EXHIBIT 10.15
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended And Restated Employment Agreement ("Agreement") is entered
into as of the 1st day of January, 2002 ("Effective Date") between United
Industries Corporation, a Delaware corporation ("UIC" or Company") and Xxxxxx X.
Xxxxx ("Executive").
WHEREAS, Executive and UIC are parties to an Employment Letter Agreement
dated October 25, 1999, as amended by Amendment dated May 31, 2001 and as
further amended by Amendment dated July 20, 2001; and
WHEREAS, UIC and Executive desire to amend and restate the terms and
conditions of Executive's employment with UIC from and after the Effective Date.
NOW THEREFORE, Executive and UIC, in exchange for good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, and intending to be legally bound, hereby agree as follows;
1. POSITION: Executive shall be the Chairman of the Board, Chief Executive
Officer and President of UIC. Executive shall also be a member of the UIC Board
of Directors ("Board").
2. REPORTING STRUCTURE: Executive shall report to UIC's Board.
3. BASE SALARY: Executive's Base Salary will be at the annualized rate of
$500,000:00, payable in equal monthly increments. Subsequent increases in base
salary shall be as determined by the Compensation Committee of the Board.
4. INCENTIVE COMPENSATION: Executive shall be a participant in an incentive
compensation plan, with payment based on UIC's attainment of certain financial
and operational targets. Executive shall be eligible to receive an incentive
bonus of (a) thirty percent (30%) of Base Salary if UIC achieves at least 90% of
Target EBITDA, (b) sixty percent (60%) of Base Salary if UIC achieves at least
100% of Target EBITDA, or (c) 100% of Base Salary if UIC achieves 110% of Target
EBITDA. If UIC achieves between 90% and 100% Target EBITDA, Executive's
Incentive Compensation will increase by an amount equal to the product of (A)
Base Salary multiplied by (B) 3% multiplied by (C) the number of percentage
points by which the Company's actual EBITDA for the year in question exceeds 90%
of the Target EBITDA for such a year up to a maximum of 100% of Target EBITDA.
If UIC achieves between 100% and 110% Target EBITDA, Executive's Incentive
Compensation will increase by an amount equal to the product of (A) Base Salary
multiplied by (B) 4% multiplied by (C) the number of percentage points by which
the Company's actual EBITDA for the year in question exceeds 100% of the Target
EBITDA for such a year up to a maximum of 110% of Target EBITDA. As used herein
"Target EBITDA" is defined as the EBITDA specified in UIC's Annual Operating
Plan as approved by the Board on an annual basis and as may be adjusted by the
Board in its reasonable discretion to account for acquisitions and dispositions.
5. CHANGE OF CONTROL:
(a) STOCK OPTIONS. In the event there is a Sale of UIC (as defined in
Section 4.1(b)(iii)(w-z) of the UIC Stock Option Agreement), vesting of
options will be accelerated as provided in the UIC Stock Option Agreement.
(b) SEVERANCE IF SALE OF UIC. During the term of this Agreement, if a Sale
of UIC shall occur, as the term Sale is defined in Section 4.1(b)(iii)(w-z)
in the UIC Stock Option Agreement, and if Executive's employment with UIC
is terminated by UIC for any reason other than for Cause during the period
beginning three (3) months prior to and ending twenty-four (24) month
period following such Sale, then in lieu of the severance provisions set
forth in Section 6 of this Agreement, UIC will pay Executive:
(i) base salary accrued through Executive's date of termination;
(ii) accrued incentive compensation determined in accordance with
UIC's incentive compensation plan in effect on the Sale date, on a
pro-rata basis for the fiscal year in which the Sale occurs, and
(iii) as severance compensation UIC shall continue to pay to
Executive, on a monthly basis, the sum of (i) Executive's Base Salary
as set forth in Section 3 hereof in effect at the time of his
termination divided by twelve (12) plus (ii) Incentive Compensation
calculated at the rate of sixty percent (60%) of his Base Salary in
effect at the time of his termination divided by twelve (12), less
withholding as required by law, for twenty-four (24) months, beginning
on the last day of the month following the month in which Executive's
employment terminates, provided that:
(1) prior to UIC's commencing such payments, Executive signs a
mutual general release of UIC in substantially the form attached
hereto as EXHIBIT A, and
(2) any provision of Executive's current Noncompetition and
Nonsolicitation covenants (as set forth in Item 9 Exhibit to the
Agreement) to the contrary notwithstanding, Executive agrees that
he shall continuously abide by such covenants for twenty-four
(24) months from the date his employment terminates by reason of
such Sale.
