Exhibit 10.6
UNITED INDUSTRIES CORPORATION
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is entered into
as of January 20, 1999, by and between David Jones ("Consultant") and United
Industries Corporation, a Delaware corporation (the "Company"). The Company and
Consultant are sometimes collectively referred to herein as the "Parties" and
individually as a "Party." Capitalized terms used herein and not otherwise
defined are defined in Section 13.
The Company, UIC Holdings, L.L.C. and certain stockholders of
the Company, are parties to an Agreement and Plan of Recapitalization, Purchase
and Redemption dated as of December 24, 1998 (the "Recapitalization Agreement").
Upon the closing of the transaction contemplated thereunder, the Company desires
to obtain the services of Consultant to consult with and perform services as an
independent contractor for the Company with respect to its businesses, and
Consultant desires to provide services to the Company upon the terms and
conditions set forth in this Agreement. In addition, pursuant to the terms of
this Agreement, Consultant shall purchase, and the Company shall sell, for an
aggregate purchase price of $1,000,000.00, 100,000.00 shares of Class A Voting
Common Stock and 100,000.00 shares of Class B Non-Voting Common Stock
(collectively, the "Common Stock"). The Common Stock and all other capital stock
of the Company hereafter acquired by Consultant (including, without limitation,
shares of Common Stock purchased upon the exercise of the Options (as defined in
Section 2(b) below) are sometimes collectively referred to as "Consultant
Securities." The Consultant Securities are subject to certain transfer
restrictions as set forth herein.
In consideration of the mutual covenants and agreements set
forth herein, the Parties agree as follows:
PART I. CONSULTING TERMS
1. Consulting Services. The Company hereby engages Consultant
as an independent contractor, and not as an employee, to render consulting
services to the Company as hereinafter provided, and Consultant hereby accepts
such engagement, for a period commencing on the Closing Date (as defined in the
Recapitalization Agreement) and terminating one year after the Closing Date, or
such later date as may be mutually agreed upon in writing by the Parties (the
"Consulting Period"). During the Consulting Period, Consultant shall render such
consulting services to the Company in connection with the Company's business as
the Company from time to time reasonably requests. The Consultant shall devote
reasonable time and efforts to the performance of the consulting services
contemplated by this Agreement as mutually agreed by the Company and Consultant.
Consultant shall not have any authority to bind or act on behalf of the Company.
In the event that after the expiration of the Consulting Period, the Company
desires to engage Consultant for broader or more extensive services than as set
forth in this Section 1,
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Consultant and the Company shall enter into a mutually satisfactory arrangement
relating to the additional services and the compensation thereof.
2. Compensation; Reimbursement.
(a) In consideration of Consultant's consulting services set
forth in Section 1 above, during the Consulting Period the Company shall pay to
Consultant a monthly fee of $6,250.00 (pro-rated for any partial month)(the
"Consulting Payment"), payable on the last day of each month in which consulting
services are rendered. Consultant shall be entitled to receive the full
Consulting Payment regardless of the amount and frequency of consulting services
actually requested of him by the Company. The Company shall reimburse Consultant
for all reasonable expenses incurred by him in the course of performing his
duties under this Agreement which are consistent with the Company's policies in
effect from time to time with respect to travel, entertainment and other
business expenses, subject to the Company's requirements with respect to
reporting and documentation of such expenses.
(b) Stock Options. The Company shall grant Consultant options
(the "Options") to purchase 300,000 shares of Common Stock, all on the terms and
conditions contained in the Company's 1999 Stock Option Plan approved by the
Board.
(c) Signing Bonus. Upon the Company's and Consultant's
execution hereof, the Company shall pay to Consultant a signing bonus of
$500,000.
3. Confidential Information. Consultant acknowledges that the
information, observations and data relating to the business of the Company and
its subsidiaries which Consultant shall obtain during the course of his
association with the Company and its subsidiaries and his performance under this
Agreement are the property of the Company and its subsidiaries. Consultant
agrees that he shall not use for his own purposes or disclose to any third party
any of such information, observations or data without the prior written consent
of the Board, unless and to the extent that (i) the aforementioned matters
become generally known to or generally available for use by the public, in each
case other than as a result of Consultant's acts or omissions, (ii) disclosure
is compelled by law or judicial, administrative or regulatory action or
proceeding or (iii) disclosure is reasonably necessary in order for Consultant
to enforce his rights under this Agreement or to defend himself in any judicial,
administrative or regulatory action or proceeding to which the Company or its
affiliates are directly or indirectly a party.
