EXHIBIT 10.21
EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EXECUTIVE EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "AGREEMENT")
is entered into and effective as of _____________, 2002 ("Closing Date"), by and
between Xxxxxx Xxxxxxx ("Executive") and United Industries Corporation, a
Delaware corporation ("United). United, the Company (as defined below) and
Executive are sometimes collectively referred to herein as the "Parties" and
individually as a "Party."
Executive has been an employee, officer, director and stockholder of
Xxxxxxx Company, a Missouri corporation ("Xxxxxxx"), and as such, possesses
special knowledge, abilities and experience regarding the business of Xxxxxxx.
Upon the closing of the transaction as set forth in the Merger Agreement to
which United and Xxxxxxx are parties dated _________, 2002 ("Merger Agreement"),
Xxxxxxx became a wholly owned subsidiary of United (the "Closing") ("United" and
"Xxxxxxx" are herein collectively referred to herein as the "Company"). The
Company desires to employ Executive as a Senior Vice President with respect to
its business and Executive desires to provide services to the Company upon the
terms and conditions set forth in this Agreement.
In consideration of the mutual covenants and agreements set forth herein,
the Parties agree as follows:
1. EMPLOYMENT.
The Company hereby engages Executive as a Senior Vice President, and
Executive hereby accepts such engagement, for a period commencing as of the
Closing Date and terminating on the third anniversary of the Closing (the
"Employment Period"), subject to earlier termination as provided in Paragraphs
12, 13 or 14 of this Agreement. Executive shall have such responsibilities,
duties and authorities, and shall render such services of an executive and
administrative character, or act in such other executive capacity for the
Company and its affiliates, as the Company's Chief Executive Officer ("CEO") or
its Board of Directors (the "Board") shall from time to time reasonably direct.
Executive shall devote his best efforts, energies and abilities and his full
business time, skill and attention (except as described below and except for
permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company. Executive shall perform
the duties and carry out the responsibilities assigned to him, to the best of
his ability, in a diligent, trustworthy, businesslike and efficient manner for
the purpose of advancing the business of the Company. It is understood and
agreed that Executive shall render such services from St. Louis, Missouri;
provided that, the Executive may be required to travel from time to time at the
reasonable direction of the Company.
2. BASE COMPENSATION AND INCENTIVE.
(a) During the Employment Period, the Company shall pay Executive a Base
Salary at a rate of three hundred thousand dollars ($300,000.00) per annum,
payable in equal monthly installments less withholding as required by law. The
Base Salary will be reviewed by, and shall be subject to increase at the
discretion of the Board or the Compensation Committee of the Board in accordance
with the Company's then-current policy for reviewing the salaries of its
executive employees. Upon termination of the Employment Period, the Base Salary
for any partial year shall be prorated based on the number of days elapsed in
such year during which the Employment Period continued.
(b) Executive shall be eligible to receive an incentive bonus of up to
fifty percent (50%) of Base Salary upon the attainment of certain goals and
objectives as established and determined by the Company's CEO.
3. BENEFITS, OPTIONS, TAXES AND WITHHOLDING.
(a) BENEFITS. In addition to the Base Salary payable to Executive
hereunder, Executive shall be entitled to (i) an automobile allowance of One
Thousand Dollars ($1,000.00) per month and (ii) such benefits as are, from time
to time, afforded to other executives of the Company who hold a position
comparable to Executive, which may be revised, removed or altered by the Board
with respect to all similarly situated executives of the Company. By way of
example, such benefits generally include:
(1) hospitalization, disability, life, health and dental insurance in
amounts consistent with Company policy for all key management employees, as
reasonably determined by the Board;
(2) up to five (5) weeks paid vacation each year with salary,
consistent with Company policy for all senior executive employees and
provided that unused vacation time shall not be carried over to subsequent
years;
(3) reimbursement for reasonable, ordinary and necessary
out-of-pocket business expenses incurred by Executive in the performance of
its duties, subject to the Company's policies in effect from time to time
with respect to travel, entertainment and other expenses, including without
limitation, requirements with respect to reporting and documentation of
such expenses;
(4) other benefit arrangements, including a 401(k) or similar tax
deferral plan, to the extent made generally available by the Company to its
executives and key management employees.