UIC shall calculate the aggregate amount of the foregoing monthly
payments required to be made to Executive and shall place such sum,
without discount, in a reasonable and customary escrow account to
secure UIC's payment of the foregoing monthly payment obligation to
Executive under this Agreement. The Escrow Agent shall make the
monthly payments to Executive required hereunder to Executive from
such escrow. Executive shall also receive continuation of fully paid
(i) health insurance coverage for Executive and his family members,
(ii) Disability Insurance, and (iii) Life Insurance at the level in
effect upon
2
termination of Executive for a period of the greater of two (2) years
or the remaining term of this Agreement.
(c) If, as a result of the vesting of options pursuant to Section 5(a) of
this Agreement, or any other payment pursuant to this Agreement or any
other agreement with UIC or its affiliates, it is determined that any
payment, distribution, acceleration or benefit received or to be received
by Executive from UIC pursuant to this Agreement or any option plan or
other plan maintained by UIC or its Affiliates ("Payments") would be
subject to the excise tax imposed Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code") (such tax referred to as the "Excise
Tax"), then Executive shall be entitled to receive an additional payment
from UIC (the "Excise Tax Gross-up Payment"), in an amount such that the
net amount retained by Executive, after the calculation and deduction of
any Excise Tax on the Payments (together with any penalties or interest,
that have been or will be imposed on Executive in Connection therewith) and
any federal, state and local income taxes, Excise Taxes and payroll taxes
(including the tax imposed by Section 3101(b) of the Code) on the Excise
Tax Gross-up Payment provided for in this Section 5 shall be equal to the
Payments. In computing the amount of this payment, it shall be assumed that
the Executive is subject to tax by each taxing jurisdiction and at the
highest marginal tax rate in the respective taxing jurisdiction of
Executive, taking into account the city and state in which Executive
resides, but giving effect to the tax benefit, if any, which Executive may
enjoy to the extent that any such taxes deductible in determining the tax
liability of any other taxing jurisdiction (provided at the highest
marginal tax rate for federal income tax purposes shall be determined under
Section 1 of the Code). All determinations required to be made under this
Section 5, including whether and when an Excise Tax Gross-up Payment is
required in the amount of such Excise Tax Gross-up Payment and the
assumptions to be utilized in arriving at such determination shall be made
by UIC's independent auditors which shall provide details supporting
calculations both to UIC and Executive within fifteen (15) days after UIC
makes any Payments to Executive. In the event that the Internal Revenue
Service, on audit asserts that Executive has made an underpayment of Excise
Tax and Executive is required (by reason of settlement or otherwise) to
make a payment of any Excise Tax or if Executive is required to make one or
more payments of Excise Tax to the IRS (and/or interest on penalties
therein) on the filing of his original or amended tax returns which exceed
the amounts taken into account in determining the initial Excise Tax
Gross-up Payment made pursuant to this Section 5, then in either of such
events, any such underpayment calculated in accordance with and in the same
manner as the Excise Tax Gross-up Payment shall be promptly paid by UIC to
or for the benefit of Executive. In addition, UIC will pay Executive an
amount equal to any penalties, interest, or additions to be assessed
against him as a result of the underpayment which amount shall be
grossed-up for any federal, state, local or Excise Tax payable with respect
to such penalties, interest or additions to tax such that the Executive
receives a net amount equal to the penalties, interest, or additions to tax
assessed against him (determined in the same manner as the other
calculations described in this Section 5).
