This EMPLOYMENT AGREEMENT (this ‘‘Employment Agreement’’) is effective as of the 7th day of April, 2006 by and among Ames True Temper, Inc., a Delaware corporation (the ‘‘Company’’), Acorn Products, Inc., a Delaware corporation (‘‘Acorn’’), UnionTools, Inc. a Delaware corporation and wholly owned subsidiary of Acorn (‘‘UnionTools’’), and A. Corydon Meyer (the ‘‘Executive’’ and together with the Company, Acorn, and UnionTools, the ‘‘Parties’’).
WHEREAS, the Company and its Affiliates, as defined in Section 9(f), are engaged in the business of (i) manufacturing, marketing and distributing long-handled tools, wheelbarrows, hose reels, striking tools, pruning implements, pots and planters, snow tools, lawn carts, repair handles, garden hoses, and decorative accessories for the lawn and garden, and (ii) conducting such other activities as are undertaken from time to time by the Company and each of its Affiliates as a result of future acquisitions, or otherwise;
WHEREAS, the Company entered into an Agreement and Plan of Merger (the ‘‘Merger Agreement’’), by and among the Company, Acorn, and ATTUT Holdings, Inc., dated April 7, 2006, under which the Company acquired Acorn on the ‘‘Closing Date’’ (as defined in the Merger Agreement);
WHEREAS, immediately prior to the Closing Date, Executive was employed by UnionTools and subject to the Employment Agreement, dated June 11, 2002, by and among Acorn, UnionTools, and the Executive, as amended by the First Amendment to Employment Agreement, dated May 26, 2004 (the ‘‘Prior Employment Agreement’’) and the Employee Severance Agreement, dated August 31, 1999, between Acorn and Executive (the ‘‘1999 Severance Agreement’’);
WHEREAS, effective as of the Closing Date, the Company desires to employ Executive as the Senior Executive Vice President of Business Development of the Company in accordance with the terms hereof, and Executive desires to voluntarily resign his position as the President and Chief Executive Officer of UnionTools without ‘‘good reason’’ (as defined in the Prior Employment Agreement) and commence his employment with the Company as its Senior Executive Vice President of Business Development in accordance with the terms hereof;
WHEREAS, the Parties acknowledges that this Employment Agreement nullifies and supersedes the Prior Employment Agreement, the 1999 Severance Agreement, and all other agreements with respect to the subject matter hereof; and
WHEREAS, the Parties acknowledge that effective as of the Closing Date, Acorn, UnionTools and the Company shall not have any obligations under the Prior Employment Agreement or the 1999 Severance Agreement and Executive shall not have any rights under the Prior Employment Agreement or the 1999 Severance Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and premises in this Agreement, the Parties agree as follows:
1. Employment. The Company hereby agrees to employ Executive as Senior Executive Vice President of Business Development of the Company, and Executive hereby agrees to accept such employment and agrees to act as Senior Executive Vice President of Business Development of the Company, all in accordance with the terms and conditions of this Employment Agreement. Executive hereby represents and warrants that neither Executive’s entry into this Employment Agreement nor Executive’s performance of Executive’s obligations hereunder will conflict with or result in a breach of the terms, conditions or provisions of any other agreement or obligation of any nature to which Executive is a party or by which Executive is bound, including, without limitation, any development agreement, non-competition agreement or confidentiality agreement entered into by Executive.
2. Term of Employment. The term of Executive’s employment under this Employment Agreement will commence on the date of this Employment Agreement and will continue until the third (3rd) anniversary of the date of this Employment Agreement (the ‘‘Initial Employment Period’’).