(b) Options. Subject to approval by either the Board or the Compensation
Committee of the Board in their sole and absolute discretion, EXECUTIVE SHALL BE
ELIGIBLE TO RECEIVE, under and in accordance with the Company's 2001 Stock
Option Plan, an option to purchase 100,000 Class-A and 100,000 Class-B shares of
the common stock of the Company at $5.00 per share. Such shares shall, if
approved, BE EFFECTIVE UPON THE DATE GRANTED AND APPROVED BY THE BOARD OR THE
COMPENSATION COMMITTEE OF THE BOARD, AND SHALL vest in accordance with, and be
subject to all the terms and conditions of, the 2001 Stock Option Plan and the
Stock Option Agreement which Executive will be required to execute in accordance
therewith.
(c) TAXES AND WITHHOLDING. All compensation payable to Executive hereunder
is stated in gross amount and shall be subject to all applicable withholding
taxes, other normal payroll and any other amounts required by law to be
withheld.
4. CONFIDENTIAL INFORMATION. Executive acknowledges that: (a) he has been
involved with developing and implementing, and has had total access to,
information relating to marketing strategies, customer lists, customer
preferences, and other trade secrets and other confidential and proprietary
information of Xxxxxxx Company, including without limitation marketing,
information systems and records, business plans and strategies, and customer
data and information, and that all such information and the information,
observations and data relating to the Company and its subsidiaries which
Executive has obtained and shall obtain during the course of his employment with
the Company and its subsidiaries and its performance under this Agreement
(whether or not such information is or was developed by Executive)
(collectively, "Confidential Information") are the property of the Company and
its subsidiaries; (b) the period and nature of the restrictions contained in
Paragraphs 4 and 5 of this Agreement are reasonable and necessary to protect the
legitimate interests of Company; (c) such restrictions do not and will not
unreasonably impair Executive's ability to financially maintain a standard of
living that is acceptable to him; (d) Company will suffer loss, damage and
irreparable harm and injury if Executive fails to observe any of the
restrictions described in Paragraphs 4 or 5 and in any such case Company will be
without an adequate remedy at law; (e) Company has a legitimate business
interest in protecting the foregoing, which constitute trade secrets, valuable
confidential business information even if not qualifying as a trade secret,
substantial relationships with prospective and existing customers, sources of
business and relationships and customer goodwill associated with their ongoing
business; and (f) by reason of the foregoing, if Executive fails to observe any
covenant or restriction described and set
forth in Paragraphs 4 or 5 of this Agreement Company may, in addition to
pursuing any other right or remedy available to them, seek injunctive relief
against Executive. Executive agrees that he shall not use for his own purposes
or disclose to any third party any Confidential Information without the prior
written consent of the Company's CEO or the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's or Company management's acts or
omissions. Executive further agrees to take all appropriate steps (and to cause
its affiliates to take all appropriate steps) to protect such Confidential
Information against disclosure, misuse, espionage, loss and theft. In the event
Executive or its affiliates is required by law to disclose any such Confidential
Information, Executive or such affiliate, as the case may be, shall promptly
notify the Company's CEO and Board in writing, which notification shall include
the nature of the legal requirement and the extent of the required disclosure,
and shall cooperate with the Company to preserve the confidentiality of such
information consistent with applicable law. Executive shall deliver to the
Company at the end of the Employment Period, or at any other time the Company
may request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and other documentation (and copies thereof) relating to
the business of the Company and its subsidiaries which Executive may then
possess or have under his control. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether patentable or not) which
relate to the Acquired Assets or the actual or anticipated business, research
and development or existing or future products or services of the Company and
its subsidiaries and which are conceived, developed or made by him during the
Employment Period and at the direction of the Company ("Work Product") belong to
the Company. Executive shall promptly disclose such Work Product to the CEO and
the Board and perform all actions reasonably requested by the CEO and the Board
(whether during or after the Employment Period) to establish and confirm such
ownership (including, without limitation, assignments, powers of attorney and
other instruments).
