AMENDED AND RESTATED EMPLOYMENT AGREEMENT Leslie’s Poolmart, Inc. Lawrence H. Hayward

EXHIBIT 10.13

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Leslie’s Poolmart, Inc.

Xxxxxxxx X. Xxxxxxx

This Amended and Restated Employment Agreement (“Agreement”) is made as of November 21, 2003, by and between LESLIE’S POOLMART, INC., a Delaware corporation (“LPM”), and XXXXXXXX X. XXXXXXX (“Xx. Xxxxxxx”).

R E C I T A L S

A. LPM is a corporation organized under the laws of Delaware. It is engaged in the business of marketing pool supplies and related pool equipment and products.

B. LPM and Xx. Xxxxxxx are parties to that certain Employment Agreement January 1, 2000 governing LPM’s employment of Xx. Xxxxxxx (the “Original Agreement”).

C. LPM wishes to continue the employment of Xx. Xxxxxxx as President and Chief Executive Officer of LPM to manage the business and affairs of LPM. and Xx. Xxxxxxx desires to be so employed and act in such capacities.

D. This Agreement amends and restates the Original Agreement in its entirety.

A G R E E M E N T

Accordingly, the parties agree as follows:

1. Employment. LPM will continue to employ Xx. Xxxxxxx, and Xx. Xxxxxxx will continue to be employed by LPM, as the President and Chief Executive Officer of LPM and will continue to be renominated as a member of its Board of Directors. Xx. Xxxxxxx shall serve at the will of the Board of Directors. Xx. Xxxxxxx shall be accorded the authority by the Board of Directors commensurate with his position as Chief Executive Officer of LPM, and he shall make a good faith effort to act in the best interests of LPM and perform those duties reasonably assigned to him by the Board of Directors. Xx. Xxxxxxx will devote himself full-time to the interests of LPM and shall not accept other employment except with the consent of the Board of Directors of LPM.

2. Location of Employment. Xx. Xxxxxxx’x principal place of employment shall be at the executive offices of LPM or at such other location as mutually agreed upon by the parties.

3. Compensation.

a. Salary. LPM shall pay Xx. Xxxxxxx a salary at the annual rate of $425,000.00, less normal withholdings, for each calendar year, prorated for any portion thereof, payable in substantially equal installments in accordance with LPM’s usual payroll practice, but in no event less frequently than monthly.

b. Bonus. Xx. Xxxxxxx shall participate in LPM’s bonus plan applicable to top executives, with a target bonus for each year of not less than 70% of his base salary in effect at

the end of such year. The bonus shall be paid promptly upon completion of LPM’s year-end audit for such year.

c. Cash Allowances. LPM shall pay Xx. Xxxxxxx an annual cash allowance for expenses that relate to his employment but which might be considered partially or wholly personal in nature. The allowance shall be $25,000, increased annually by 5%, plus the amount necessary to gross Xx. Xxxxxxx up for any and all tax liabilities incurred by Xx. Xxxxxxx as result of the allowance (so that Xx. Xxxxxxx receives, in the first year for example, $25,000 after payment of applicable taxes). In addition, LPM shall pay all expenses relating to Xx. Xxxxxxx’x reasonable out-of-pocket legal and accounting expenses incurred in connection with the preparation and negotiation of this Agreement, also grossed up for any taxes that may apply.

d. Other Benefits. Xx. Xxxxxxx shall receive other benefits such as four (4) weeks of vacation each year (accruing pursuant to LPM’s company policy), personal and sick leave, insurance and other benefits consistent with the then-current policies of LPM and equal to those benefits extended to the most senior executives of LPM. Xx. Xxxxxxx will be provided with office facilities, secretarial support, and business expense reimbursement consistent with the policies of LPM with respect to its most senior executives.