THE INITIAL EMPLOYMENT PERIOD AND ANY RENEWAL EMPLOYMENT PERIOD (AS DEFINED HEREIN) SHALL AUTOMATICALLY BE RENEWED AND EXTENDED ON THE SAME TERMS AND CONDITIONS CONTAINED HEREIN FOR CONSECUTIVE ONE-YEAR PERIODS (EACH, A ‘‘RENEWAL EMPLOYMENT PERIOD’’), UNLESS NOT LATER THAN SIXTY (60) DAYS PRIOR TO THE END OF THE INITIAL EMPLOYMENT PERIOD OR ANY RENEWAL EMPLOYMENT PERIOD, AS THE CASE MAY BE, EITHER PARTY SHALL GIVE WRITTEN NOTICE TO THE OTHER PARTY OF ITS ELECTION TO TERMINATE THIS EMPLOYMENT AGREEMENT. The Initial Employment Period and the Renewal Employment Periods are hereinafter referred to as the ‘‘Employment Period.’’ For purposes of this Employment Agreement, any notice of election to terminate this Employment Agreement pursuant to this Section 2 shall be deemed: (i) a termination without Due Cause pursuant to Section 9(d) if such notice is delivered by the Company; or (ii) a voluntary resignation without Good Reason pursuant to Section 9(e) if such notice is delivered by Executive. Notwithstanding anything to the contrary contained herein, the Employment Period is subject to termination pursuant to Section 9 below.
3. Position and Responsibilities. Executive shall report to and be subject to the direction of the Chief Executive Officer of the Company. Executive shall perform and discharge such duties and responsibilities for the Company as the Chief Executive Officer may from time to time reasonably assign Executive. Executive understands and acknowledges that such duties shall be subject to revision and modification by the Chief Executive Officer and/or the Board of Directors (the ‘‘Board’’) of CHATT Holdings, LLC (‘‘CHATT’’) or the Company, as appropriate, upon reasonable notice to Executive. During the Employment Period, Executive shall devote Executive’s full business time, attention, skill and efforts to the faithful performance of Executive’s duties herein, and shall perform the duties and carry out the responsibilities assigned to Executive, to the best of Executive’s ability, in a diligent, trustworthy and businesslike manner for the purpose of advancing the Company. Executive acknowledges that Executive’s duties and responsibilities will require Executive’s full-time business efforts and agrees that during the Employment Period, Executive will not engage in any outside business activities that conflict with Executive’s obligations under this Employment Agreement. On or prior to January 1, 2007, at the Company’s election upon reasonable notice, Executive’s place of employment shall be relocated from Columbus, Ohio to Harrisburg, Pennsylvania.
(a) Base Salary. During the Employment Period, the Company shall pay to Executive a minimum base salary at the annualized rate of $364,000 per year (the ‘‘Base Salary’’), less applicable tax withholding, subject to increase from time to time, solely at the Company’s discretion, payable at the Company’s regular employee payroll intervals. Executive’s performance shall be reviewed annually on or before December 31 and the Base Salary may be increased, effective January 1 of each year, at the Company’s sole discretion.
(b) Bonus. During the Employment Period, Executive shall be eligible to receive an annual bonus pursuant to a program, approved by the Board, with two components: (i) the first component grants a bonus amount based on the achievement of Company performance targets and (ii) the second component grants a bonus amount based on the achievement of personal objectives. Under the program, Executive will be eligible for a target bonus equal to 40% of Executive’s Base Salary; provided that, in respect of the fiscal year ending September 30, 2006, Executive will be eligible to receive an amount under only the first component of the program, which amount will be multiplied by a fraction, the numerator of which is the number of days Executive was employed during such fiscal year and the denominator of which is 365.
5. Benefit Plans and Perquisites. During the Employment Period, Executive will be entitled to receive employee benefits comparable to those benefits provided to other officers of the Company, subject to any applicable waiting periods, eligibility requirements, or other restrictions. Notwithstanding the foregoing, the Executive shall receive, for the period of employment of Executive by Acorn prior to the Closing Date, service credit under the Company’s employee benefit plans and arrangements for purposes of eligibility and vesting, and the Company shall waive any applicable waiting periods, pre-existing conditions or actively-at-work requirements and shall give Executive