Exhibit 10.25
UNITED INDUSTRIES CORPORATION
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "AGREEMENT"), dated as of June
29, 1999, is entered into by and between United Industries Corporation, a
Delaware corporation (the "COMPANY"), and Xxxxxxx X. Xxxxx ("EXECUTIVE").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Management Agreement (as defined below).
WHEREAS, the Company and Executive are parties to that certain
Management Agreement attached hereto as ANNEX A, dated as of January 20, 1999
(the "MANAGEMENT AGREEMENT"), pursuant to which Executive accepted an offer of
employment from the Company and pursuant to which Executive purchased, and the
Company sold, 100,000 shares of the Company's Class A Voting Common Stock and
100,000 shares of the Company's Class B Non-Voting Common Stock (collectively,
the "COMMON STOCK");
WHEREAS, in partial payment for the Common Stock, Executive
issued two Promissory Notes in favor of the Company with initial principal
amounts of $250,000 and $500,000, respectively (the "NOTES") and entered into a
Pledge Agreement (the "PLEDGE AGREEMENT") with the Company pursuant to which
Executive pledged the Common Stock to the Company to secure Executive's
obligations under the Notes. The principal amount, but not the interest thereon,
of the $250,000 Note has been paid in full;
WHEREAS, simultaneously with the execution of the Management
Agreement, the Company and Executive entered into a Stock Option Agreement (the
"STOCK OPTION AGREEMENT") pursuant to which the Company granted Executive
certain options to acquire shares of the Company's Class A Voting Common Stock
and Class B Non-Voting Common Stock;
WHEREAS, Executive now desires to pursue other business
interests and opportunities and to therefore resign his employment with the
Company as President, CEO and a member of the Board; and
WHEREAS, Executive and the Company desire to set forth the
mutually agreed upon terms of Executive's separation from the Company;
NOW THEREFORE, based upon mutually satisfactory negotiations
and good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and reflected herein, and intending to be legally bound,
notwithstanding any terms to the contrary in the Management Agreement, the
Option Agreement, the Pledge Agreement and/or the Note the parties hereto agree
as follows:
1. RESIGNATION. Executive hereby resigns all of his positions with the
Company as President, CEO and a member of the Board, effective as of 5PM on June
29, 1999, which date shall be the "Termination Date" described in Section 2(a)
of the Management Agreement.
2. PAYMENT OF BASE SALARY AND BONUS.
(a) Executive shall be entitled to receive his Base Salary
through January 31, 2002 together with the Benefits currently being
provided to Executive under the Company's existing plans, but only to
the extent any such Benefits are provided pursuant to Company plans
which allow Executive to participate after he ceases to be an employee
of the Company.
(b) Executive shall be entitled to receive a bonus of $95,000
in respect of fiscal 1999. No other bonuses will be payable or
contemplated for fiscal 1999 or any previous or subsequent period.
(c) Any amounts owed by the Company to Executive pursuant to
this SECTION 2 shall be paid at such times and in such a manner as the
Company otherwise pays executive salaries and bonuses (with the Company
retaining the right to prepay all or any portion of such amount without
discount at any time in its sole discretion). Notwithstanding the
foregoing, the $95,000 bonus payable under SECTION 2(b) will be paid no
later than April 1, 2000.
3. TREATMENT OF STOCK OPTIONS. All of the stock options granted to
Executive pursuant to the Option Agreement shall expire immediately on the
Termination Date and shall not be exercisable thereafter.
4. REPURCHASE OF COMMON STOCK. Pursuant to Section 8 of the Management
Agreement, the Company hereby notifies Executive that it will exercise the
Repurchase Option with respect to 50,000 shares of Class A Voting Common Stock
and 50,000 shares of Class B Non-Voting Common Stock for an aggregate Repurchase
Price equal to the sum of the outstanding principal amount of the $500,000 Note
together with all accrued but unpaid interest on both Notes. The Company shall
pay the Repurchase Price pursuant to SECTION 5 hereof. The Repurchase Closing
shall take place on the Termination Date at the Company's headquarters, and
Executive hereby waives compliance by the Company with the time period set forth
in Section 8(d) of the Management Agreement. The parties hereto agree that the
Company retains the right, in its sole discretion, to exercise the Repurchase
Option with respect to the remaining Executive Securities in accordance with the
terms of Section 8 of the Management Agreement, which provides for a purchase
price equal to Fair Market Value, as more fully detailed therein.