5. NON-COMPETITION. Executive acknowledges that Executive is familiar
with the trade secrets and other Confidential Information of the Company and its
subsidiaries. Executive further acknowledges that his services have been of
special, unique and extraordinary value to the Company and its subsidiaries,
that Executive has been substantially responsible for the growth and development
of the Company and its subsidiaries and the creation and preservation of the
Company and its subsidiaries' goodwill. Executive acknowledges and agrees that
the Company would be irreparably damaged if Executive were to provide services
to any person or entity competing with the Company in violation of this
paragraph 5 and that such competition by Executive, person or entity would
result in a significant loss of goodwill by the Company. Executive further
acknowledges and agrees that the covenants and agreements set forth in this
paragraph 5 were a material inducement to the Company to enter into this
Agreement and the Merger Agreement and to perform its obligations hereunder and
thereunder, and that the Company would not obtain the benefit of the bargain set
forth in this Agreement and the Merger Agreement as specifically negotiated by
the Parties if Executive breached the provisions of this paragraph 5. Therefore,
in further consideration for the payment of the compensation to be paid to
Executive hereunder, and in order to protect the value of the Acquired Assets
(including the goodwill inherent therein as of the date hereof), Executive
agrees that:
(a) Subject to Section 5(c) below, during the Employment, and for a twelve
(12) month period following the termination of this Agreement (the
"Non-Competition Period"), Executive shall not have any affiliation (as defined
below) with any corporation, partnership or other business entity, enterprise or
other person or entity (other than the Company and its subsidiaries) having any
location within the United States that engages in the business (the "Business")
of manufacturing, distributing, marketing and/or selling lawn and garden
controls, insecticides, pesticides, fertilizer, plant food, soils, seed or any
other lines of products sold or offered for sale in the ordinary course of
business by any division or affiliate of the Company for consumer or home use
(the "Products"); PROVIDED THAT nothing contained herein shall be construed to
prohibit the Executive from purchasing up to an aggregate of 1% of any class of
the outstanding voting securities of any other entity whose securities are
listed on a national securities exchange or traded in the NASDAQ national market
system. For purposes of this paragraph 5(a), the term "AFFILIATION" shall mean
any direct or indirect interest in such entity, enterprise or other person or
entity, whether as an officer, director, employee, investor, partner,
shareholder, sole proprietor, trustee, consultant, agent, representative,
broker, finder, promoter, affiliate or otherwise;
(b) Subject to Section 5(c) below, during the Non-Competition Period,
Executive shall not, (i) contact, approach or solicit for the purpose of
offering employment to or hiring (whether as an employee, consultant, agent,
independent contractor or otherwise) or actually hire any person employed by the
Company or any subsidiary of the Company at any time during the Non-Competition
Period, without the prior written consent of the Company; (ii) call-on, solicit
or service any customer of the Company or any of its subsidiaries with respect
to the manufacturing of manufacturing, distributing, marketing and/or selling
the Products for consumer use; (iii) solicit or attempt to induce any customer
or other business relation of the Company or any subsidiary into any business
relationship which would be likely to materially harm the Company or any of its
subsidiaries or (iv) induce or attempt to induce any customer, supplier,
licensee or other business relation of the Company or any subsidiary thereof to
cease doing business with any such person or entity or in any way intentionally
interfere with the relationship between any such customer, supplier, licensee or
business relation of the Company or any subsidiary thereof.
(c) Executive's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be irreparably damaged
if Executive were to provide services to any person or entity in violation of
the provisions of this Agreement. In the event of an alleged or threatened
breach by the Executive of any of the provisions of this paragraph 5, the
Company or its successors or assigns may, in addition to all other rights and
remedies existing in its favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce or
prevent any violations of the provisions hereof (including the extension of the
Non-Competition Period by a period equal to the length of the violation of this
paragraph 5). In the event of a breach or violation by Executive of any of the
provisions of this paragraph 5, the Non-Competition Period described above shall
be extended beyond the period otherwise stated herein until such breach or
violation has been duly cured. Executive agrees that these restrictions,
including any such extension period, are reasonable.
(d) Executive acknowledges and agrees that the Company is engaged in the
Business throughout the United States, and that the covenants contained in this
Agreement are necessary to the protection of the Company's legitimate interests
in its trade secrets, customer base, and good will. Executive further
acknowledges and agrees that the non-competition covenants contained in this
Agreement will not prevent him from gainful employment and earning a livelihood
in other, non-competing activities and industries. If, at the time of
enforcement of any of the provisions of paragraph 5, a court holds that the
restrictions stated therein are unreasonable under the circumstances then
existing, the Parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area.
(e) Executive agrees that the covenants made in paragraph 5(a) and 5(b)
shall be construed as an agreement independent of any other provision of this
Agreement and shall survive any order of a court of competent jurisdiction
terminating any other provision of this Agreement.
