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EXHIBIT
10.24
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
This Amended and Restated Employment
Agreement (“Agreement”), dated as of June 15
, 2007 (the “Effective Date”), is made by and
among Leslie’s Poolmart, Inc. (the “Company”),
Leslie’s Holdings, Inc., a Delaware corporation
(“Holdings” and, together with the Company, the
“Companies”) and Steven L. Ortega
(“Executive”).
RECITALS
A. The Company is a corporation
organized under the laws of Delaware. It is engaged in the business
of marketing pool supplies and related pool equipment and
products.
B. Holdings was formed in February 2007
and owns 100% of the voting stock of the Company.
C. Executive and the Company are parties
to that Executive Employment Agreement April 22, 2005 and
amended July 1, 2005 governing the Company’s employment
of Executive (the “Original Agreement”). The Company,
Holdings and Executive wish to supplement and restate the Original
Agreement in its entirety.
D. The Company wishes to continue the
employment of Executive as Chief Financial Officer of the Company
and Holdings wishes Mr. Ortega to serve as its Chief Financial
Officer, and Executive desires to be so employed by the Company and
to act in such capacities.
The parties agree as set forth
below:
1. Employment . The Company
agrees to continue to employ Executive to render the services
specified herein on the terms and conditions and for the
compensation herein provided, and Executive accepts such
employment.
2. Term . The term of employment
of Executive commenced on the date of the Original Agreement (the
“Start Date”) and will last for five years (the
“Term of Employment”) from the Start Date. The Term of
Employment will automatically extend for successive one-year
periods following the fifth anniversary of the Start Date,
unless:
(a) The Company or the
Executive delivers written notice to the other party no later than
ninety (90) days prior to the fifth anniversary of this
Agreement or any subsequent anniversary of the Start Date as the
case may be, of intent not to renew; or
(b) Executive’s
employment is terminated in accordance with Sections 5, 6 or
7.
Any extension under this section shall
be considered part of the “Term.”
3. Position and Duties . During
the Term of Employment, Executive will serve as Executive Vice
President and Chief Financial Officer of Holdings and the Company.
Executive will have responsibilities and authority, and perform
executive duties, appropriate to his position. Excluding periods of
vacation and sick leave, Executive is to devote substantially his
full attention and time to his responsibilities to Holdings and the
Company. However, he may serve
on boards and committees of other
businesses or industrial groups, attend to personal investments,
and engage in civic and charitable endeavors, provided that such
activities are not competitive with the business of Company and do
not unduly interfere with Executive’s attention to his
responsibilities under the Agreement. During the Term, the
Companies will nominate and recommend Executive for reelection to
the Boards of Directors of the Companies at each appropriate
meeting of stockholders and Executive agrees to serve on the Boards
of Directors of the Companies.
If, during the Term, the Company offers,
and the Executive accepts, a position different than that described
in Section 3, and such new position represents a Material
Diminution in position or requires Relocation (as those terms are
defined in Section 6(b)), then the Executive shall have no
more than 60 days after beginning work in such new position to
exercise the Good Reason termination clause under
Section 6(b); following which 60-day period, if he has not
then so terminated, Executive shall be deemed to have thereafter
waived all rights to terminate for Good Reason in respect of such
Material Diminution or Relocation.
4. Compensation and Benefits
.
(a) Base Salary .
Executive’s base salary will be no less than $330,750 less
normal withholdings per year, paid in accordance with
Company’s standard payroll practices.
(b) Executive Bonus
Plan . Executive will participate in Company’s bonus plan
applicable to its senior executives. Executive’s target bonus
will be at least 60% of his base salary in effect for the fiscal
year and the plan shall provide for a minimum bonus of 50% of
target upon achievement of threshold performance. The annual bonus
thereafter will be paid in accordance with Company’s standard
bonus payment practices.
(c) Expenses .
Executive shall be entitled to receive prompt reimbursement for all
expenses reasonably and necessarily incurred by Executive in
performing his duties hereunder, in accordance with the
Company’s then existing practices and policies for executives
and subject to the approval of the Chairman of the Board or his
designee.
(d) Cash Allowance .
Company will pay Executive an annual cash allowance for expenses
that relate to his employment which might be considered partially
or wholly personal in nature. The allowance will be $16,500.00 for
2007, increased annually by 5%, plus an amount equal to the
Federal, state and local taxes he will incur as a result of such
payment. The Cash Allowance will be paid to Executive at the same
time as it is regularly paid to other executives entitled to a
comparable benefit.