4. Board Membership. Consultant shall be a member of the Board
of Directors of the Company (the "Board") for a period of three years, unless
earlier removed by a vote of the directors or stockholders of the Company. In
consideration of Consultant's services as a member of the Board, the Company
shall pay to Consultant $25,000 per year (pro-rated for any partial year) or
such greater amount as may be established from time to time by the Company as
its payment to non-employee directors in consideration of their services as
members of the Board.
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5. Tax Returns. It is intended that the fees paid to
Consultant hereunder shall constitute revenues to Consultant and (unless
otherwise required by law) the Company will not withhold any amounts therefrom
as federal income tax withholding from wages or as employee contributions under
the Federal Insurance Contribution Act or any other state or federal law.
Consultant shall file all tax returns and reports required to be filed by him on
the basis that Consultant is an independent contractor, rather than an employee,
as defined in Treasury Regulation ss.31.3121(d)-1(c)(2).
6. Indemnification. Without prejudice to (or enlargement or
other modification of) any existing rights of indemnification as an officer or
director enjoyed by Consultant, the Company will defend and indemnify and hold
Consultant harmless for serving as a consultant and as a director to the same
extent as the Company indemnifies its officers and directors under the Company's
articles of incorporation and bylaws as in effect on the Closing Date, and
Consultant shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its consultants,
directors or officers (and to the extent the Company maintains such an insurance
policy or policies, Consultant shall be covered by such policy or policies, in
accordance with its or their terms to the maximum extent of the coverage
provided for any other Company consultant, officer or director). No amendment to
the Company's Certificate of Incorporation or bylaws after the date of this
Agreement which reduces the scope of indemnification of officers and directors
shall affect the rights of Consultant under this Agreement.
7. Consultant's Representations. Consultant 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 he is a party or by which he is bound, (ii) he is not a party to or bound
by any employment agreement or confidentiality agreement with any other person
or entity which is in conflict with or would be breached by the execution,
delivery and performance of this Agreement and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and
binding obligation of his, enforceable in accordance with its terms.
8. 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 Consultant and his
legal representatives and assigns (including subsequent holders of Consultant
Securities); provided that (i) in no event shall Consultant delegate or transfer
his obligations to perform future services for the Company without the prior
written consent of the Company (which consent may be withheld in its sole
discretion) and (ii) the Company may not assign or transfer its rights
hereunder, other than 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.
9. 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 against whom enforcement of such
amendment, modification or waiver is sought. No course
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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 Consultant 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 Consultant of any such right or remedy shall preclude
other or further exercises thereof. A waiver of right or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right or
remedy on any other occasion.
PART II. PURCHASE OF CONSULTANT SECURITIES
10. Purchase and Sale of Consultant Securities.
(a) Common Stock. Upon execution of this Agreement, Consultant
shall purchase, and the Company shall sell, 100,000.00 shares of the Company's
Class A Voting Common Stock and $100,000.00 shares of the Company's Class B
Non-Voting Common Stock at a price of $5.00 per share. Consultant shall deliver
to the Company a cashier's or certified check or wire transfer of funds in the
aggregate amount of $1,000,000.00 (provided that Consultant shall be permitted
to net against such payment amounts owed to Consultant pursuant to Section
2(c)).
(b) Certain Representations and Warranties. In connection with
the purchase and sale of the Consultant Securities hereunder, Consultant hereby
represents and warrants to the Company that:
The Consultant Securities to be acquired by
Consultant pursuant to this Agreement shall be acquired for his own
account and not with a view to, or intention of, distribution thereof
in violation of the Securities Act, or any applicable state securities
laws, and the Consultant Securities shall not be disposed of in
contravention of the Securities Act or any applicable state securities
laws;
Consultant is sophisticated in financial matters and
is able to evaluate the risks and benefits of the investment
in the Consultant Securities;
Consultant is an "accredited investor" as defined
under Regulation D promulgated under the Securities Act;
Consultant is able to bear the economic risk of his
investment in the Consultant Securities for an indefinite period of
time because the Consultant Securities have not been registered under
the Securities Act and, therefore, cannot be sold unless subsequently
registered under the Securities Act or an exemption from such
registration is available;
Consultant has had an opportunity to ask questions
and receive answers concerning the terms and conditions of the offering
of Consultant Securities and has had full access to such other
information concerning the Company as he has requested. Consultant has
reviewed, or has had an opportunity to review, a copy of the
Recapitalization Agreement,
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the Stockholders Agreement, all of the exhibits thereto and all of the
other agreements contemplated hereby and thereby;
This Agreement constitutes the legal, valid and
binding obligation of Consultant, enforceable in accordance with its
terms, and the execution, delivery and performance of this Agreement by
Consultant do not and shall not conflict with, violate or cause a
breach of any material agreement, contract or instrument to which
Consultant is a party or any judgment, order or decree to which he is
subject; and
Consultant is a United States citizen and a resident
of the State of Wisconsin.