6. OTHER REMEDIES. In the event of a material breach by the Executive of
any material provision of this Agreement which is not cured by Executive within
30 days after notice to it of such breach, in addition to any and all other
rights and remedies available to the Company, the Company shall cease making any
further payments to Executive hereunder.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the Company and its affiliates, successors and assigns and
shall be binding upon and inure to the benefit of Executive and its legal
representatives and assigns; provided that in no event shall Executive's
obligations to perform future services for the Company be delegated or
transferred by Executive without the prior written consent of the Company (which
consent may be withheld in its sole discretion). The Company may assign or
transfer its rights hereunder to any of its affiliates or to a successor
corporation in the event of merger,
consolidation or transfer or sale of all or substantially all of the assets of
the Company; provided, however, no such assignment or transfer shall relieve the
Company of its obligations hereunder.
8. MODIFICATION or WAIVER. No amendment, modification or waiver of this
Agreement shall be binding or effective for any purpose unless it is made in a
writing signed by the Party (with Board approval in the case of the Company)
against who enforcement of such amendment, modification or waiver is sought. No
course of dealing between the Parties to this Agreement shall be deemed to
affect or to modify, amend or discharge any provision or term of this Agreement.
No delay on the part of the Company or Executive in the exercise of any of their
respective rights or remedies shall operate as a waiver thereof, and no single
or partial exercise by the Company or Executive of any such right or remedy
shall preclude other or further exercises thereof. A waiver of right or remedy
on anyone occasion shall not be construed as a bar to or waiver of any such
right or remedy on any other occasion.
9. GOVERNING LAW. ALL ISSUES AND QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE EXHIBITS AND
SCHEDULES HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF MISSOURI, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICT OF LAW RULES OR PROVISIONS (WHETHER OF THE STATE OF MISSOURI OR ANY
OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF MISSOURI. THE PARTIES AGREE THAT ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT WILL BE INSTITUTED IN
THE CIRCUIT COURT OF ST. LOUIS COUNTY, MISSOURI, OR THE UNITED STATES DISTRICT
COURT FOR THE EASTERN DISTRICT OF MISSOURI, AND NO OTHER, AND THE PARTIES
FURTHER CONSENT TO THE PERSONAL AND EXCLUSIVE JURISDICTION OF EITHER SUCH COURT,
AND HEREBY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH PROCEEDING
AND ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM.
10. SEVERABILITY. Whenever possible each provision and term of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, then such provision or
term shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement;
provided that if a court having competent jurisdiction shall find that the
covenant contained in paragraph 5(a) hereof is not reasonable, such court shall
have the power to reduce the duration and/or geographic area and/or scope of
such covenant, and the covenant shall be enforceable in this reduced form.
11. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the Parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any Party.
12. TERMINATION BY EXECUTIVE.
(a) Executive may at any time terminate his employment hereunder by giving
the Company ninety (90) days prior written notice of Executive's intent to
terminate this Agreement. At the Termination Date, the Company shall have no
further obligation to Executive and Executive shall have no further rights or
obligations hereunder, except that Executive's obligations under Paragraphs 4
and 5 hereof shall survive the termination of the Agreement pursuant to this
Paragraph 12(a), and except for the Company's obligations under Paragraph 2 and
3 hereof for unpaid salary, bonus payments, and such benefits or unreimbursed
expenses that have accrued but have not been paid as of the Termination Date.
(b) The Executive shall have the right to terminate his employment with
the Company for Good Reason by written notice to the Company to that effect.
"Good Reason" means the occurrence (without the Executive's written consent) of
any of the following: (i) the Company shall have failed to perform a material
condition or covenant of this Agreement ("Company's Material Breach"); provided,
however, that termination for Company's Material Breach will not be effective
until Executive shall have given written notice specifying
the claimed breach and Company fails to correct the claimed breach within thirty
(30) days after the receipt of the applicable notice (but within twenty (20)
days if the failure to perform is a failure to pay monies when due under the
terms of this Agreement); or (ii) a requirement by the Company that the
Executive relocate his residence outside the St. Louis metropolitan area.
(c) In the event that the Executive shall terminate his employment for
Good Reason, as and for severance pay, the Company shall continue to pay to
Executive, on a monthly basis, his Base Salary as set forth in Section 2(a)
hereof in effect at the time of his termination less withholding as required by
law, for remaining term of this Agreement, PROVIDED THAT (i) prior to the
Company's commencing such payments, Executive and the Company sign a mutual
general release reasonably acceptable to the Company, and (ii) any provision of
Executive's current Confidentiality and Noncompetition covenants (as set forth
in Sections 4 and 5 of this Agreement) to the contrary notwithstanding,
Executive agrees that he shall continuously abide by such covenants for the
period that such payments are being made to Executive. The Company's obligations
pursuant to this Paragraph 12(c) shall terminate immediately if Executive
engages in conduct which is in violation of Paragraph 4 or 5 hereof, as
determined in good faith by the Board. Executive shall have no obligation to
mitigate his damages resulting from a termination for Good Reason.