x. Xxxxxxxxx. If Xx. Xxxxxxx’x employment is terminated by LPM for any reason other than Xx. Xxxxxxx’x death, disability, Just Cause (as defined below), or pursuant to LPM’s retirement policy, LPM shall pay him a lump-sum cash amount equal to 200% of the sum of (i) his base salary in effect at the time of termination, (ii) the greater of his target bonus for such year and the average of his bonuses for the prior two years, (iii) an amount equal to the monthly premium payable by Xx. Xxxxxxx for health and medical-care insurance coverage of Xx. Xxxxxxx and his dependents for coverage period required under COBRA and (iv) an amount equal to the monthly premium payable by Xx. Xxxxxxx for health and medical-care insurance coverage of Xx. Xxxxxxx and his dependents for coverage period after the expiration of COBRA period multiplied by 12, provided, however, that the amount of such premium will be capped at 150% of the premium that was payable under COBRA. Such payment shall be made at the time Xx. Xxxxxxx’x employment terminates or at such later time as the amount of such payment becomes reasonably determinable. For the purpose of this section, a termination for “Just Cause” shall mean a termination of employment for any of the following reasons:

(i) Xx. Xxxxxxx’x conviction of a felony, without the right of further appeal, which has an adverse impact on LPM or which involves the material misappropriation of LPM’s assets;

(ii) an intentional or grossly negligent violation by Xx. Xxxxxxx of any reasonable policy of the Board of Directors of LPM that results in material damage to LPM and which, if such violation is curable, after notice to do so, Xx. Xxxxxxx fails to correct within a reasonable time;

(iii) the performance of services by Xx. Xxxxxxx for any other company, entity, or person which directly competes with LPM during the time Xx. Xxxxxxx is employed by LPM, without the written approval of the Board of Directors of LPM.

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Further, Xx. Xxxxxxx shall be entitled to all of the severance set forth in this Section 3(e) if Xx. Xxxxxxx terminates his employment with LPM for “Good Reason.” Xx. Xxxxxxx shall be entitled to terminate his employment for “Good Reason” only upon:

(i) written notice of such termination to LPM, effective within 30 days after being notified that Xx. Xxxxxxx is required by LPM to relocate from his existing home due to the relocation of the corporate office; or

(ii) written notice of such termination to LPM, provided such notice is given no later than 15 days from the earlier of (1) the date of execution of a definitive agreement for or the consummation of a Change of Control (provided that the termination will only be effective upon consummation of the Change of Control) and (2) the consummation of a Change of Control. “Change of Control” shall mean, a sale by the Green Equity Investors II, L.P. of a majority of the voting securities of LPM or by LPM of substantially all of its business or assets, or the consolidation or merger of LPM with another entity (other than a consolidation or merger in which a majority of the stockholders of LPM comprises a majority of the holders of voting securities of the surviving entity or the entity that controls such entity).

f. Disability or Death. “Disability.” For purposes of this Agreement, Executive will be considered “disabled” when Executive is unable to perform the essential functions of Executive’s job, with or without reasonable accommodation, for a period of 12 workweeks or more in a rolling 12-month period. Executive acknowledges that, given Executive’s position, it would be unreasonable and/or an undue hardship for LPM to be without an individual able to perform the essential functions of Executive’s position for any longer period of time. If Xx. Xxxxxxx’x employment is terminated as a result of disability or in the case of death, Xx. Xxxxxxx or his estate shall be entitled to receive (i) any unpaid base salary that had been earned or would have been earned through the end of the month of termination; (ii) 18 months of Xx. Xxxxxxx’x base salary paid in installments in accordance with LPM’s normal payroll procedures; and (iii) a pro-rata portion of the bonus to which he would otherwise have been entitled for the year, based on the number of months in the year of termination during which he was employed, to be paid at such time bonuses are paid to other executives; (iv) a pro-rata portion of his cash allowance for the year, (v) any reimbursements to which he is entitled; (vi) compensation for unused vacation; (vii) continuation of health insurance coverage for Xx. Xxxxxxx’x dependents at LPM’s expense for 18 months under COBRA; and (viii) any other amounts or benefits due after the termination of employment under the terms of other agreements, awards, plans’ arrangements, policies or programs.