6. SEVERANCE. UIC acknowledges that Executive may terminate his employment at
any time, with or without cause, by notice to UIC to that effect. Executive
agree to continue to
3
perform the duties of his employment for such reasonable period as UIC may
request, not exceeding 30 days, after the date of his termination notice to UIC,
during which period UIC shall pay Executive one-twelfth (1/12) of his base
Salary and continue his benefits then in effect.
Executive acknowledge that UIC may terminate his employment at any time, with or
without Cause (as defined in Section 10 of this Agreement), by notice to
Executive to that effect. Executive's entitlement to severance pay shall be as
stated below.
Except as otherwise provided in Section 5(b) with respect to severance arising
from a Sale of UIC, if (a) Executive is terminated by UIC without Cause, or (b)
Executive terminates this Agreement because of Constructive Termination (as
defined in Section 10 of this Agreement), as severance compensation UIC shall
continue to pay to Executive, on a monthly basis, the sum of (i) his Base Salary
as set forth in Section 3 hereof in effect at the time of his termination
divided by twelve (12) plus (ii) the average of Incentive Compensation paid to
or, if not yet paid for the preceding year, owing to Executive for the two (2)
years immediately preceding his termination divided by twelve (12)],less
withholding as required by law, for the greater of twenty-four (24) months or
the remaining term of this Agreement, provided that (1) prior to UIC's
commencing such payments, Executive and UIC sign a mutual general release
substantially the form attached hereto as EXHIBIT A, and (2) any provision of
Executive's current Noncompetition and Nonsolicitation covenants (as set forth
in Section 9 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. In addition, UIC shall pay Executive
incentive compensation earned but unpaid as of the date of termination (prorated
for the period of time during the applicable bonus year that Executive worked
from January 1st to date of termination. Executive shall also receive
continuation of fully paid (i) health insurance coverage for Executive and his
family members, (ii) Disability Insurance, and (iii) Life Insurance at the level
in effect upon termination of Executive for a period of the greater of two (2)
years or the remaining term of this Agreement. Executive shall not receive such
severance payments if Executive is terminated for Cause, as defined in SECTION
10 of this Agreement.
In the event Executive is terminated by UIC without cause, and during the period
of time he is receiving severance benefits hereunder a Sale of UIC shall occur,
as the term Sale is defined in Section 4.1(b)(iii)(w-z) in the UIC Stock Option
Agreement, immediately prior to or upon the closing of the transaction in which
such a Sale shall occur, UIC shall calculate the aggregate amount of the
remainder of the monthly payments required to be made to Executive pursuant to
this Section 6 and shall place such sum, without discount, in a reasonable and
customary escrow account to secure UIC's and/or its successor's payment of the
remainder of such monthly payment obligation to Executive. The Escrow Agent
shall make the remainder of the monthly payments to Executive required under
this Section 6 to Executive from such escrow.
7. BUSINESS ETHICS
UIC is an "equal opportunity employer", and does not practice and will not
tolerate unlawful discrimination or harassment of employees or applicants for
employment. Should Executive ever encounter such a situation, Executive agrees
to promptly report, in writing, any incident of which he becomes aware, whether
or not directly affecting him, which he reasonably believes
4
involves discrimination or harassment of any kind. UIC agrees to fully
investigate or take whatever remedial or disciplinary actions may be
appropriate. Every such written report may be delivered or mailed in a sealed
envelope addressed "Personal and Confidential" to the attention of the General
Counsel of United Industries Corporation.