5. TREATMENT OF NOTE AND PLEDGE AGREEMENT. All amounts due under the
Note (including the principal amount thereof as well as all accrued but unpaid
interest thereon) shall become immediately due and payable upon the Termination
Date. The Company shall apply the Repurchase Price set forth in SECTION 4
against such amounts and in full satisfaction of such amounts, and Executive
acknowledges that the entire Repurchase Price is being used for such purposes.
At the Repurchase Closing, the Company shall return the Note to Executive marked
paid in full. Pursuant to Section 8 of the Pledge Agreement, the Company shall
take all necessary action required to release any security interest the Company
has with respect to the Common Stock and shall return to Executive the
certificates representing the shares of Common
Stock not being repurchased by the Company pursuant to SECTION 4.
6. RELEASE. As a condition precedent to the Company's obligation to
make any payments to Executive hereunder, Executive shall execute and deliver to
the Company the release attached hereto as ANNEX B and shall not thereafter
revoke such execution and delivery (the "RELEASE").
7. NONCOMPETITION, NONSOLICITATION, CONFIDENTIALITY. Executive
acknowledges, confirms and agrees that the terms of Section 6 of the Management
Agreement shall remain in full force and effect after the Termination Date and
that the Noncompete Period shall end on January 31, 2002.
8. NON-DISPARAGEMENT. Each of Executive and the Company agree that they
will not at any time disparage or impugn the reputation, damage the goodwill or
the business of, or make any derogatory, embarrassing or harmful public or
private communications or statements (a) in the case of Executive, concerning
the Company or any of its employees, executives, directors, shareholders,
customers or suppliers and (b) in the case of the Company, concerning Executive.
In addition, Executive agrees not to make any statements to the press or issue
any public statement regarding or relating to the Company or its affiliates or
shareholders.
9. TRANSITION EXPENSES.
(a) The Company shall pay for Executive's actual and
reasonable costs of moving his personal property from St. Louis to
North Carolina or other destinations of similar mileage (subject to the
Company's policies with respect to reporting and documentation),
grossed-up for any resulting income tax liability recognized by
Executive with respect to any such payments by the Company.
(b) The Company shall promptly reimburse Executive for
Executive's actual costs for storage of his personal property in St.
Louis for a period not to exceed 120 days after the Termination Date
(subject to the Company's policies with respect to reporting and
documentation).
(c) The Company currently rents an executive apartment in St.
Louis for the benefit of Executive. At Executive's request, the Company
will continue for executive's benefit the apartment lease for up to 3
months following the Termination Date (or such other period as
requested by Executive not to exceed the term of the lease which
expires on December 31, 1999) so long as Executive reimburses the
Company for all costs and expenses (including, without limitation,
rent, utilities, telephone and other charges) associated therewith as
and when due. Executive's obligation to reimburse the Company for such
rental costs and expenses shall commence on July 1, 1999 and shall
continue with respect to all costs and expenses incurred thereafter
until Executive provides the Company with notice of the termination of
his occupancy and vacates the apartment.
(d) The Company shall purchase for $300,000 an option from
Executive and his spouse to acquire all of Executive's and his spouse's
rights and obligations, as they
may exist from time to time, under the Sale Contract between Executive,
his spouse and Xxxxxx Development Incorporated dated April 30, 1999
covering Lot 12 of the Ballantine Subdivision in St. Louis, Missouri
(the "Real Estate Contract"). The Company may, in its sole discretion,
exercise its option to acquire the Real Estate Contract at any time
prior to October 15, 1999 by delivering written notice to Executive
setting forth the date of exercise and the documentation required to
fully assign the Real Estate Contract to the Company. If the Company
elects to so exercise its option, the Company will deliver to Executive
an additional $50,000 in full payment of the exercise price and the
Company, Executive and his spouse will timely enter into assignment
documents in form and substance satisfactory to the Company. The
Executive may terminate the exercise period on two days written notice
to the Company, in which case the Company may exercise its option in
its sole discretion during that two day period for a reduced price of
$25,000 in full payment of the exercise price, at which time the
Company, Executive and his spouse will timely enter into assignment
documents in form and substance satisfactory to the Company. In no
event does or will the Company directly or indirectly assume or
otherwise become responsible for any obligations or liabilities with
respect to the Real Estate Contract by virtue of its execution or
delivery of this Agreement or the performance of its obligations
hereunder. Any obligation of the Company with respect to the Real
Estate Contract will be created if, and only if, the Company delivers
written notice of its election to exercise the option to acquire the
Real Estate Contract and any such obligations of the Company, if any,
will be defined in the assignment documents if and when executed and
delivered by the Company in its sole discretion.