4. Reimbursement for Expenses. During the term of this Agreement, if LPM’s executive offices are relocated to a location beyond a 25 mile radius of metropolitan Phoenix, Arizona, LPM shall reimburse Xx. Xxxxxxx for his increase in travel, housing and living expenses incurred as a result of such relocation, in addition to the reimbursement of those business expenses set forth in Section 3 above.

5. Representation of Xx. Xxxxxxx. Xx. Xxxxxxx represents and warrants that execution or delivery of this Agreement, or his performance hereunder will conflict with, or result in a breach of, any obligation, contract, agreement, covenant or instrument to which he is a party.

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6. Dispute Resolution. This Agreement shall be governed and construed in accordance with the laws of the state of Xx. Xxxxxxx’x principal place of employment. Xx. Xxxxxxx and LPM agree that any and all disputes, controversies or claims of any nature between them including, without limitation, any disputes arising out of or concerning this Agreement, Xx. Xxxxxxx’x employment or his termination shall be determined exclusively by final and binding arbitration before a single arbitrator located in the same county as Xx. Xxxxxxx’x principal place of employment, administered by the American Arbitration Association (“AAA”) under the National Rules For Resolution Of Employment Disputes of the AAA, and that judgment upon the award of the arbitrator may be rendered in any court of competent jurisdiction. This includes any claims Xx. Xxxxxxx may have against LPM or against LPM’s officers, directors, employees or agents in their capacity as such or otherwise. The arbitrator shall be a former jurist or an attorney with substantial experience in employment matters and mutually agreed to by the parties in their reasonable discretion. This agreement to arbitrate does not include claims covered by unemployment insurance and workers’ compensation statutes.

The arbitrator’s authority and jurisdiction shall be limited to determining the dispute in arbitration in conformity with law to the same extent as if such dispute were determined as to liability and remedy by a court without a jury. The arbitrator shall render an award which shall include a written statement of opinion setting forth the arbitrator’s findings of fact and conclusions of law. XX. XXXXXXX AND LPM EXPRESSLY WAIVE ALL RIGHTS TO A JURY TRIAL IN COURT ON ALL STATUTORY OR OTHER CLAIMS.

7. Golden Parachute Tax Gross-up

(a) Application of Gross-up. All payments and benefits provided to Xx. Xxxxxxx by LPM are intended to be reasonable compensation for services by Xx. Xxxxxxx, and LPM intends that Xx. Xxxxxxx receive the full economic benefit of such payments and benefits. In the event that it is determined that any payment or benefit provided by LPM to or for the benefit of Xx. Xxxxxxx, either under this Agreement or otherwise, and regardless of under what plan or arrangement it was made, will be subject to the excise tax imposed by section 4999 of the Code or any successor provision (“section 4999”), LPM will, prior to the date on which any amount of the excise tax must be paid or withheld, make an additional lump-sum payment (the “gross-up payment”) to Xx. Xxxxxxx. The xxxxx-up payment will be sufficient, after giving effect to all federal, state and other taxes and charges (including interest and penalties, if any) with respect to the gross-up payment, to make Xx. Xxxxxxx whole for all taxes (including withholding taxes) and any associated interest and penalties, imposed under or as a result of section 4999.

(b) Determinations. Determinations under this Section will Section will be made by LPM’s tax accountants unless Xx. Xxxxxxx has reasonable objections to the use of that firm, in which case the determinations will be made by a comparable firm chosen by Xx. Xxxxxxx after consultation with LPM mutually acceptable to both parties (the firm making the determinations to be referred to as the “Firm”). The determinations of the Firm will be binding upon LPM and Xx. Xxxxxxx except as the determinations are established in resolution (including by settlement) of a controversy with the Internal Revenue Service to have been incorrect. LPM will pay all fees and expenses of the Firm.

