Daniel L. Betts Employment Agreement



 EXHIBIT 10.21 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”)
is effective and executed this 30th day of November, 2002 (the “Effective Date”) by and between
USA Deck, Inc., formerly known as Remodelers Credit Corporation, a Delaware corporation (the “Company”) and wholly owned subsidiary of U.S. Home Systems, Inc. (“USHS”), and Daniel L. Betts (the “Executive”).

  
 W I T N E S E T H: 
  
 WHEREAS, Executive was an officer and director of Deck America, Inc., a Virginia Corporation (“Deck”); 
  
 WHEREAS, Executive and Deck, along with other parties including USHS and the Company, are parties to an Agreement and Plan of Merger by and between Deck, USHS, and the Company (the “Plan of
Merger”); 
  
 WHEREAS, pursuant to the Plan of Merger, Deck merged with and into the Company, the Company
changed its name to USA Deck, Inc. and Executive will be employed as Chief Executive Officer of the Company; 
  
 WHEREAS, pursuant to the Plan of Merger, Executive executed a NonCompetition Agreement with the Company and USHS (the “NonCompetition Agreement”). 
  
 WHEREAS, pursuant to this Employment Agreement, Executive will receive Confidential Information (as defined herein) pertaining to the Company, USHS, and its other
affiliates; and 
  
 WHEREAS, the Company desires to employ the Executive in the capacity hereinafter stated, and the
Executive desires to enter into the employ of the Company in that capacity for the period and on the terms and conditions set forth herein; 
  
 NOW, THEREFORE, the Company and the Executive represent, warrant, covenant, and agree as follows: 
  
 1.    Employment and Duties.    The Company will employ the Executive in the capacity of Chief Executive Officer of the Company. The Executive agrees that
during the term of this Agreement he will devote substantially all of his business time, ability, and attention exclusively to the business and interest of the Company and will execute his duties loyally and solely for the benefit of the Company.
The Executive agrees that he will perform all of the functions generally considered to be the duties of a Chief Executive Officer, which include but are not limited to: generally overseeing the business of the Company; implementing objectives
established by the Board of Directors of the Company; and such other reasonable duties, functions, responsibilities, and authority in connection with the foregoing as are consistent with his position as Chief Executive Officer of the Company and as
are from time to time delegated to the Executive by the Board of Directors of the Company. Pursuant to his duties hereunder, Executive will create and promote the Company’s goodwill among its customers, lenders, employees, suppliers, and other
parties with whom it has business relationships. 







  
 2.    Term.    Subject to the
earlier termination of this Agreement in accordance with Paragraph 7 hereof, the term of this Agreement shall commence on the Effective Date and terminate on the 31st day of December, 2005 (such period to be referred to as the “Term”). The
Term will be automatically extended for consecutive one year periods, unless either party gives notice that it does not intend to renew the Agreement at any time prior to six months before the expiration of the Term. 
  
 3.    Compensation.    In consideration of all of the services to be rendered by the
Executive to the Company hereunder, the Company hereby agrees to pay the Executive, and the Executive hereby agrees to accept from the Company, the following compensation: 
  
 (a)    Annual Salary.    During the term of this Agreement, the Company will pay the Executive a base annual
salary of $185,000 which salary will be payable in equal semi-monthly installments (“Annual Salary”). The Annual Salary may not be reduced during the Term and may be increased on an annual basis at the discretion of the Board of Directors
of the Company, provided however, that on January 1, 2003, the Annual Salary shall be increased to not less than $190,000. 
  
 (b)    Bonus.    In addition to the base Annual Salary payable to the Executive hereunder, the Company shall pay to the Executive an annual cash bonus in an amount equal to five
percent (5%) of the actual pretax earnings of the Company for such fiscal year (calculated in accordance with generally accepted accounting principles) during the Term of this Agreement. At the request of the Executive, the Company shall advance 75
percent of the earned bonus on a quarterly basis. Such advance shall be payable in cash within 45 days after the end of each fiscal quarter, and within 45 days after the end of such fiscal year. The Company will pay the remaining unpaid bonus or, if
the advance exceeds the actual bonus, Executive shall repay to the Company, the excess bonus payment for such year. 
  
 (c)    Vacation.    During the term of this Agreement, the Executive will be entitled to paid vacation commensurate with other similarly situated executives of the Company with
a minimum of three weeks paid vacation per annum. 
  
 (d)    Car.    During the term of this Agreement, the Company shall provide the Executive an automobile similar to the current automobile provided by Deck. 
  