13. TERMINATION FOR CAUSE. The Company shall have the right at any time to
terminate Executive's employment immediately for cause, which shall include any
of the following reasons:
(a) If Executive shall violate the provisions of Paragraphs 4 or 5 of this
Agreement, or shall fail to comply with any other material term or condition of
this Agreement or shall engage in any misconduct, neglect of duties or failure
to perform or act which materially and adversely affects the business or affairs
of the Company which is not cured within 30 days after notice to him of such
misconduct, neglect, or failure to perform.
(b) If Executive shall commit (i) a felony or (ii) an act of dishonesty,
willful mismanagement, fraud or embezzlement against the Company. Executive's
obligations under Paragraphs 4 and 5 hereof shall survive the termination of the
Agreement pursuant to this Paragraph 13. In the event Executive's employment
hereunder is terminated in accordance with this Paragraph, the Company shall
have no further obligation to make any payments to Executive hereunder except
for unpaid salary, bonus or unreimbursed expenses that have accrued but have not
been paid as of the Termination Date.
14. TERMINATION WITHOUT CAUSE.
(a) The Company shall have the right at any time to terminate Executive's
employment without cause during the term hereof (which shall not include a
termination pursuant to Paragraphs 12 or 13) by providing Executive with 90 days
written notice of the Company's intent to terminate this Agreement. Executive's
obligations under Paragraph 4 and 5 shall survive the termination of this
Agreement of Executive's employment under this Paragraph 14. In the event
Executive's employment hereunder is terminated in accordance with this
Paragraph, the Company shall have no further obligation to make any payments to
Executive hereunder except for unpaid salary, bonus or unreimbursed expenses
that have accrued but have not been paid as of the Termination Date except as
provided in section 14(b) of this Agreement.
(b) In the event that the Company shall terminate Executive's employment
during the term hereof without cause, as and for severance pay, the Company
shall continue to pay to Executive, on a monthly basis, his Base Salary as set
forth in Section 2(a) hereof in effect at the time of his termination less
withholding as required by law, for remaining term of this Agreement, PROVIDED
THAT (i) prior to the Company's commencing such payments, Executive and the
Company sign a mutual general release reasonably acceptable to the Company, and
(ii) any provision of Executive's current Confidentiality and Noncompetition
covenants (as set forth in Sections 4 and 5 of this Agreement) to the contrary
notwithstanding, Executive agrees that he shall continuously abide by such
covenants for the period that such payments are being made to Executive. The
Company's obligations pursuant to this Paragraph 14 shall terminate immediately
if Executive engages in
conduct which is in violation of Paragraph 4 or 5 hereof, as determined in good
faith by the Board. Executive shall have no obligation to mitigate his damages
resulting from a termination without cause.
15. EXECUTIVE'S REPRESENTATIONS. Executive represents and warrants to the
Company that (i) his execution, delivery and performance of this Agreement does
not and shall not conflict with, or result in the breach of or violation of, any
other agreement, instrument, order, judgment or decree to which it is a party or
by which it is bound, (ii) he is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be his valid and binding obligation,
enforceable in accordance with its terms. Executive hereby acknowledges and
represents that he has consulted with independent legal counsel regarding his
rights and obligations under this Agreement and that it fully understands the
terms and conditions contained herein.
16. SURVIVAL. The provisions of paragraph 4, paragraph 5, paragraph 9 and
this paragraph 16 of this Agreement shall survive notwithstanding any
termination of the Employment Period or Non-Competition Period.
17. NOTICE. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States Post Office mail, postage prepaid, certified mail,
return receipt requested, addressed to the other Party hereto at his or its
address shown below:
IF TO THE COMPANY:
United Industries Corporation
0000 Xxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
ATTN: General Counsel
WITH A COPY TO:
Xxxxxxxx Xxxxxx LLP
One XX Xxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
IF TO EXECUTIVE:
[NEEDED]_______________________
_______________________
_______________________
or at such other address as such Party may designate by ten days advance written
notice to the other party.
18. CAPTIONS. The captions used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and shall not be
deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no caption had been used in this Agreement.
19. COUNTERPARTS. This Agreement may be executed in counterparts, any one
of which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
UNITED INDUSTRIES CORPORATION
By:
--------------------------------
Its:
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EXECUTIVE