(c) Controversy with IRS. If the Internal Revenue Service asserts a claim that, if successful, would require LPM to make a gross-up payment or an additional gross-up payment,

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LPM and Xx. Xxxxxxx will cooperate fully in resolving the controversy with the Internal Revenue Service. LPM will make or advance such gross-up payments as are necessary to prevent Xx. Xxxxxxx from having to bear the cost of payments made to the Internal Revenue Service in the course of, or as a result of, the controversy. The Firm will determine the amount of such gross-up payments or advances and will determine after resolution of the controversy whether Xx. Xxxxxxx must return any advances must be returned by Xx. Xxxxxxx to LPM. LPM will bear all expenses of the controversy and will gross Xx. Xxxxxxx up for any additional taxes that may be imposed upon Xx. Xxxxxxx as a result of its payment of such expenses.

(d) Cooperation with LPM. Xx. Xxxxxxx shall notify LPM promptly (in any event no less than 10 days following receipt thereof) and in writing of any proposed or final claim by the Internal Revenue Service that, if successful, would require the payment by LPM of any amount under this Section 7. Xx. Xxxxxxx shall not pay such claim prior to the expiration of the thirty (30) calendar day period following the date on which Xx. Xxxxxxx gives such notice to LPM (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If LPM notifies Xx. Xxxxxxx in writing prior to the expiration of such period that LPM desires to contest such claim (or if Xx. Xxxxxxx pays the related taxes within such shorter period and LPM requests, within such thirty (30)-day period, that Xx. Xxxxxxx claim a refund of some or all of such taxes), then Xx. Xxxxxxx shall:

(i) give LPM any information reasonably requested by LPM relating to such claim,

(ii) take such action in connection with contesting such claim or claiming such refund as LPM shall reasonably request in writing from time to time, including accepting legal representation with respect to such claim by an attorney reasonably selected by LPM,

(iii) cooperate with LPM in good faith in order effectively to contest such claim or pursue such refund, and

(iv) permit LPM to participate in any proceedings relating to such claim;

provided, however, that LPM shall bear and pay directly all costs and expenses incurred in connection with such contest or refund claim (including, but only to the extent reasonably incurred, out-of-pocket costs and expenses incurred by Xx. Xxxxxxx), and shall indemnify and hold Xx. Xxxxxxx harmless, on an after-tax basis, for any excise tax or income tax imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this subsection 7(d), LPM shall control all proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the applicable taxing authority in respect of such claim and may, at its sole discretion, either direct Xx. Xxxxxxx to pay the tax claimed and xxx for a refund or contest the claim in any permissible manner, and Xx. Xxxxxxx agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as LPM shall determine. If the advancement described below is permitted under applicable law, LPM may direct Xx. Xxxxxxx to pay such claim and xxx for a refund, and shall advance the amount of such payment to Xx. Xxxxxxx, on an interest-free basis, and shall indemnify and hold Xx. Xxxxxxx harmless,

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on an after-tax basis, from any excise tax or income tax imposed with respect to such advance or with respect to any imputed income in connection with such advance; and provided, further, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Xx. Xxxxxxx with respect to which such contested amount is claimed to be due (other than any such extension arising by operation of law) is limited solely to such contested amount or issues. Furthermore, LPM’s control of the contest shall be limited to issues with respect to which the payment under this Section 7 would be payable hereunder, and Xx. Xxxxxxx shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e) If, after the receipt by Xx. Xxxxxxx of a payment under this Section 7 or an amount advanced by LPM pursuant to subsection 7(d), Xx. Xxxxxxx becomes entitled to receive any refund with respect to the excise tax to which such payment relates or with respect to such claim, Xx. Xxxxxxx shall promptly pay to LPM the amount of such refund (together with any interest paid or credited thereon after Taxes applicable thereto), less any taxes required to be paid by Xx. Xxxxxxx with respect to the receipt thereof. If, after the receipt by Xx. Xxxxxxx of an amount advanced by LPM pursuant to this Section 7 a determination is made that Xx. Xxxxxxx shall not be entitled to any refund with respect to such claim and LPM does not notify Xx. Xxxxxxx in writing of its intent to contest such denial of refund prior to the expiration of thirty (30) calendar days after LPM’s receipt of notice of such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall be offset, to the extent thereof, against the amount of payment required to be paid. LPM may request that Xx. Xxxxxxx pursue a refund of any payment under this Section 7, and in such case the provisions of subsection 7(d) and this subsection 7(e) shall govern the pursuit of such refund.