10. NOTICES. Any notice provided for in this Agreement shall be given
in accordance with Section 13 of the Management Agreement.
11. GENERAL PROVISIONS.
(a) EXPENSES. The Company will pay the reasonable and
documented hourly legal fees and legal expenses of Executive's counsel
in connection with the negotiation and execution of this Agreement.
(b) CONTINUING COMPLIANCE. The Company's obligation to make
any payments pursuant to this Agreement are expressly conditioned upon
Executive's continued and continuing compliance with each of the terms
and conditions of this Agreement, the Release (as defined below) and
Section 6 of the Management Agreement.
(c) TERMINATION. The provisions of Sections 2, 4 and 9 of this
Agreement shall terminate and be of no further force and effect at such
time as both parties hereto have fully discharged their covenants and
agreements made hereunder. All other provisions of this Agreement shall
continue and be in full force and effect notwithstanding the
termination of any such section.
(d) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality
or unenforceability shall not affect any other provision or any other
jurisdiction, but this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
(e) COMPLETE AGREEMENT. This Agreement, those documents
expressly referred to herein and other documents of even date herewith
embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may
have related to the subject matter hereof in any way, including,
without limitation, the Management Agreement, the Option Agreement, the
Pledge Agreement and the Note; PROVIDED that Sections 6, 8, 12, 13 and
14 of the Management Agreement shall continue in full force and effect
notwithstanding the execution of this Agreement. EXECUTIVE EXPRESSLY
ACKNOWLEDGES AND CONFIRMS THAT FROM AND AFTER THE TERMINATION DATE THE
COMPANY WILL NOT HAVE ANY OBLIGATIONS OR LIABILITIES TO PAY ANY AMOUNTS
OR PERFORM ANY DUTIES TO OR WITH RESPECT TO EXECUTIVE UNDER ANY
AGREEMENT OR UNDERSTANDING EXCEPT FOR (I) THE EXPRESS PAYMENTS AND
DUTIES SET FORTH ON THE FACE OF THIS AGREEMENT (II) ANY DUTIES AND
OBLIGATIONS ARISING AS A CONSEQUENCE OF THE PROVISIONS OF THAT CERTAIN
STOCKHOLDERS AGREEMENT BY AND AMONG THE COMPANY, EXECUTIVE AND CERTAIN
OTHER PARTIES THERETO DATED AS OF JANUARY 20, 1999, AS AMENDED FROM
TIME TO TIME, AND (III) ALL OBLIGATIONS AND DUTIES SET FORTH IN THE
RELEASE.
(f) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of
which taken together constitute one and the same agreement.
(g) SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by and against Executive, the Company and their respective
successors and assigns; it being understood that this Agreement may not
be assigned by either party (except for an assignment by the Company to
a wholly-owned subsidiary of the Company) without the prior written
consent of the other party hereto and that a change of control does not
constitute an assignment hereunder.
(h) GOVERNING LAW. THE LAWS OF THE STATE OF MISSOURI SHALL
GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE EMPLOYMENT OF EXECUTIVE,
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. ALL OTHER 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 DELAWARE,
WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS
(WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF DELAWARE.
(i) REMEDIES. Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to
recover damages and costs (including reasonable attorney's fees) caused
by any breach of any provision of this Agreement and to exercise all
other rights existing in its favor. The parties hereto agree and
acknowledge that money damages would not be an adequate remedy for any
breach of the provisions of this Agreement and that any party may in
its sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.
(j) AMENDMENT AND WAIVER. The provisions of this Agreement may
be amended and waived only with the prior written consent of the
Company and Executive.
(k) THIRD-PARTY BENEFICIARY. There are no beneficiaries to
this Agreement other than the signatories hereto.
(l) BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or
legal holiday in the state in which the Company's chief executive
office is located, the time period shall be automatically extended to
the business day immediately following such Saturday, Sunday or legal
holiday.
