EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of the 1st day of
September 1998, by and between EASY GARDENER Inc., a Delaware corporation (the
"Company"), and Richard M. Grandy (the "Executive").
W I T N E S S E T H :
WHEREAS, the Employer desires to employ the Executive as a President of the
Company, and to be assured of his services as such on the terms and conditions
hereinafter set forth; and
WHEREAS, the Executive is willing to accept such employment on such terms
and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound, the Employer and the
Executive hereby agree as follows:
1. Employment.
The Company agrees to employ the Executive and the Executive agrees to be
so employed on the terms and conditions set forth in this Agreement, for a
five-year period commencing on the date hereof; provided, however, that this
Agreement may be extended by the mutual written agreement of the Company and the
Executive.
2. Position and Duties.
During the term of this Agreement the Executive shall have the title of the
President of the Company and shall have such duties as may be from time to time
delegated to him by the Board of Directors. The Executive shall report to
Richard Raleigh and Robert Kassel (or another designee of the Board of
Directors) and the Board of Directors and shall devote substantially all of his
business time, attention, knowledge and skills faithfully, diligently end to the
best of his ability, in furtherance of the business and activities of the
Company. The Executive shall faithfully and diligently discharge his duties
hereunder and use his best efforts to implement the policies established by the
Board of Directors.
3. Indemnification of Executives.
The Company will indemnify the Executive (and his legal representatives or
other successors) to the fullest extent permitted (including payment of expenses
in advance of final disposition of the proceeding) by the laws of the State of
Delaware as in effect at the time of the subject act or omission, or such other
state in which the Company may be incorporated at such time, of the Certificate
of Incorporation and By-Laws of the Company as in effect at such time or on the
date of this Agreement, whichever affords or afforded greater protection to the
Executive. The Company will also provide Director's and Officer's insurance to
the Executive which includes all subsidiaries, current and future.
4. Place of Performance.
In connection with his employment by the Company, the Executive shall be
based at the Company's principal executive offices in Waco, Texas.
5. Offices.
If mutually agreed between the Company and the Executive, the Executive may
serve on the Board of Directors of the Company, without additional compensation.
6. Compensation.
6.1 Base Salary. During the first full year of the term of this
Agreement, the Executive shall be paid a base salary at the annual rate of
$275,000, payable in advance, in installments, and in the same manner as
other employees of the Company are paid. During the second year of this
Agreement the Executive shall be paid a salary at the annual rate of
$300,000 and during the third full year of this Agreement the Executive
shall be paid a salary at the annual rate of $300,000 and during the fourth
and fifth full year of this Agreement, the Executive shall be paid a salary
at the annual rate of $350,000. Such salary is hereinafter referred to as
the "Base Salary."
6.2 In addition to the foregoing, the Executive shall be entitled to
such other bonuses as may from time to time be awarded to him by the Board
during or in respect of his employment hereunder. These bonuses shall be
granted in conjunction with bonuses awarded to other key management in a
mutually agreed upon proportion. During the term of this Agreement, the
Company shall reimburse the Executive for such costs and expenses as the
Executive may reasonably incur in connection with the performance of his
duties hereunder, including, but not limited to, expenses for
entertainment, travel and similar items. The Company will reimburse the
Executive for such expenses upon presentation of expense statements or
vouchers or such other supporting information as the Company may require,
in accordance with the policies and procedures of the Company for the
reimbursement of business expenses of its senior executive officers.
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7. Participation in Employee Benefit Plans.
During the term of his employment hereunder, the Executive shall have the
right, but only to the extent provided in any such plan, to receive or
participate in all benefits and plans which the Company may from time to time
institute during such period for its employees and for which the Executive is
eligible.
8. Participation in Medical Plan.
During the term of his employment hereunder, the Executive shall be
entitled to participate in the current or any future medical plan of the Company
to the extent provided in such plan.
