Exhibit
10.2
EMPLOYMENT
AGREEMENT
THIS AGREEMENT, made and entered
into this 15th day of September, 2008, by and between
JohnsonDiversey, Inc., a Delaware corporation (“JDI”)
and Joseph Smorada (“Employee”).
JDI wishes to continue to employ the
Employee subject to the terms and conditions set forth
below.
In consideration of the mutual
promises and agreements set forth below, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I
Employment
1.1 Position and
Responsibilities. During
the Term (as defined in Section 1.2 hereof) and subject to the
terms and conditions of this Agreement, JDI agrees to employ
Employee, and Employee agrees to serve as Executive Vice President
and Chief Financial Officer of JDI. In such capacity Employee will
report to the President and Chief Executive Officer
(“President and CEO”) of JDI, and be responsible for
the typical management responsibilities expected of an individual
holding such a position and such other duties and responsibilities
consistent with such position as may be assigned to the Employee
from time to time by the President and CEO.
1.2 Term. JDI agrees to continue to employ the Employee,
and the Employee hereby agrees to work in the employ of JDI,
subject to the terms and conditions of this Agreement, for the two
year period commencing on the date hereof (the “Effective
Date”) and ending on September 14, 2010 (the
“Initial Term”), unless earlier terminated pursuant to
Article III. The Initial Term shall be extended automatically by
annual one-year periods commencing on the second anniversary date
of the Initial Term (each a “Renewal Term”) unless
either JDI or the Employee gives written notice at least sixty
(60) days prior to the end of the Initial Term or any Renewal
Term of intent not to extend the Agreement. All terms and
conditions of this Agreement shall remain in effect during one or
more Renewal Terms. The Initial Term together with any Renewal
Term(s) shall be referred to herein as the
“Term.”
1.3 Place of
Employment. Employee’s principal place of employment
shall be Sturtevant, Wisconsin.
1.4 Duties.
During the Term, the Employee shall
devote all of Employee’s business time, attention and skill
to the business and affairs of JDI and its subsidiaries, except, so
long as such activities do not unreasonably interfere with the
business of JDI or diminish the Employee’s obligations under
the Agreement, that Employee may (i) participate in the
affairs of any governmental, educational or other charitable
institution, or engage in professional speaking and writing
activities, or (ii) serve as a member of the board of
directors of other corporations, and in either case, the Employee
shall be entitled to retain all fees, royalties and other
compensation derived from such activities in addition to the
compensation and other benefits payable to Employee under this
Agreement; and provided further, that the Employee may invest
personal or family funds in any form or manner Employee may choose
that will not require any material
services on Employee’s part in the
operation of or the affairs of the entities in which such
investments are made. The Employee will perform faithfully the
duties consistent with Employee’s position and which may be
assigned to Employee from time to time by the President and
CEO.
1.5 Fiduciary Duty.
Employee acknowledges that during
the Term, Employee has a fiduciary duty of loyalty, fidelity and
allegiance to JDI and Employee will not engage in any activity that
will create a conflict of interest or breach of JDI’s Code of
Ethics and Business Conduct as in effect from time to
time.
ARTICLE II
Compensation and
Benefits
2.1 Base Salary.
Employee shall receive a base salary
(“Base Salary”) at the annualized rate of $500,000.00
to be paid in accordance with the regular payroll practices of JDI.
Base Salary is reviewed on an annual basis in April of each year.
The Base Salary amount, as in effect from time to time, may not be
decreased.
2.2 Annual Incentive
Bonus. Employee shall be
eligible to participate in JDI’s annual incentive bonus
program, as in effect from time to time during the Term.
Employee’s bonus target is 65% of Base Salary on the last day
of JDI’s fiscal year. The bonus may range from 0% to 200% of
bonus target based upon JDI and personal performance of Employee
versus objectives. The bonus shall be payable as provided in the
bonus program and payment may be taken in cash or deferred with
interest pursuant to JDI’s Deferred Compensation
Plan.
2.3 Long Term Incentive
Plan. In addition to any
such prior participation, Employee shall be eligible to participate
in JDI’s Long Term Incentive Plan (“LTIP”), as in
effect from time to time during the Term. For the 2008-2010 LTIP
cycle, Employee’s target grant value is $1,000,000.00 with a
maximum potential payout of $2,000,000.00. If Employee is in active
employment with JDI on March 31, 2009, Employee will be
eligible for a 2009 LTIP grant. The payout for the 2009 grant
(payable in March/April 2012) will be the higher of the actual
earn-out under the LTIP or $350,000.00. In addition, if Employee is
in active employment with JDI on March 31, 2010, Employee will
be eligible for a 2010 LTIP grant. The payout for the 2010 grant
(payable in March/April 2013) will be the higher of the actual
earn-out under the LTIP or $350,000.00.