(m) REORGANIZATIONS. Nothing in this Agreement shall preclude
the Company from consolidating or merging into or with, or transferring
all or substantially all of its assets to, another corporation;
PROVIDED that the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume
this Agreement. As used in this Agreement, "COMPANY" shall mean the
Company, as defined above, and any successor to its business and/or
assets as aforesaid which assumes this Agreement by operation of law or
otherwise.
(n) WITHHOLDING AND SET-OFF. All amounts payable to Executive
hereunder shall be subject to customary required withholding by the
Company as determined by the Company in a manner consistent with the
Company's withholding policies and procedures in effect for its
executive officers.
(o) MITIGATION BY EXECUTIVE. In no event shall Executive be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to Executive under any of the
provisions of this Agreement and such amounts shall not be
reduced whether or not Executive obtains other employment.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
UNITED INDUSTRIES CORPORATION
By:
Its:
XXXXXXX X. XXXXX
ANNEX A
MANAGEMENT AGREEMENT
SEE ATTACHED.
ANNEX B
FORM OF RELEASE
June 29, 1999
United Industries Corporation
0000 Xxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Attention: Chairman of the Board of Directors
Subject: RELEASE AGREEMENT
Gentlemen:
1. This letter constitutes the agreement and release (this
"RELEASE AGREEMENT") between United Industries Corporation (the "COMPANY")
including its past, present and future affiliates, officers, directors,
employees, shareholders and divisions, and its and their successors and assigns
(collectively referred to as the "COMPANY PARTIES") and me ("EXECUTIVE"),
relative to the termination of my employment with the Company.
2. Executive and the Company are parties to that certain
Management Agreement, dated as of January 20, 1999 (as the same may have been
amended from time to time, the "MANAGEMENT AGREEMENT") and that certain
Severance Agreement dated as of the date hereof (the "SEVERANCE AGREEMENT").
Executive is providing this Release Agreement pursuant to SECTION 6 of the
Severance Agreement within 21 days after the Termination Date (as defined in the
Management Agreement).
3. In consideration of and as a condition to the Company
making the payments and providing benefits to Executive as set forth the
Severance Agreement, all of which may be subject to withholdings as required by
law (the "SEVERANCE BENEFITS"), Executive has agreed to provide to the Company a
full, final and complete release (the "RELEASE") of and from all possible Claims
(as defined below). Accordingly, Executive hereby (i) agrees to fully perform
and comply with all of the surviving provisions of the Management Agreement
(including, without limitation, SECTION 6 thereof) and the Severance Agreement,
to promptly return all Company properties in his possession or control, and not
to defame the Company, and (ii) fully and completely discharges and releases the
Company Parties from all Claims which Executive may have against any of the
Company Parties.
4. If Executive does not promptly return all Company
properties in his
possession or control, or if he does not fully perform and comply with all of
the applicable provisions of the Management Agreement, including, without
limitation, SECTION 6 thereof, and the Severance Agreement or if he defames the
Company or if he asserts (or attempts to assert) any Claims against any Company
Party, then in addition to whatever other legal recourse the Company may have,
the Company shall be entitled to discontinue all Severance Benefits.
5. Executive acknowledges that, except for the Company's
payments and other benefits (including expense reimbursements) provided for in
the Severance Agreement and those provisions of the Management Agreement which
survive the execution of the Severance Agreement (the "SURVIVING PROVISIONS"),
his release of the Company is a full, final and complete settlement and
discharge of all Claims. "CLAIMS" include, but are not limited to:
(a) All matters, events, rights and obligations, if any, in
respect of every express and implied oral and written contractual relationship
between Executive and the Company (including, but not limited to, provisions in
the Management Agreement other than the Surviving Provisions); any and every
right, obligation, demand and matter, known or unknown, arising out of every
act, omission and occurrence prior to the Effective Date (as defined below) of
this Release Agreement, including, but not limited to, Executive's employment
relationship with the Company and the termination of that employment
relationship; actions in law and equity, including, but not limited to, claims
for breach of contract, defamation, personal injury (excluding any workers'
compensation claims), back pay, front pay, severance pay, vacation pay
(including, but not limited to, compensation for any vacation days not taken),
bonuses, wages, compensatory damages, punitive damages, liquidated damages,
benefits (to the extent permitted by applicable law), attorneys' fees, interest,
court costs, seniority, reinstatement and re-employment, service letters, claims
arising under the provisions of the Labor Management Relations Act, the Fair
Labor Standards Act, Title VII of the Civil Rights Act of 1964, as amended, the
Civil Rights Act of 1866 et seq., the Civil Rights Act of 1991, the
Rehabilitation Act of 1973, the Americans With Disabilities Act, the Older
Workers Benefit Protection Act, applicable Missouri statutes, and comparable
statutes of every other state which may be applicable.