9. Vacations, Holidays and Sick Leave.
The Executive will be entitled to four (4) weeks paid vacation and the
number of paid holidays, and sick leave days in each calendar year as are
determined by the Company from time to time (prorated, in any calendar year
during which the Executive is employed under this Agreement for less than the
entire such year, in accordance with the number of days in such calendar year
during which he is so employed). Such vacation may be taken in the Executive's
discretion, and at such time or times as are not inconsistent with the
reasonable business needs of the Company. Vacation time may not be carried over
from year to year.
11. Insurability; Right to Insure.
During the continuance of the Executive's employment hereunder, the Company
shall have the right to maintain term life insurance in its own name covering
the Executive's life in such amount as shall be determined by the Company, for a
term ending on the termination date of this Agreement. The Executive shall aid
in the procuring of such insurance by submitting to the required medical
examinations, if any, and by filling out, executing and delivering such
applications and other instruments in writing as may be reasonably required by
an insurance company or companies to which application or applications for
insurance may be made by or for the Company.
12. Termination.
The Executive's employment under this Agreement may be terminated without
any breach of this Agreement only on the following circumstances:
12.1 Death. The Executive's employment under this Agreement shall
terminate upon his death.
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12.2 Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his
duties under this Agreement for 90 calendar days during any calendar year,
the Company may terminate the Executive's employment under this Agreement.
12.3 Cause. The Company may terminate the Executive's employment under
this Agreement for Cause. For purposes of this Agreement, the Company shall
have "Cause" to terminate the Executive's employment under this Agreement
upon (a) the failure by the Executive to perform his duties under this
Agreement (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) after demand for performance
is delivered by the Company, in writing, identifying the manner in which
the Company believes the Executive has not performed his duties and the
Executive fails to perform as required within 15 days after such demand is
made, (b) the engaging by the Executive in misconduct (including
embezzlement and criminal fraud) which is injurious to the Company,
monetarily or otherwise or (c) the indictment of the Executive of a crime
involving moral turpitude or dishonesty.
12.4 Termination by the Executive for Good Reason or Because of Ill
health. The Executive may terminate his employment under this Agreement (a)
for Good Reason (as hereinafter defined), or (b) if his health should
become impaired to any extent that makes the continued performance of his
duties under this Agreement hazardous to his physical or mental health or
his life, provided that, in the latter case, the Executive shall have
furnished the Company with a written statement from a qualified doctor to
such effect and provided, further, that at the Company's request and
expense the Executive shall submit to an examination by a doctor selected
by the Company and such doctor shall have concurred in the conclusion of
the Executive's doctor.
12.4.1 Good Reason. For purposes of this Agreement, "Good Reason"
shall mean the failure by the Company to comply with its material
obligations and agreements contained in this Agreement including, without
limitation, the relocation of the Executive's workplace to more than forty
(40) miles from its current location or requests by the Company that the
Executive engage in illegal conduct. With respect to the matters set forth
in this paragraph, the Executive must give the Company 30 days prior
written notice of his intent to terminate this Agreement as a result of any
breach or alleged breach of the applicable provision and the Company shall
have the right to cure any such breach or alleged breach within such 30 day
period.
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13. Notice of Termination.
Any termination of the Executive's employment by the Company or by the
Executive (other than termination by reason of the Executive's death) shall be
communicated by written Notice of Termination to the other party of this
Agreement. For purposes of this Agreement, a "Notice of Termination" shall mean
a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
14. Date of Termination.
The "Date of Termination" shall mean (a) if the Executive's employment is
terminated by his death, the date of this death, (b) if the Executive's
employment is terminated pursuant to Paragraph 12.2 above, the date on which the
Notice of Termination is given, (c) if the Executive's employment is terminated
pursuant to Paragraph 12.3 above, the date specified in the Notice of
Termination after the expiration of any cure periods and (d) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given after the expiration of any cure periods.