(e) Benefit Plans and
Other Fringe Benefits . Executive shall be eligible to
participate in any medical, dental, life insurance, disability,
retirement, profit-sharing, savings, stock option plan or
stock-based compensation plans made generally available by the
Company to executives of the Company presently or in the future,
subject to and on a basis consistent with the terms, conditions and
administration of any such plan. In addition, Executive shall be
entitled to vacation and sick leave benefits in accordance with the
policies applicable to other senior executives of the Company,
provided however that Executive shall be entitled to not less than
four (4) weeks paid vacation each calendar year. Permission to
exceed the maximum accrual of vacation hours must be approved in
writing by the Chairman of the Board of the Company.
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5. Termination of Employment by
Company .
(a) Termination For
Cause . Executive’s employment with the Company may be
terminated at any time by the Boards of Directors of the Companies
for cause. The Company will pay to Executive within 30 days of
termination for cause (i) any unpaid base salary that has been
earned at the time of such termination; (ii) a pro-rata
portion of the cash allowance for the year less any amount
previously disbursed in that year, (iii) any reimbursements to
which he was entitled; (iv) compensation for accrued but
unused vacation; (v) and any other amounts or benefits due
after the termination of employment under the terms of other
agreements, awards, plans’ arrangements, policies or
programs.
(b)
“Cause” . For purposes of this Agreement,
“Cause” means:
(i) Executive’s breach
of this Agreement or of a material Company policy;
(ii) the engaging by
Executive in willful, reckless or grossly negligent misconduct;
or
(iii) Executive’s
indictment, charge, conviction or guilty plea (or plea of nolo
contendere) with respect of an offense involving moral turpitude or
a felony.
(iv) Executive failing or
refusing to perform any material obligation or to carry out the
reasonable directives of the Executive’s supervisor
consistent with his duties under Section 3, and the Executive
fails to cure the same within a period of 10 days after written
notice of such failure is provided to the Executive by the
Company.
(c) Termination Without
Cause . Executive’s employment may be terminated without
cause at any time by the Board of Directors of the Company without
any required period of notice. However, if Executive’s
employment is terminated without cause, the Company shall pay or
provide the following payments and benefits to executive (subject
to applicable withholding):
(i) all amounts and benefits
specified in Section 5(a) above;
(ii) 200% of the sum of
(A) Executive’s base salary in effect at the time of the
termination, plus (B) his target bonus for the year of
termination to be paid in accordance with Company’s normal
payroll procedures and as a lump sum in respect of the amount
attributable to the first 12 months after termination of
employment, paid to Executive no later than 14 days after the
termination date;
(iii) Company will reimburse
Executive for the premium payable by him for health and
medical-care insurance coverage of Executive and his dependents
under COBRA for a period of 18 months after the termination, or as
otherwise required by law; and
(iv) The Executive shall be
entitled to independent, offsite, executive career transition and
outplacement services provided by a nationally recognized
outplacement firm, including one-on-one coaching covering
reemployment,
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career changes,
entrepreneurial/consulting ventures, etc., and access to
comprehensive office and administrative services for a period not
to exceed six months following Executive’s termination of
employment. Such outplacement services will be provided by an
organization selected mutually by the Executive and the Company and
paid for by the Company.
6. Executive Termination
.
(a) Voluntary
Termination . During the Term, the Executive may terminate his
employment for any reason upon not less than 30 days prior written
notice to the Company and Holdings; provided, that the Companies
may accelerate the Executive’s employment termination date to
the date on which the Executive gives the Company notice of
termination or on any date between such dates. If the Company
accelerates the Executive’s termination date, the Executive
shall be paid the amounts and benefits specified in
Section 5(a) above as if he had worked the entirety of the
actual notice period, but not in excess of 30 days.
(b) Good Reason
Termination . Notwithstanding paragraph 6(a), the Executive may
terminate his employment for “Good Reason” in
accordance with and during the period specified in Section 3
above upon 15 day’s prior notice to the Company. For this
purpose, “Good Reason” shall be deemed to exist
if
(i) there is a material
diminution in title and/or duties, responsibilities or authority of
the Executive (“Material Diminution”);
(ii) the Company requires the
Executive to move to another location of the Company or any
affiliate and the distance between the new job site is at least 50
miles away from Metropolitan Phoenix, Arizona
(“Relocation”);
(iii) there is a willful
failure or refusal by the Company to perform any material
obligation under this Agreement; or
(iv) there is a reduction in
the Executive’s Base Salary or annual bonus target
amount.
In each such case, the Executive shall
provide the Company and Holdings with written notice of the grounds
for a Good Reason termination, and the Companies shall have a
period of 10 days to cur
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