially the same proportionate ownership in an entity which
owns all or substantially all of the assets of the Company
immediately following such transaction or series of
transactions.
(h) “ Code ”
means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
(i) “ Commission
” means the Securities and Exchange Commission or any
successor agency.
(j) “ Committee ”
means the Compensation Committee of the Board or a subcommittee
thereof, any successor thereto or such other committee or
subcommittee as may be designated by the Board to administer the
Plan from time to time; provided , however , the
“Committee” shall be comprised at all times solely of
persons who are (i) “nonemployee directors” as
defined in Rule 16b-3 promulgated under the Exchange Act and
(ii) two or more “outside directors” as defined in
Section 162(m) of the Code.
(k) “ Common Stock
” or “ Stock ” means the Common Stock of
the Company.
(l) “ Company ”
means Spectrum Brands, Inc., a corporation organized under the laws
of the State of Delaware, or any successor thereto.
(m) “ Designated Holder
” means Harbinger Capital Partners Master Fund I, Ltd.,
Harbinger Capital Partners Special Situations Fund, L.P., Avenue
International Master, L.P., Avenue Investments, L.P., Avenue
Special Situations Fund V, L.P., Avenue Special Situations Fund IV,
L.P., Avenue-CDP Global Opportunities Fund, L.P. or D. E. Shaw
Laminar Portfolios, L.L.C. and each of their respective
subsidiaries and Affiliates (each, a “Designated
Holder”).
(n) “ Disability
” means a termination of employment or services by the
Company in the event the Participant is determined to be disabled
in accordance with the terms under the Company’s long-term
disability plan.
(o) “ Economic Value
Added ” means net after-tax operating profit less the
cost of capital.
(p) “ Effective Date
” has the meaning set forth in Section 15(g).
(q) “ Exchange Act
” means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
(r) “ Fair Market Value
” means, on a given date: (i) if the Common Stock is
listed on a national securities exchange, the closing sales price
of the Common Stock reported on the primary exchange on which the
Common Stock is listed and traded on such date, or, if
there
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is no such sale on that date, then on the last
preceding date on which such a sale was reported; (ii) if the
Common Stock is not listed on any national securities exchange but
is quoted in an inter-dealer quotation service on a last sale
basis, the average between the closing bid price and ask price
reported on such date, or, if there is no such sale on that date,
then on the last preceding date on which a sale was reported;
(iii) if Fair Market Value cannot be determined under clause
(i) or (ii) above, or if the Committee determines in its
sole discretion that the shares of Common Stock are too thinly
traded for Fair Market Value to be determined pursuant to clause
(i) or (ii), the fair market value as determined in good faith
by the Committee in its sole discretion; or (iv) if the Common
Stock is not listed on a national securities exchange or quoted in
an inter-dealer quotation service on a last sale basis, the amount
determined by the Committee in good faith to be the fair market
value of the Common Stock; provided, that in the event Fair Market
Value is determined pursuant to subsections (ii), (iii) or
(iv) of this Section 1(r), such determination shall be
made in a manner that complies with Section 409A of the
Code.
(s) “ Good Reason
” means, in the case of a particular Award, unless the
applicable Award agreement states otherwise, (i) the
Participant having “good reason” to voluntarily
terminate (or “constructively terminate”) his or her
employment or service, as defined in any employment, severance,
consulting or other similar individually-negotiated agreement
between the Participant and the Company or an Affiliate in effect
at the time of such termination or (ii) in the absence of any
such agreement as described in the foregoing clause (i) (or
the absence of any definition of “good reason” or
“constructive termination” contained therein),
(A) a material diminution in the Participant’s base
compensation or (B) a material and adverse change in the
geographic location at which the Participant must perform the
services; provided , that under clauses (i) and
(ii) above, the Participant provides notice of the existence
of a Good Reason condition within 10 days of the initial existence
of such condition, and Good Reason shall not exist if such
condition has been cured, if curable, within 10 days after such
notice has been provided by the Participant.
(t) “ Incentive Award
” means any Award that is either an Annual Incentive Award or
a Long-Term Incentive Award.
(u) “ Incentive Stock
Option ” means any Stock Option that complies with
Section 422 (or any amended or successor provision) of the
Code.
(v) “ Long-Term Incentive
Award ” means an Incentive Award made pursuant to
Section 5(a)(v) with a Performance Cycle of more than one
year.
(w) “ Nonqualified Stock
Option ” means any Stock Option that is not an Incentive
Stock Option.
(x) “ Other Stock-Based
Award ” means an Award made pursuant to
Section 5(a)(iv).
(y) “ Participant
” means an individual who has been selected by the Committee
to participate in the Plan and to receive an Award pursuant to
Section 5 of the Plan.
(z) “ Performance Cycle
” means the period selected by the Committee during which the
performance of the Company or any subsidiary, Affiliate or unit
thereof or any individual is measured for the purpose of
determining the extent to which an Award subject to Performance
Goals has been earned.