(f) Notwithstanding any other provision of this Section 7, LPM may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing authority, for the benefit of Xx. Xxxxxxx, all or any portion of any payment and Xx. Xxxxxxx hereby consents to such withholding.

(g) LPM’s obligations under this Section 7 will survive the termination of the Employment Period and any termination of this Agreement. Xx. Xxxxxxx shall cooperate as reasonably requested by LPM in order to reduce the amount of any payments or benefits to Xx. Xxxxxxx that would be subject to the tax imposed by section 4999.

8. Entire Agreement/Modifications. This Agreement constitutes the entire agreement of the parties with respect to Xx. Xxxxxxx’x employment with LPM. It supersedes any prior agreement, statement or representation. It may be modified only by written instrument executed by the party against which the modification is asserted. Failure to require performance of any provision shall not affect the right at a later time to enforce the same. No waiver by either party of a breach, whether by conduct or otherwise, shall be construed as a further or continuing waiver of any such breach. Termination of Xx. Xxxxxxx’x employment at any time will not terminate those provisions of this Agreement imposing obligations that, by character or design must be performed after such termination of the employment.

9. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition

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or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

10. Expiration of Agreement. Unless renewed or extended by mutual written agreement of the parties hereto, this Agreement will automatically expire on the fifth anniversary of the date hereof. If LPM’s employment of Xx. Xxxxxxx is terminated prior to the expiration of this agreement, those provisions of this Agreement imposing obligations that by character or design must continue to be performed after the fifth anniversary of this Agreement shall survive the expiration of this Agreement.

11. Assignability.

a. Subject to the provisions of Section 3(e) above, in the event LPM shall merge or consolidate with any other partnership, limited liability company, corporation, or business entity or all or substantially all LPM’s business or assets shall be transferred in any manner to any other partnership, limited liability company, corporation or business entity, such successor shall thereupon succeed to, and be subject to, all rights, interests, duties, obligations of, and shall thereafter be deemed for all purposes hereof to be, LPM hereunder.

b. This Agreement is personal in nature and none of the parties hereto shall, without the written consent of the other, assign or transfer this Agreement or any rights or obligations hereunder, except by operation of law or pursuant to the terms of Section 11(a) above.

c. Nothing expressed or implied herein is intended or shall be construed to confer upon or give to any person, other than the parties hereto, any right, remedy or claim under or by reason of this Agreement or of any term, covenant or condition hereof.

12. Confidentiality and Non-Solicitation. The parties recognize that Xx. Xxxxxxx will have access to trade secrets and proprietary information of LPM, and they recognize that should such information be revealed to a competitor, LPM would be materially damaged in an amount difficult to calculate. During the term of this Agreement and thereafter, Xx. Xxxxxxx promises not to disclose or use or induce or assist in the disclosure or use any of the above information except for the benefit of LPM. Accordingly, Xx. Xxxxxxx agrees that for one (1) year after termination of his employment with LPM, regardless of the reason for such termination, he shall not, directly or indirectly, on his behalf or the behalf of any other person or entity, solicit any customers of LPM to cease to do business or to reduce the amount of business with LPM or to do business with another company that is a competitor of LPM or solicit any person who is an employee of LPM to terminate such employment.

13. Withholding. All amounts or benefits payable hereunder shall be subject to applicable tax withholding, and the withholding of any such amounts shall be treated as payment thereof to Xx. Xxxxxxx for purposes of determining whether all amounts required hereunder to be paid have been paid. Withholding of tax from any non-cash amounts or benefits that are subject to withholding may be made from cash amounts otherwise payable to Xx. Xxxxxxx.

[signature page follows]

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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the day and year first written above.

LESLIE’S POOLMART, INC.								XXXXXXXX X. XXXXXXX
/s/    XXXXXX X. XXXXXXXX								/s/    XXXXXXXX X. XXXXXXX
Name: Title:		Xxxxxx X. Xxxxxxxx EVP & CFO