 (e)    Health and Disability Insurance.    During the term of this
Agreement, the Company, at its sole expense, will provide the Executive and his family with a health insurance plan and a disability insurance equal to that which is provided to the other officers and employees of the Company. 

 
 (f)    Expenses.    During the term of this Agreement, the
Executive shall be entitled to receive reimbursement for all reasonable expenses incurred by the Executive in connection with the fulfillment of his duties herein; provided the Executive has complied with all policies and procedures relating to the
reimbursement of such expenses as may from time to time be established by the Company including, but not limited to, the 

 
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 providing of all supporting backup to such expenses as is required by the Internal Revenue Service. 

 
 (g)    Stock Options.    Upon Executive signing this Agreement,
USHS shall grant Executive stock options to purchase 20,000 shares of USHS common stock at the closing sale price per share of the USHS common stock as quoted on the Nasdaq SmallCap Market system on the execution date of this Agreement. The options
shall be for a 10-year term and shall vest annually at the rate of 33 1/3% of the options granted beginning on the first anniversary date of the grant date and continuing each anniversary date thereafter until fully vested. In addition, commencing
with the Company’s fiscal year ending December 31, 2003 and ending with the Company’s fiscal year ending December 31, 2005, and provided that Executive is the Chief Executive Officer of the Company on the date of granting the following
options, if the Company achieves actual pretax income, after including Executive’s bonus as defined herein, of at least 5% of the Company’s revenues for such year, then within 90 days after the end of each such fiscal year, USHS shall
grant Executive stock options to purchase 10,000 shares of USHS common stock at the closing sale price per share of the USHS common stock as quoted on the Nasdaq SmallCap Market system on the grant date (the “Bonus Options”). The Bonus
Options shall be for a 10-year term and shall vest annually at the rate of 25% of the options granted beginning on the first anniversary date of the grant date and continuing each anniversary date thereafter until fully vested. 

 
 4.    Severance.    During the term of this Agreement, on dismissal or
termination of employment of the Executive other than for Just Cause (as hereinafter defined), death or disability (as defined in paragraph 7(a)(v) hereof, the Company shall make a cash severance payment to the Executive in an amount equal to the
greater of (a) Executive’s Annual Salary (exclusive of Bonus) for the remainder of the Term or (b) one year’s Annual Salary exclusive of Bonus, provided, however, that, if the Company elects not to renew this agreement pursuant to
paragraph 2, the Company will be obligated to pay only the Executives Annual Salary and Bonus for the remainder of the Term. The severance payment shall be paid out in equal monthly installments over a one year period, or remaining Term, less any
taxes required to be withheld by federal, state or local law in respect to any payment in cash. 
  
 5.    Nondisclosure Agreement.    Executive acknowledges and agrees that, pursuant to the Plan of Merger, he has agreed to maintain the confidentiality of all Confidential Information
(as defined herein) created by the Company prior to the Closing (as that term is defined in the Plan of Merger). The Executive also acknowledges that during his term of employment with the Company, he shall have access to and become familiar with
Confidential Information that is owned by the Company, USHS, and their affiliates and that is regularly used in the operation of the business of the Company, USHS, and their affiliates. For purposes of this Agreement, “Confidential
Information” means all information, research, computer software, or programs and related documentation, practices, technical plans, customer lists, supplier agreements, loan servicing agreements, loan purchasing and re-sale agreements and
programs, pricing techniques, marketing plans, development plans, feasibility studies, acquisition programs, financial information or all other compilations of information related to the business of and owned by the Company, and that has not been
disclosed by the Company to the general public or that does not exist in the public market. During the NonCompetition Period (as defined below), the Executive 

 
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 shall not use or disclose any of the Confidential Information, directly or indirectly, either during the
term of his employment or at any time thereafter, except as required in the course of his employment. The Executive shall promptly deliver to the Company upon termination of his employment all files, records, documents, information, data, and
similar items and documentation relating to the business of the Company, whether prepared by the Executive or otherwise coming into his possession. The obligations of this Paragraph 5 and 6 are continuous and shall survive the termination of the
Executive’s employment with the Company. 
  