UIC strives to maintain the highest levels of professional behavior in all
aspects of our business and also to provide a safe and healthful environment in
which to work. Towards this end, UIC may from time to time deem appropriate to
conduct certain tests or examinations. These tests would all be at UIC expense
and by agreeing to submit to these programs, Executive is indicating both his
willingness to participate and his support for these goals. Subject to whatever
legal restrictions or prohibitions may be applicable at the time, if any: (a)
Executive authorizes every person involved in administering or conducting such
tests or examinations to furnish full reports to UIC, and (b) such tests and
examinations may include, but are not limited to polygraph examinations (as
permitted under law), testing or examination to determine the presence of drugs,
alcohol, contagious or non-contagious disease, or physical or mental defect or
impairment, and also testing and examination relevant to aptitude in respect of
employment opportunities, advancement, classification, and reclassification.
8. INTELLECTUAL PROPERTY
Executive acknowledge that UIC is the sole owner of all inventions, concepts,
processes, methods, ideas, formulae, and techniques conceived or developed by
Executive, alone or with others, during the period of Executive's employment,
whether or not during the usual hours Executive's employment, which may be
applicable to or useful in any business in which UIC or any of its divisions is
engaged at any time during the period of Executive's employment. Executive agree
to cooperate with UIC, both during the period of Executive's employment and
thereafter, in respect of whatever patent, trademark, copyright or other legal
protection UIC desires to obtain. UIC may assign its rights under this Agreement
to any party which acquires all or substantially all of the business or assets
of UIC or any of its divisions.
9. NONCOMPETITION, NONSOLICITATION, AND CONFIDENTIALITY.
(a) NONCOMPETITION: During the period (the "NONCOMPETE PERIOD") beginning
on Executive's first day of work at UIC and ending on the later of (x) the
first anniversary of Executive's termination date and (y) if severance
payments are owed to Executive by UIC pursuant to Section 5 or 6 of this
Agreement, the length of time between Executive's termination date and the
last day of the period of time which the severance payments represent (not
to exceed three years after Executive's termination date), Executive shall
not, without the prior written consent of UIC (which consent may be granted
or withheld in UIC's sole discretion) directly or indirectly, participate
in any line of business in which UIC is actively engaged or any line of
business competitive with UIC anywhere in the United States and any other
country in which UIC does business (the "COMPETITIVE ACTIVITIES").
For purposes of this letter agreement, the term "PARTICIPATE" includes any
direct or indirect interest in, or providing any direct or indirect
assistance (whether financial,
5
advisory or otherwise) to any enterprise (or any affiliate thereof),
whether as an officer, director, employee, partner, member, sole
proprietor, agent, representative, independent contractor, consultant,
creditor, stockholder, owner or otherwise; provided that the term
"Participate" shall not include ownership of less than 2% of the Common
Stock of a publicly-held corporation whose Common Stock is traded on a
national securities exchange or in the over-the-counter market.
(b) NONSOLICITATION: During the Noncompete Period, Executive (a) shall
not, directly or indirectly 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
known by him to be employed by UIC during the Noncompete Period and (b)
shall not induce or attempt to induce any customer or other business
relation of UIC to cease doing business with UIC or to engage in any
business relationship which might materially harm UIC.
CONFIDENTIALITY: Executive acknowledge that certain of the information,
observations and data relating to UIC which Executive may possess or obtain
as an employee, officer, director or stockholder of UIC is the confidential
and proprietary property of UIC ("CONFIDENTIAL INFORMATION"). Executive
agrees that he shall not, except in connection with the performance of his
duties as an employee and officer and director of UIC hereunder, directly
or indirectly, use for his own purposes or use for or disclose to any third
party any of such Confidential Information without the prior written
consent of UIC (which consent may be granted or withheld in UIC's sole
discretion), unless and to the extent that the aforementioned matters (i)
become generally known to an available for use by the public other than as
a result of Executive's acts or omissions to act, or (ii) Executive is
required by order of a court of competent jurisdiction (by subpoena or
similar process) to disclose or discuss any Confidential Information
(provided that in such case, Executive shall promptly inform UIC of such
order, shall cooperate with UIC at UIC's expense in attempting to obtain a
protective order or to otherwise restrict such disclosure, and shall only
disclose Confidential Information to the minimum extent necessary to comply
with any such court order).
