EXHIBIT 10.20
April 2, 2002
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Dear ▇▇▇:
Your existing Employment Letter-Agreement ("ELA") is amended as follows
effective January 1, 2002.
Unless expressly amended herein, all other provisions of your ELA remain the
same. Please sign two copies of this ELA amendment letter, retaining one copy
for your files, and returning the other to the Company.
Sincerely,
UNITED INDUSTRIES CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman, CEO and President
I agree to this ELA amendment letter. I understand that my compensation is
confidential information known only to me and the Company. I have previously
certified my compliance with the Company's Confidential Information Policy by my
signing the "Annual Certification of Compliance" with the Company's Business
Code of Conduct (of which the Confidential Information Policy is a part) and I
agree that I will continue to keep my compensation information confidential in
accordance with that Policy.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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15-April-02
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Date
EXHIBIT 1
COMPENSATION EXHIBIT
DEFINITIONS:
"YEAR": the Company's fiscal year, which as of the date of this Agreement
is the same as calendar year.
"EBITDA": represents net income from continuing operations before interest
expense, income taxes, depreciation and amortization, excluding any
non-recurring or extraordinary items, as determined in accordance with
generally accepted accounting principles ("GAAP"), consistently applied.
NOTE: IT IS UNDERSTOOD THAT THE COMPANY MAY BUT IS NOT REQUIRED TO PAY
INCENTIVE COMPENSATION IN ANY YEAR IN WHICH THE COMPANY'S ACTUAL EBITDA FOR
THE YEAR IS NOT AT THE PRE-DETERMINED MINIMUM OF TARGET EBITDA FOR THAT
YEAR.
"EBITDA GOAL": 100% of the Company's EBITDA performance objective for a
given Year as determined by the Company's Board of Directors.
SUMMARY OF COMPENSATION:
Your compensation will consist of A) Base Salary; B) Incentive Compensation; as
outlined below:
A. BASE SALARY shall be at the rate of $ 202,500 per year, payable monthly.
This position is exempt from the Fair Labor Standards Act and, thus, you
will not be eligible for overtime. In addition, you will be eligible to
receive a salary increase effective January 1, 2003 based on personal
performance.
B. Your INCENTIVE COMPENSATION consists of a bonus based on (1) your achieving
pre-established individual performance objectives for the applicable Year
("MBO Component"), AND (2) the Company reaching its Target EBITDA for the
applicable Year ("Target EBITDA Component"). Your total incentive potential
will be 50% of your Base Salary if 100% of Target EBITDA is achieved and
you achieve all pre-established individual performance objectives for the
applicable Year, and up to 60% of Base Salary if 110% of Target EBITDA is
achieved and you achieve all pre-established individual performance
objectives for the applicable Year.
(1) The MBO Component portion of your Incentive Compensation will be based
on your achievement of pre-established individual performance objectives
for the applicable Year and will be 20% of your total Incentive
Compensation potential. A prorated portion of the MBO Component of your
Incentive Compensation may be paid if you achieve a portion of your
pre-established individual performance objectives for the applicable Year.
This award, to be determined by management, is in recognition of your
achieving pre-established individual performance objectives for the
applicable Year and will be payable within ninety (90) days after Year-end.
Your performance objectives for each Year will be established between you
and the Chief Executive Officer.
(2) The Target EBITDA Component portion of your total Incentive
Compensation potential will be based on the Company reaching its Target
EBITDA for the applicable Year and will be 80% of your total Incentive
Compensation potential. A prorated portion of your EBITDA incentive may be
paid if the Company achieves at least ninety (90) percent of its EBITDA
goal for the applicable Year, payable within ninety (90) days after
Year-end.
Subject to application of the above referenced MBO Component and Target
EBITDA Component, your total potential Incentive Compensation shall be
calculated as follows:
(a) If the Company's actual EBITDA for the year in question equals
90% of Target EBITDA for such year, your total Incentive
Compensation will equal the product of (A) Base Salary multiplied
by (B) 25%; plus
(b) Incentive Compensation will increase by an amount equal to the
product of (A) Base Salary multiplied by (B) 2.5% multiplied by
(C) the number of percentage points by which the Company's actual
EBITDA for the year in question exceeds 90% of Target EBITDA for
such year up to a maximum of 25% of Base Salary in any year; plus
(c) Incentive Compensation will increase by an amount equal to the
product of (A) Base Salary multiplied by (B) 1% 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.
By way of example only, and to clarify the calculation of your total
Incentive Compensation for any given year, it will be assumed that your
Base Salary is $200,000, you achieve three (3) of five (5) equally weighted
of your pre-established individual performance objectives for the year, and
the Company reaches 95% of its Target EBITDA for the year. Under these
assumed facts, your total potential Incentive Compensation will be $65,000
and your actual Incentive Compensation under this example would be $59,800,
calculated as follows:
TOTAL POTENTIAL INCENTIVE COMPENSATION:
(a) Base Salary ($200,000) multiplied by 20% = $40,000; plus
(b) Base Salary ($200,000) multiplied by 2.5% multiplied by 5 =
$25,000
(c) The total of (a) plus (b) is $65,000.
Actual Incentive Compensation:
(a) The MBO Component is 20% of Incentive Compensation. By achieving
3 of 5 equally weighted pre-established individual performance
objectives, you earned 60% of 20% of your total Incentive
Compensation potential, or $7,800 ($65,000 multiplied by 20%
multiplied by 60%); and
(b) Target EBITDA Component is 80% of Incentive Compensation. In this
example, your Target EBITDA Component is $52,000 ($65,000
multiplied by 80%).
(c) The total of (a) plus (b) is $59,800.
Eligibility for Incentive Compensation requires that you be employed at
Year-end, and that your employment is not terminated for cause prior to
payment of any award of Incentive Compensation. The Company may elect, at
its discretion, to pay a portion of the Incentive prior to the end of the
Year.
If you are not in the employ of the Company for the entire Year, but you
are in the employ of the Company at Year-end, the Incentive Compensation
for that year will be a fractional portion of the award. The numerator of
the fraction is the number of months you are employed by the Company and
the denominator is 12. Employees with a hire date after the 15th of any
month will not get credit for that month toward Incentive Compensation
calculation.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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15-April-02
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Date
Initials
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RLC