 6.    NonCompetition
Agreement.    Ancillary to the otherwise enforceable agreements contained in the Plan of Merger, NonCompetition Agreement, and this Agreement, and to protect the Company’s goodwill, Confidential Information, and other
legitimate business interests (including the interests of USHS in the Plan of Merger and with respect to the goodwill and Confidential Information of USHS and its affiliates), the Executive agrees that: 
  
 (a)    During the “NonCompetition Period” (as herein so defined), Executive shall not,
directly or indirectly, acquire, invest in, or otherwise engage (whether as an employee, manager, executive or in a supervisory capacity, director, officer, member, manager, or as a consultant) in the Business (as hereafter defined) in the
Restricted Area (as hereafter defined), provided however that the Executive may invest in up to five percent (5%) of any outstanding class of equity securities of any company registered under Section 12 of the Securities Exchange Act of 1934, as
amended. For purposes of this Agreement, the terms (i)”Business” shall be defined as the business of marketing, sale, installation and manufacturing of pre-fabricated modular deck home remodeling projects including the pressure-chemical
treatment of lumber which is ultimately utilized in deck home remodeling projects, and the marketing, design, sales, manufacturing and installation of kitchen cabinet refacing and countertop, products utilized in kitchen and bathroom remodeling and
refacing and any other home improvement services similar to that provided by USHS or its affiliates and (ii) “Restricted Area” shall mean the State of Virginia or any State where the Company has made, bought, serviced, or sold home
improvement products and services within a twelve month period preceding the termination of Executive’s employment; 
  
 (b)    During the NonCompetition Period, Executive shall not directly or indirectly, whether as an employee in a managerial, executive or supervisory capacity, director, officer, member, manager, or as a
consultant, (i) solicit, or attempt to solicit or accept business that is competitive with such business being conducted by the Company, USHS, or its affiliates in the Restricted Area; or (ii) engage, hire, employ, or solicit in any manner
whatsoever the employment of an employee of the Company or USHS; or (iii) interfere in any business relationship or contract between the Company or USHS and their customers, suppliers, lenders, or financial institutions. 
  
 (c)    During the NonCompetition Period, the Executive shall not knowingly seek or accept, directly or
indirectly, personal gain from anyone soliciting business with the Company, USHS or its affiliates, (ii) any person or firm doing business with the Company, USHS or its affiliates, and (iii) any person or firm in business competition with the
Company, USHS or its affiliates. The preceding sentence shall not apply to any 

 
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 gifts, meals, and entertainment of a nominal value if the Executive’s objective is to perform in the best interest
of the Company and USHS would not be adversely affected. 
  
 (d)    The
“NonCompetition Period” shall be the Term of this Agreement and such additional periods as set forth in this subparagraph and the NonCompetition Agreement executed by Executive in connection with the Merger. If (i) Executive’s
employment is terminated by the Company for Just Cause; or (ii) Executive resigns his employment for any reason other than those set forth in Paragraph 7(c), then the NonCompetition Period shall be extended for two years after the termination of
Executive’s employment under this Agreement. If (x) Executive’s employment is terminated without Just Cause; or (y) the Company elects not to renew the Agreement pursuant to Paragraph 2; or (z) Executive resigns his employment for any
“Good Reason” set forth in Paragraph 7(c), the NonCompetition Period will be extended by the Company for six months following the termination of Executive’s employment. 
  
 (e)    Due to the irreparable and continuing nature of the injury which would result from a breach of any of the covenant contained in
Paragraphs 5 or 6, Executive agrees that Company (or USHS or its affiliates) may, in addition to any remedy which the Company (or USHS or its affiliates) may have at law or in equity, apply to any court of competent jurisdiction for the entry of an
immediate order to restrain or enjoin the breach of this covenant and to otherwise specifically enforce the provisions of this covenant. 
  
 (f)    The Executive recognizes that the foregoing territorial and time limitations are reasonable and properly required for the adequate protection of the business of the Company
and that if any such territorial or time limitation is found to be unreasonable by a court of competent jurisdiction, the Executive agrees and submits to the reduction of either said territorial or time limitation to such an area or period as
appears reasonable to such court. Provided however, if the Company shall successfully enforce its injunctive rights hereunder in a court of competent jurisdiction, the terms of this covenant shall be extended by the period of time, if any, that the
Executive was not restrained or enjoined from competing with the Company during the pendency of the court proceedings. 
  
 (g)    The existence of any potential or alleged claim or cause of action of the Executive against the Company, USHS, or its affiliates, whether predicated on this Agreement or otherwise, will not
constitute a defense to the enforcement by any party of the covenants contained in this Agreement. An alleged or actual breach of the Agreement by the Company, USHS, or its affiliates will not be a defense to enforcement of the provisions of this
Paragraph or other obligations of Employee to any such party. 
  