Employee has also been granted
shares of restricted stock scheduled to vest as follows:
1,250 October 31, 2008; 1,250 October 31, 2009;
and 2,334 October 31, 2009. These shares were awarded
under the Second Amended and Restated Long-Term Equity Incentive
Plan and will follow the rules set forth therein. In addition to
the value of Restricted Stock upon vesting, a supplemental cash
payment will be made to the employee to bring the total value of
Restricted Stock plus this supplemental payment to be the
equivalent of $139.25 per share.
2.4 Flexible Spending
Account. During the Term,
Employee shall be eligible for an annual Flexible Spending Account
of $15,000.00 to be utilized for financial planning, tax
advice/preparation, estate planning, legal fees associated with
estate and/or property matters,
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automobile lease, automobile payments (monthly
payments only), annual country club dues and health club
memberships.
2.5 Employee Benefit Plans/Fringe
Benefits/Vacation. During
the Term, and except as otherwise provided herein, Employee shall
be eligible to participate in all employee benefit and other plans,
practices, policies and programs and fringe benefits on a basis no
less favorable than that generally provided to other Level I
executives of JDI other than the President and CEO. In each
calendar year during the Term, Employee shall be entitled to four
(4) weeks of vacation which shall accrue in accordance with
JDI’s applicable vacation policy. It is expressly agreed and
understood that Employee shall not be eligible to participate in
any severance plan, program or policy maintained by JDI.
In addition, if during the Term, JDI
adopts a change-in-control plan or such agreements for Level I
executives of JDI other than the President and CEO, Employee shall
be included generally on the same terms and conditions as the other
Level I executives of JDI other than the President and
CEO.
2.6 Expenses.
Employee shall be entitled to prompt
reimbursement of all reasonable business expenses incurred in the
performance of Employee’s duties pursuant to this Agreement,
to the extent such expenses are reimbursable in accordance with
JDI’s applicable expense reimbursement policy.
2.7 Relocation.
If applicable, Employee shall be
reimbursed for travel, moving, relocation, temporary living and
buy/sale expenses in accordance with JDI’s applicable
relocation policy.
ARTICLE III
Termination
3.1 Voluntary Resignation or
Termination Without Cause. JDI may terminate Employee’s employment at
any time without “Cause” (as defined in
Section 3.2 hereof) upon thirty (30) days’ prior
written notice to Employee. During such thirty (30) day notice
period, JDI may require that Employee cease performing some or all
of Employee’s duties and/or not be present at JDI’s
offices and/or other facilities. Employee may voluntarily resign
other than for “Good Reason” (as defined in
Section 3.3(c) hereof) at any time upon sixty
(60) days’ prior written notice to JDI; provided,
however, JDI may, in its sole discretion, (a) advance the date
of termination to any date following JDI’s receipt of such
written notice and/or (b) during such sixty (60) day
notice period, JDI may require that Employee cease performing some
or all of Employee’s duties and/or not be present at
JDI’s offices and/or facilities.
3.2 Termination for
Cause. JDI may terminate
Employee’s employment at any time without notice if such
termination is for “Cause” (as defined herein).
“Cause” means termination for any of the following
reasons:
(a) Material breach of this
Agreement, including a material failure to perform within the
provisions of “This We Believe,” after having received
prior written notice of such material breach and Employee has not
corrected such material breach (if capable of
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correction) to the reasonable
satisfaction of the President and CEO within the thirty
(30) day period following receipt by Employee of such written
notice.
(b) Willful misconduct, or willful
violation of the law in the performance of duties under this
Agreement.
(c) Willful failure or refusal to
follow reasonable, explicit, and lawful instructions or directions
from the President and CEO concerning the operation of JDI’s
business.
(d) Conviction of a
felony.
(e) Theft or misappropriation of
funds or property of JDI, or commission of any material act of
dishonesty involving JDI, its employees, or business.
(f) Appropriating any corporate
opportunity of JDI, unless the transaction was approved in writing
by the President and CEO following full disclosure of all pertinent
details of the transaction.
(g) Breach of fiduciary duty owed to
JDI as an executive of JDI.
(h) Material breach of any duty or
obligation under the attached Confidentiality Agreement,
Non-Competition Agreement, and/or Trade Secret, Invention, and
Copyright Agreement, after having received prior written notice of
such material breach and Employee has not corrected such material
breach (if capable of correction) to the reasonable satisfaction of
the President and CEO within the thirty (30) day period
following receipt by Employee of such written notice.
For purposes of this
Section 3.2, no act or failure to act on the part of the
Employee shall be consid