15. Compensation Upon Termination or During Disability
(a) If the Executive's employment shall be terminated by reason of his
death, the Company shall pay to such person as he shall designate in notice
filed with the Company, or, if no such person shall be designated, to his
estate as a lump sum death benefit, his full salary to the date of his
death in addition to any payments the Executive's spouse, beneficiaries or
estate may be entitled to receive pursuant to any pension or policy then
maintained by the Company, and such payments shall , assuming the Company
is in compliance with the provisions of this Agreement, fully discharge the
Company's obligations with respect to this Agreement.
(b) During any period that the Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, the
Executive shall continue to receive his Base Salary until the Executive's
employment is terminated pursuant to Paragraph 12.2 of this Agreement, or
until the Executive terminates his employment pursuant to Paragraph 12.4(b)
of this Agreement, whichever first occurs, less, in each case, any
disability payments otherwise payable by or pursuant to plans provided by
the Company ("Disability Payments"). The Executive shall provide consulting
services to the Company during the period that he is receiving payments
pursuant to this Paragraph 15(b).
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(c) If the Executive's employment shall be terminated for Cause, the
Company shall pay the Executive his Base Salary through the Date of
Termination, at the rate in effect at the time Notice of Termination is
given, and the Company shall, have no further obligation with respect to
this Agreement.
(d) If (A) in breach of this Agreement, the Company shall terminate
the Executive's employment other than pursuant to Paragraphs 12.2 or 12.3
hereof (it being understood that a purported termination pursuant to
Paragraphs 12.2 or 12.3 hereof which is a disputed and finally determined
not to have been proper shall be a termination by the Company in breach of
this Agreement), and/or (B) the Executive shall terminate his employment
for Good Reason, then the Company shall pay to the Executive his Base
Salary through the Date of Termination at the rate in effect at the time
Notice of Termination is given and through the date of the expiration of
the initial term of this Agreement payable in accordance with the Company's
normal payroll policies in full satisfaction of the Company's obligation to
the Executive hereunder.
16. Miscellaneous Provisions.
16.1 Executed in Counterparts. This Agreement may be executed by the
parties in one or more counterparts, each of which shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has
been signed by each of the parties hereto and delivered to each of the
other parties hereto.
16.2 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or mailed if delivered personally or
mailed by registered or certified mail, postage prepaid, return receipt
requested, as follows:
If to Company, to: c/o U.S. Home & Garden, Inc.
655 Montgomery Street
Suite 500
San Francisco, California 94111
Attention: Robert Kassel
Copy to: Tenzer, Greenblatt, Fallon & Kaplan
405 Lexington Avenue
New York, New York 10174
Attention: Robert J. Mittman, Esq.
If to Executive, to: 802 Wooded Crest
Waco, Texas 76712
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or to such other address as either party hereto shall have designated by
like notice to the other party hereto (except that a notice of change of
address shall only be effective upon receipt).
16.3 Amendments. This Agreement may only be amended by a written
instrument executed by each of the parties hereto.
16.4 Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties hereto,
oral and written, with respect to the subject matter hereof.
16.5 Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this
Agreement.
16.6 Binding Effect; Benefits. Employee may not delegate his duties or
assign his rights hereunder. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto and their respective heirs, legal
representatives, successors and permitted assigns.
16.7 Waiver, etc. The failure of either of the parties hereto to at
any time enforce any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of any such provision, nor to in any way
affect the validity of this Agreement or any provision hereof or the right
of either of the parties hereto to thereafter enforce each and every
provision of this Agreement. No waiver of any breach of any of the
provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the party against whom or which enforcement
of such waiver is sought; and no waiver of any such breach shall be
construed or deemed to be a waiver of any other or subsequent breach.
16.8 Records. Upon the termination of the Executive's employment for
any reason whatsoever, all documents, records, notebooks and other
materials which refer or relate to any aspect of the business of the
Company or any of its parent, subsidiary or affiliated corporations, which
are in the possession of the Executive including all copies thereof, shall
be promptly returned to the Company.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
EASY GARDENER Inc.
By:/s/ Richard J. Raleigh
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Name: Richard J. Raleigh
Title: Vice President
/s/Richard M. Grandy
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Richard M. Grandy
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