 (h)    In
consideration of the Executive’s NonCompetition agreement with the Company, after the Executive’s employment terminates, the Company and the Executive agree that the Executive’s employment, a portion of the Executive’s Annual
Salary and all of the Executive’s severance pay, if any, shall be considered payment for the Executive’s NonCompetition agreement. 
  
 (i)    The Executive’s covenants in Paragraph 5 and this Paragraph 6 shall terminate and be of no further effect if USHS or the Company cease to conduct the 

 
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 Business, dissolve, or become subject to a petition in bankruptcy or if the
Executive’s employment is terminated other than for Just Cause. 
  
 (j)    Notwithstanding any provision herein to the contrary, the terms of the NonCompetition Agreement executed by Executive on the Closing Date of the Merger shall continue to be enforceable in accordance with
its terms upon termination of this Agreement. 
  
 7.    Termination of
Agreement.    This Agreement (other than the provisions of Paragraphs 4, 5, 6, 8, 9, 10, 13, 14, 15, 16, 17, 18, and 19, which shall survive such termination) may be terminated as provided herein: 
  
 (a)    The Agreement (other than the provisions of Paragraphs 4, 5, 6, 8, 9, 10, 13, 14, 15, 16, 17,
18, and 19) will be terminated by any of the following events: 
  
 (i)    By the
mutual written agreement of the Company and the Executive, 
  
 (ii)    Automatically on the death of the Executive; 
  
 (iii)    By the Company, at its option, at any time if the Executive’s conduct or performance is found to be in violation of the provisions of Paragraph 7(b)(i) or 7(b)(ii); 
  
 (iv)    By the Company, at its option, at any time if the Executive fails to comply with the
provisions of subsections (iii), (iv), (v) and (vi) of Paragraph 7(b) and if the Executive does not cure such failure within thirty (30) days after written notice thereof to the Executive (such right of cure to be available only for those acts or
omissions which may be reasonably cured by further action by the Executive); 
  
 (v)    If the Executive becomes unable to perform his duties as described herein due to injury, illness, or disability (physical or mental) during one (1) consecutive period of ninety (90) days, which incapacity
is, in the Company’s judgment (which shall be reasonable), prejudicial to the Company’s best interests; or 
  
 (vi)    If the Company terminates Executive’s employment without Just Cause (but, in such event, the Company shall pay the Severance set forth in Paragraph 4); or 
  
 (vii)    If the Executive resigns his employment. 
  
 (b)    Definition of “Just Cause”.    For purposes hereof, the
Company shall have “Just Cause” to terminate the Executive’s employment hereunder in any of the following events: 
  
 (i)    the performance of his duties in a grossly negligent manner; 

 
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 (ii)    the commission by the Executive of
any felony, any act of fraud, embezzlement, or misappropriation materially prejudicial to the Company’s best interest; 
  
 (iii)    any material breach by the Executive of any of the terms of, or the failure to perform any covenant or agreement contained in this Agreement; 
  
 (iv)    the refusal of the Executive to perform acts or services commensurate with the
Executive’s position as President of the Company, as and when reasonably requested, from the Board of Directors of the Company, except in those circumstances in which the performance of such act or service would be a violation of any valid and
existing law; 
  
 (v)    the failure or refusal of the Executive to devote
substantially all of his business time, ability, attention, efforts, and energy to the Company during regular business hours as provided herein; or 
  
 (vi)    the failure, either intentionally or with gross negligence, of the Executive to materially comply with the Company policy or
applicable law, including, without limitation, its policies concerning harassment and discrimination in the workplace. 
  
 (c)    Resignation for Good Reason.    The Executive’s employment shall be deemed to have been terminated other than for Just Cause and for “Good Reason” (as
herein so used), if Executive tenders his resignation within thirty (30) days of the occurrence of any of the following events: 
  
 (i)    any material breach by the Company of any of the terms of, or the failure to perform any covenant or agreement contained in this Agreement; 
  
 (ii)    any substantial reduction in title, position, responsibilities, or duties of the Executive;

  
 (iii)    any reduction in the Annual Salary; 
  
 (iv)    any assignment of Executive, without his consent, to a position of employment outside the
northern half of the Commonwealth of Virginia. 
  
 8.    Notices.    Any notice or communication required or permitted hereunder shall be in writing and personally delivered or mailed     by certified mail, return
receipt requested, or delivered by an overnight express courier, addressed to the Company or the Executive, as the case may be, at the addresses set forth below: 
  
 
	 If to the Company:
 	  	 C/O Deck America, Inc.
 