The parties hereto acknowledge and agree that UIC will suffer irreparable
harm from Executive's breach of any of the covenants or agreements
contained in this Section. In the event of an alleged or threatened breach
by Executive of any of the provisions of this Section, UIC or its
successors or assigns may, in addition to all other rights and remedies
existing in its or their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violations of the provisions hereof. Executive
acknowledges and agrees that the restrictions contained in this Section are
reasonable. If, at the time enforcement is sought of any of the provisions
of this Section, a court holds that the restrictions stated herein are
unreasonable under the circumstances then existing, the parties agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Executive agrees that the covenants made in this Section 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
6
provision of this Agreement, provided that during such period in which the
covenants of this section shall continue, and Executive continues to abide
by the obligations imposed upon him hereunder, UIC pays Executive the
remainder of the severance obligation UIC may have or may have otherwise
had to him under sections 5 or 6 of this Agreement, unless prior thereto
Executive shall have breached any of his obligations required of him as a
condition precedent to the continued right to such payments.
10. DEFINITIONS OF CAUSE AND CONSTRUCTIVE TERMINATION
a. As used herein, "CAUSE" for termination by the Company of Executive's
employment with the Company means (a) material misappropriation of the
Company's property, interests or opportunities; (b) violation of reasonable
directions of the Company to Executive which directions are consistent with
Executive's duties and responsibilities; (c) willful misconduct which
causes material damage to the Company or its finances or to its business
relationships or reputation in the industry or the community; (d) breach or
nonperformance by Executive of his obligations provided for in this
Agreement or in any other material agreement between Executive and the
Company or reasonably implied by his position; (e) the habitual drug
addiction or habitual intoxication of Executive which negatively impacts
his job performance or Executive's failure of a Company-required drug test;
or (f) failure of Executive to reasonably cooperate with an examining
physician as may be required by any agreement between Executive and the
Company; PROVIDED, HOWEVER, with respect to items (b), (c) and (d) above,
"Cause" shall be deemed to have occurred only if and after the Board of
Directors shall have determined that a breach of any of items (b), (c), or
(d) shall have occurred, the Board of Directors shall have promptly
provided Executive with written notice giving reasonable detail of the
alleged breach and a suggested course of action to cure the alleged breach
and Executive shall have not cured the alleged breach within 20 days after
said written notice from the Board of Directors.
b. As used herein, "CONSTRUCTIVE TERMINATION" shall mean: (a) Executive's
rate of salary or bonus shall have been reduced below that set forth in
Section 3 of this Agreement; (b) Executive shall have suffered a reduction
in his title, duties or responsibilities, or shall have failed to be
elected to the Board of Directors, or shall have been removed from the
Board other than in connection with his Termination for Cause; (c)
Company's headquarters shall have been moved from its current site to a
site more than 75 miles from its current site without the express prior
written consent of Executive; (4) Company shall have breached or failed to
perform any of its material obligations under this Agreement or under any
other material agreement between Executive and the Company.
11. VACATIONS: Executive shall be entitled to four weeks of paid vacation per
year.
12. OTHER BENEFITS (INCLUDING UIC's EXECUTIVE DEFERRED COMPENSATION PLAN):
Unless otherwise specified in this letter, Executive's benefits will consist of
whatever benefit programs may be in effect from time to time for UIC executives,
subject to eligibility requirements as
7
specified in the applicable benefit plans. Benefit programs may be increased,
decreased, changed or discontinued at any time.
Executive shall also receive an auto allowance of One Thousand Dollars
($1,000.00) per month.