(c) Additional Representation and Warranty. As an inducement
to the Company to issue Consultant Securities to Consultant, and as a condition
thereto, Consultant acknowledges and agrees that neither the issuance of the
Consultant Securities to Consultant nor any provision contained herein shall
entitle him to remain as a consultant to the Company and its Subsidiaries other
than as specifically set forth in this Agreement.
(d) Compensation Arrangements. The Company and Consultant
acknowledge and agree that this Agreement has been executed and delivered, and
the Consultant Securities have been issued hereunder, in connection with and as
a part of the compensation and incentive arrangements between the Company and
Consultant.
11. Restrictions on Transfer.
(a) Stockholders Agreement. The Consultant Securities are
subject to the restrictions on Transfer set forth in the Stockholders Agreement.
(b) Legend. The certificates representing the Consultant
Securities shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON JANUARY 20, 1999, HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR
OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION UNDER
THE ACT OR AN EXEMPTION THEREFROM. THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS, AND
CERTAIN OTHER AGREEMENTS SET FORTH IN A CONSULTING AGREEMENT
BETWEEN THE COMPANY AND DAVID JONES DATED AS OF JANUARY 20,
1999, AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY
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OF SUCH AGREEMENT MAY BE OBTAINED BY THE
HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE
OF BUSINESS WITHOUT CHARGE."
12. Survival. Sections 3 and 6 and Sections 8 through 15 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Consulting Period.
13. Definitions. The following definitions shall be applied to
the capitalized terms used in this Agreement for all purposes, unless otherwise
clearly indicated:
(a) Defined Terms.
"Consultant Securities" has the meaning set forth in the
Preamble. Consultant Securities shall continue to be Consultant Securities in
the hands of any holder other than Consultant and except as otherwise provided
herein, each such other holder of Consultant Securities shall succeed to all
rights and obligations attributable to Consultant as a holder of Consultant
Securities hereunder. Consultant Securities shall also include securities of the
Company issued with respect to Consultant Securities by way of a stock split,
stock dividend or other recapitalization.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Stockholders Agreement" means that certain Stockholders
Agreement, dated as of the date hereof, by and among the Company, Consultant and
certain other Persons listed on the signature pages thereto, as amended from
time to time.
"Transfer" has the meaning ascribed to such term in the
Stockholders Agreement.
(b) Other Definitions. The terms set forth below are defined
on the following pages of this Agreement:
Agreement............................................- 1 -
Board................................................- 2 -
Common Stock.........................................- 1 -
Company..............................................- 1 -
Consultant...........................................- 1 -
Consulting Payment...................................- 2 -
Consulting Period....................................- 1 -
Options..............................................- 2 -
Party................................................- 1 -
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Parties..............................................- 1 -
Recapitalization Agreement...........................- 1 -
14. Notices. Any notice provided for in this Agreement must be
in writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
To the Company
United Industries Corporation
8825 Page Boulevard
St. Louis, MO 63114
Telecopy: (314) 253-5941
Attention: President
To Consultant
David Jones
4596 Signature Drive
Middleton, WI 53562
Telecopy: (608) 828-9721
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S.
mail.
15. General Provisions.
(a) 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.
(b) 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.
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(c) 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 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.
(d) 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.
(e) Amendment and Waiver. The provisions of this Agreement may
be amended and waived only with the prior written consent of the Company and
Consultant.
(f) Third-Party Beneficiary. There are no beneficiaries to
this Agreement other than the signatories hereto.
(g) 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.
(h) 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.
(i) Assignment. 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 which assumes this
Agreement and all obligations and undertakings of the Company hereunder. Upon
such a consolidation, merger, or sale of assets the term "the Company" will mean
the other corporation and this Agreement shall continue in full force and
effect.
(j) 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.
* * * * *
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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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DAVID JONES
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CONSENT
The undersigned spouse of Consultant hereby acknowledges that
I have read the foregoing Consulting Agreement and that I understand its
contents. I am aware that the Consulting Agreement imposes restrictions on the
transfer of my spouse's Consultant Securities. I agree that my spouse's interest
in the Consultant Securities is subject to this Agreement and any interest I may
have in such Consultant Securities shall be irrevocably bound by this Agreement
and further that my community property interest, if any, shall be similarly
bound by this Agreement.
I am aware that the legal, financial and other matters
contained in this Agreement are complex and I am free to seek advice with
respect thereto from independent counsel. I have either sought such advice or
determined after carefully reviewing this Agreement that I will waive such
right.
Date: January __, 1999
Name of Consultant: David Jones
Name of Spouse:
Signature of Spouse:
Name of Witness:
Signature of Witness:
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