	  	  	 750 State Highway 121 Bypass, Suite 170
 
	  	  	 Lewisville, Texas 75067
 
	  	  	 Attn: President
 

 

 
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	 If to the Executive:
 	  	 Daniel L. Betts
 
	  	  	 15000 Beaver Creek Court
 
	  	  	 Fredericksburg, VA 22407
 

 
  
 Any parties’ address for notice may be changed by written
notice delivered to the other party in accordance with this paragraph. Any notice by certified mail shall be deemed delivered upon actual receipt. 
  
 9.    Entire Agreement.    This Agreement constitutes the entire agreement among the parties hereto relating to the subject matter hereof, and supersedes
all prior agreements and understandings, whether oral or written, with respect to the same. No modification, alteration, amendment, or rescission of or supplement to this Agreement shall be valid or effective unless the same is in writing and signed
by all parties hereto. With respect to non-competition and confidentiality obligations of Executive, in the event there is a conflict between this Agreement and the NonCompetition Agreement, the NonCompetition Agreement shall govern. 

 
 10.    Texas Law to Apply.    This Agreement shall be construed under and in
accordance with the laws of the State of Texas, and all obligations of the parties created hereunder to be performed in Dallas County, Texas. 
  
 11.    Other Instruments.    The parties hereto covenant and agree that they will execute such other instruments and documents as are or may become
necessary or convenient to effectuate and carry out this Agreement. 
  
 12.    Headings.    The headings used in this Agreement are used for administrative purposes only and do not constitute substantive matters to be considered in construing the terms of
this Agreement. 
  
 13.    Parties Bound.    This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns where permitted by this Agreement. 
  
 14.    Severability.    If any one or more of the provisions contained in this Agreement
for any reason are held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision thereof and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein. 
  
 15.    Counterparts.    This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original. 

 
 16.    Construction.    Wherever the context shall so require, all words herein
in the male gender shall be deemed to include the female or neuter gender, all singular words shall include the plural, and all plural words shall include the singular. 
  
 17.    Cost of Enforcement.    In the event attorneys’ fees or other costs are incurred to secure performance of any of
the obligations herein provided for, or to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way of prosecution or 

 
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 defense, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred therein. 
  
 18.    Waiver of Breach.    Failure of any party to protest a breach by any other party or
waiver by any party of a breach shall not operate as or be construed as a waiver of rights or remedies as to that breach and a waiver by any party of a breach shall not operate as or be construed as a waiver of rights or remedies as to any
subsequent breach by any other party. 
  
 19.    Arbitration.    In
the event of a dispute as to the application of any of the provisions of this Agreement, the parties hereby agree that the matter or dispute shall be submitted to arbitration according to the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association. The arbitration shall be conducted in Dallas County Texas. The matter shall be decided by a single arbitrator selected according to such rules. The cost of arbitration shall be borne as the arbitrator
determine. Each party shall bear its own respective attorney’s fees during the arbitration, but the arbitrator may award all or part of the reasonable attorney’s fees incurred to the prevailing party. The results of the arbitration shall
be binding upon both sides and no appeal shall be available therefrom. Notwithstanding this paragraph, the Company may seek a temporary restraining order and a temporary injunction with regard to the enforcement of the provisions of Paragraphs 5 and
6 prior to or during the pendency of any such arbitration. 
  
 20.    Receipt of
Copy.    The Executive, by his signature below, acknowledges receipt of a full and complete copy of this Agreement. 
  
 21.    Assistance of Counsel.    Executive acknowledges and agrees that Jackson Walker L.L.P., who is counsel for the Company and USHS, has represented
only their interests in the negotiation and execution of this agreement. 
  
 22.    Affiliate.    As used herein, an “affiliate” of any party means any person, corporation, partnership or other entity controlling, controlled by or under common control
with such party. 
  
 
	  	 	 U.S. HOME SYSTEMS, INC. (Guarantor)
 
	 
	  	 	  	 	 By:
 	 	  
	  	 	  	 	  	 	 

	  	 	  	 	  	 	 Murray H. Gross, President and CEO
 
	 
	  	 	  	 	 USA DECK, INC.
 
	 
	  	 	  	 	 By:
 	 	  	 	  
	  	 	  	 	  	 	 

	 
	  	 	  	 	 
DANIEL L. BETTS
 

 

 
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