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(aa) “ Performance
Goals ” mean the objectives for the Company or any
subsidiary or Affiliate or any unit thereof or any individual that
may be established by the Committee for a Performance Cycle with
respect to any performance-based Awards contingently awarded under
the Plan. The Performance Goals for Awards that are intended to
constitute “performance-based” compensation within the
meaning of Section 162(m) (or any amended or successor
provision) of the Code shall be (i) based on one or more of
the following criteria: basic or diluted earnings per share (before
or after taxes), share price (including, but not limited to, growth
measures and total shareholder return), operating income, net
earnings or net income (before or after taxes), cash flow
(including, but not limited to, operating cash flow, free cash flow
and cash flow return on capital), return measures (including, but
not limited to, return on capital, assets, invested capital, equity
or sales), earnings before interest and taxes (“EBIT”),
earnings before or after interest, taxes, depreciation and/or
amortization, measures of Economic Value Added, net revenue or net
revenue growth, gross profit or gross profit growth, net operating
profit (before or after taxes), gross or operating margins,
productivity ratios, expense targets, margins, operating
efficiency, objective measures of customer satisfaction, working
capital targets, inventory control and enterprise value, and
(ii) established in writing by the Committee prior to the
earlier of (A) ninety (90) days after the commencement of
the Performance Cycle or (B) the date on which 25% of the
Performance Cycle will elapse, provided , that in either
case, achievement of the performance goals is substantially
uncertain on such date. Any one or more Performance Goals may be
used on an absolute or relative basis to measure the performance of
the Company and/or one or more Affiliates as a whole or any
business unit(s) of the Company and/or one or more Affiliates or
any combination thereof, as the Committee may deem appropriate, or
any of the above Performance Goals may be compared to the
performance of a group of comparator companies, or a published or
special index that the Committee, in its sole discretion, deems
appropriate, or as compared to various stock market
indices.
(bb) “ Person ”
has the meaning given in Section 3(a)(9) of the Exchange Act,
as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of
its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions
as their ownership of Stock of the Company.
(cc) “ Plan ”
means this 2009 Incentive Plan, as amended from time to
time.
(dd) “ Plan of
Reorganization ” means the confirmed Joint Plan of
Reorganization of Spectrum Jungle Labs Corporation, et al., filed
in the chapter 11 cases of the Company and certain of its
affiliates in the United States Bankruptcy Court for the Western
District of Texas, Case No. 09-50455.
(ee) “ Restricted
Period ” means the period during which an Award may not
be sold, assigned, transferred, pledged or otherwise
encumbered.
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(ff) “ Restricted Stock
” means an Award of shares of Common Stock pursuant to
Section 5(a)(iii).
(gg) “ Retirement
” means a termination of employment or services on or after
the date the Participant attains the age of 65.
(hh) “ Spread Value
” means, with respect to a share of Common Stock subject to
an Award, an amount equal to the excess of the Fair Market Value,
on the date such value is determined, over the Award’s
exercise or grant price, if any.
(ii) “ Stock Appreciation
Right ” or “ SAR ” means a right
granted pursuant to Section 5(a)(ii).
(jj) “ Stock Option
” means an Incentive Stock Option or a Nonqualified Stock
Option granted pursuant to Section 5(a)(i).
SECTION 2.
ADMINISTRATION.
The Plan shall be administered by
the Committee, which shall have the power to interpret the Plan and
to adopt such rules and guidelines for carrying out the Plan as it
may deem appropriate. The Committee shall have the authority to
adopt such modifications, procedures and subplans as may be
necessary or desirable to comply with the laws, regulations,
compensation practices and tax and accounting principles of the
countries in which the Company, a subsidiary or an Affiliate may
operate to assure the viability of the benefits of Awards made to
individuals employed in such countries and to meet the objectives
of the Plan.
Subject to the terms of the Plan,
the Committee shall have the authority to (i) determine those
individuals eligible to receive Awards, (ii) determine the
amount, type and terms and conditions of each Award,
(iii) determine at the time of the Award grant the number of
shares of Common Stock to be covered by, or with respect to which
payments, rights, or other matters are to be calculated in
connection with, Awards, (iv) determine whether, to what
extent, and under what circumstances Awards may be settled or
exercised in cash, shares of Common Stock, other securities, other
Awards or other property, or canceled, forfeited, or suspended and
the method or methods by which Awards may be settled, exercised,
canceled, forfeited, or suspended, (v) determine at the time
of the Award grant whether, to what extent, and under what
circumstances the delivery of cash, Common Stock, other securities,
other Awards or other property and other amounts payable with
respect to an Award shall be deferred either automatically or at
the election of the Participant or of the Committee,
(vi) interpret, administer, reconcile any inconsistency in,
correct any defect in and/or supply any omission in the Plan and
any instrument or agreement relating to, or Award granted under,
the Plan, (vii) establish, amend, suspend, or waive any rules
and regulations and appoint such agents as the Committee shall deem
appropriate for the proper administration of the Plan,
(viii) accelerate the vesting or exercisability of, payment
for or lapse of restrictions on, Awards, (ix) establish and
administer any Performance Goals applicable to such Awards, and
(x) make any other determination and take any other action
that the Committee deems necessary or desirable for the
administration of the Plan; provided , however , at
the discretion of the Board, such determinations may be made
subject to ratification by the Board; provided ,
further , the Committee’s power to amend