On a one time only basis, and during calendar year 2002, Executive shall also
receive the reimbursement for reasonable moving costs and real estate
commissions or fees in connection with the relocation of his residence from
00000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxxxxxx XX 00000 to another location in the
St. Louis Metropolitan area. Accordingly, UIC shall waive the eligibility
requirements of, and Executive shall receive the benefits of, the Company's
Program 4 Homeowner Relocation Reimbursement Policy ("Policy") in connection
with the relocation of his residence from 00000 Xxxxxxxx Xxxxx Xxxxx,
Xxxxxxxxxxxx XX 00000 to another location in the St. Louis Metropolitan area,
excluding therefrom the following sections: (i) Homefinding Trip; (ii)
Homefinding Assistance;; (iii) Rental Assistance; (iv) Temporary Living; (v)
Shipment of Household Goods and Auto; and (vi) Final Moving Trip.
13. ARBITRATION OF UIC STOCK VALUATION: Notwithstanding any provision to the
contrary in the UIC 2001 Stock Option Plan or the UIC 1999 Stock Purchase Plan,
UIC agrees to submit to arbitration any disputes between Executive and UIC
regarding the fair market value of UIC common stock. The arbitration shall be
conducted in St. Louis MO in accordance with the rules of the American
Arbitration Association.
14. TERM: This Agreement shall be in effect on the Effective Date and shall
continue for an initial period of three (3) years from such date, unless sooner
terminated by either party in the manner set forth herein. On the expiration of
the initial term hereof or any subsequent renewal term, this Agreement shall be
automatically renewed and extended for successive periods of one (1) year each,
unless either party shall have given the other party written notice of the
non-renewal of this Agreement not less than sixty(60) days prior to the
expiration of the then current term of this Agreement. Failure of either party
to automatically renew this Agreement shall not be construed to be either an
involuntary termination of Executive by UIC without cause or a constructive
termination of his employment with UIC by Executive.
15. ASSIGNMENT: This Agreement may not be assigned by UIC except to an
affiliate of UIC, provided, however, that if the Company shall merge or effect a
share exchange with or into, or sell or otherwise transfer substantially all its
assets to, another corporation, UIC may, by operation of law or otherwise,
assign its rights hereunder to such successor corporation and cause such
corporation to assume UIC's obligations under this Agreement without obtaining
the prior consent of Executive.
16. NOTICES: Any notice or other communications under this Agreement shall be
in writing, signed by the party making the same, and shall be delivered
personally or sent by certified mail, postage prepaid, return receipt requested
or sent by a nationally recognized overnight courier or delivery service,
addressed as follows:
8
If to Executive: Xxxxxx X. Xxxxx
00000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxxxx XX 00000
With a copy to: Xxx Xxxxxxxx, Esq.
Xxxx, Xxxxxxxx
The Tower at Erieview
Xxxxx 0000
Xxxxxxxxx XX 00000-0000
or to such other address as may be furnished by one party to the other in
writing.
If to UIC: United Industries Corporation
0000 Xxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
ATTN: General Counsel
or to such other address as may be furnished UIC to Executive. All such notices
shall be deemed given on the date personally delivered, mailed or couriered
17. GOVERNING LAW: This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Missouri.
18. SEVERABILITY: Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid, but if any one or more
of the provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability for any such provisions in every other respect and of the
remaining provisions of this Agreement shall not be in any way impaired.
19. MODIFICATION: No waiver or modification of this Agreement or of any
covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding, arbitration or litigation between the parties hereunder, unless such
waiver or modification is in writing, duly executed as aforesaid and the parties
further agree that the provisions of this section may not be waived except as
herein set forth.
20. ENTIRE AGREEMENT: This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter contained herein. There are no
restrictions, promises, covenants or undertakings, other than those expressly
set forth herein. This Agreement supersedes any and all prior employment
agreements between Executive and UIC.
9
IN WITNESS WHEREOF, the parties hereto have executed this Amended And
Restated Employment Agreement as of the Effective Date above written.
UNITED INDUSTRIES CORPORATION XXXXXX X. XXXXX
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxx X. Xxxxx
Chairman of the Compensation
Committee of the Board of Directors
10