(b) Executive expressly waives any and all rights and claims
arising or which could arise under the Age Discrimination in Employment Act of
1967, as amended ("ADEA"), and he acknowledges that his waiver of rights and
claims is in writing, and written in a manner intended to be understood, and is
understood by him. This waiver refers to rights and claims arising or which
could arise under ADEA, except those which may arise after the Effective Date of
this Release Agreement. This waiver of Executive's rights and claims arising or
which could arise under ADEA is in exchange for part of the consideration stated
in SECTION 2 of the Severance Agreement, and is above and beyond that to which
Executive is otherwise entitled, and his waiver of rights and claims is made
pursuant to 29 U.S.C. Section 626(f)(1), and this waiver is not requested in
connection with any existing incentive or other employment termination program.
6. The law requires that Executive have a period of at least
21 days to consider this proposed Release and Release Agreement. If the Release
and Release Agreement are acceptable to Executive, Executive also has an
additional period of 7 days to change his
mind. This means that Executive can sign and deliver this Release at any time
within 21 days after the Termination Date, and the 7 days during which Executive
may change his mind and revoke his acceptance will commence on the day that this
Release Agreement document is signed by Executive and delivered to the Company.
The purpose of the 21 days and 7 days periods is to assure that Executive has
ample opportunity to consider this proposed Release Agreement and to consult
with members of his family, attorneys, and/or his advisors, if he chooses to do
so before becoming legally bound. If Executive signs and delivers this Release
Agreement document within 21 days of the Termination Date, and if he does not
thereafter revoke his acceptance during the following 7 days, then the Effective
Date of this Release Agreement will be the date on which the revocation period
ends and (notwithstanding anything contained in the Severance Agreement to the
contrary) at that time the Severance Benefits provided for in SECTION 2 of the
Severance Agreement will be commenced.
7. Executive and the Company agree that this Release Agreement
shall in no sense be construed to be an admission of wrongdoing, guilt or
liability on the part of either Executive or the Company under any state,
federal or local law, whether statutory or common law, or pursuant to regulation
or executive order of any public authority, or arising or which could arise in
respect of any contractual relationship, express or implied, written or oral.
8. This Release Agreement shall be regarded by Executive and
by the Company as confidential.
9. EXECUTIVE HEREBY ACKNOWLEDGES THAT HE HAS READ THIS RELEASE
AND RELEASE AGREEMENT CONSISTING OF FOUR (4) PAGES AND ELEVEN (11) NUMBERED
SECTIONS, INCLUDING THIS SECTION; THAT HE HAS HAD A REASONABLE PERIOD OF TIME
WITHIN WHICH TO CONSIDER THIS RELEASE AND RELEASE AGREEMENT AND FULLY UNDERSTAND
AND ACCEPT ALL OF ITS PROVISIONS OF HIS OWN VOLUNTARY FREE WILL; THAT NO
PROMISES OR REPRESENTATIONS HAVE BEEN MADE OTHER THAN AS EXPRESSLY STATED
HEREIN; THAT HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY AND HAS DONE SO OR
HAS VOLUNTARILY ELECTED NOT TO DO SO; AND THAT BY EXECUTING THIS RELEASE AND
RELEASE AGREEMENT AND ACCEPTING THE CONSIDERATIONS OUTLINED HEREIN FROM THE
COMPANY EXECUTIVE WILL ABIDE BY THE PROVISIONS HEREOF.
10. Notwithstanding anything contained in this Release
Agreement, nothing herein shall limit or otherwise affect any of the rights and
remedies which Executive or the Company has under (a) Sections 6, 8, 12, 13 and
14 of the Management Agreement, (b) that certain Stockholders Agreement, by and
among Executive, the Company and certain other parties thereto, dated as of
January 20, 1999 (as the same may have been amended from time to time), (c) the
Company's benefits plans or (d) the Severance Agreement.
11. This letter agreement 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 and 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.
--------------------------------------- Witness:
XXXXXXX XXXXX -------------------------------
Date:
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UNITED INDUSTRIES CORPORATION Witness:
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By: Date:
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Its:
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