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Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement ("this Agreement") is made and entered into
as of November 24, 1997 (the "Effective Date"), by and between ▇▇▇▇▇▇ Management
Co., a Pennsylvania corporation (the "Company"), and [▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇] ("Executive").
The Company hereby agrees to employ Executive, and Executive hereby
accepts such employment, on the terms and conditions hereinafter set forth.
1. POSITION.
From the Effective Date until the termination of Executive's employment
hereunder (the "Period of Employment"), Executive shall serve in the capacity
indicated on Schedule 1 hereto, and shall have the normal duties and
responsibilities commensurate with such position. During the Period of
Employment, Executive will (a) during normal business hours, devote his full
time and exclusive attention to, and use his best efforts to advance, the
business and welfare of the Company, and (b) not engage in any other employment
activities for any direct or indirect remuneration without the concurrence of
the Board, provided, however, Executive may serve on corporate, charitable and
community boards so long as such activities do not unreasonably interfere with
the performance of his duties under this Agreement and provided that any such
activities are approved in advance by the Board, which approval will not be
unreasonably withheld, and provided further that the Executive may continue to
serve on any corporate, industry association, charitable or community boards on
which he serves as of the date of this Agreement.
2. PLACE AND TERM OF EMPLOYMENT.
(a) Executive's office shall be at the location set forth on Schedule 1
attached hereto.
(b) Subject to Section 6 hereunder, the term of this Agreement shall be
three (3) years commencing on the date hereof.
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3. COMPENSATION.
3.1 BASE SALARY. During the period running from November 24, 1997
through December 31, 1997, the Company shall pay Executive a per annum Base
Salary indicated on Schedule 1 attached hereto payable in accordance with the
standard policies of the Company and subject to payroll deductions as may be
necessary or customary in respect of the Company's salaried employees in
general. Effective as of January 1, 1998, the Company shall pay Executive the
per annum Base Salary indicated on Schedule 1 attached hereto during the Period
of Employment payable in accordance with the standard policies of the Company
and subject to payroll deductions as may be necessary or customary in respect of
the Company's salaried employees in general. Thereafter Executive's Base Salary
hereunder shall be subject to annual review by the Board, provided that the
level of such Base Salary shall not be subject to reduction.
3.2 PERFORMANCE BASED COMPENSATION. In addition to the Base Salary provided for
in Section 3.1 hereof, commencing on January 1, 1998, Executive shall be
eligible to receive an annual cash bonus based upon the extent to which ▇▇▇▇▇▇
Holding Co. (PA), Inc.'s ("Holdings") consolidated Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA"), as defined in EXHIBIT 1 hereto,
equals or exceeds the percentages of target annual EBITDA with respect to such
fiscal year in accordance with the chart set forth below, in an amount equal to
a percentage of the "Bonus Amount" set forth in Schedule 1 hereto, provided,
however, that at the discretion of the Board, such bonus may be subject to
upward or downward adjustment in accordance with chart set forth below:
Percentage of Target % of Bonus (Subject Range In Which Target % of Bonus
EBITDA Target Achieved to Board Adjustment) May Be Adjusted at
Discretion of the Board
Less than 85% 0% 0%
85% or above, but below 90% 20% 10% - 30%
90% or above, but below 95% 50% 40% - 60%
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Percentage of Target % of Bonus (Subject Range In Which Target % of Bonus
EBITDA Target Achieved to Board Adjustment) May Be Adjusted at
Discretion of the Board
95% or above, but below 100% 75% 65% - 85%
100% 100% 90% - 110%
For Holdings' fiscal year ending in 1998, the EBITDA target shall be $75.4
million. The EBITDA targets for the 1999, 2000, 2001 and 2002 fiscal years are
set out in Exhibit 2, attached. For the fiscal years thereafter, the EBITDA
target shall be set by the Company's Board of Directors as part of its annual
budgeting process.
Executive shall also be eligible to receive an additional annual cash
bonus at the discretion of the Board based upon the Board's evaluation of
Executive's performance for each fiscal year of Holdings during the Period of
Employment.
4. BENEFITS.
During the Period of Employment, Executive shall be entitled to
participate in all benefit plans and programs maintained by the Company which
are available to its executive officers or employees generally, including any
and all perquisites, provided that, subject to Section 5.4 of the
Recapitalization Agreement dated October 8, 1997 and amended October 27, 1997 by
and among the Company and certain investor clients of Investcorp S.A., (i)
Executive's right to participate in such plans and programs shall not affect the
Company's right to amend or terminate the general applicability of such plans
and programs, and (ii) Executive acknowledges that he shall have no vested
rights under or to participate in any such plan or program except as expressly
provided under the terms thereof. During the two year period following the
Effective Date, the Company shall provide the Executive with the benefits
described on Exhibit 3 hereto, provided, however, the benefits so described may
be amended or terminated upon the approval of the members of the Board nominated
pursuant to Section 4(iii) of the Shareholder Rights Agreement dated as of the
date hereof among the Company, the Executive, Investcorp Investment Equity
Limited, the other holders of shares of Class D Common Stock of the
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Company and the other individuals party thereto. The Company shall provide
Executive with office space, stenographic assistance and such other facilities
and services as shall be suitable to Executive's position and adequate for the
performance of his duties hereunder.
5. EXPENSES; TAXES.
Upon presentation of acceptable substantiation therefor, the Company
will pay or reimburse Executive for such reasonable travel, entertainment and
other expenses as he may incur during the Period of Employment in connection
with the performance of his duties hereunder. Federal, state and local income
taxes shall be withheld on all cash and in-kind payments made by the Company to
Executive in accordance with applicable tax laws and regulations.
6. TERMINATION OF EMPLOYMENT.
The provisions of this Section 6 shall apply upon termination of
Executive's employment hereunder. In connection with any termination of
Executive's employment hereunder, Executive or his beneficiaries shall be
entitled to receive, pro-rated as appropriate, earned but unpaid Base Salary,
unreimbursed amounts pursuant to Section 5 hereof, and unpaid and unreimbursed
payments and benefits under, and in accordance with the terms of, applicable
benefit plans and programs, said payments being collectively referred to as
Standard Termination Payments.
6.1 FOR CAUSE OR NOT FOR GOOD REASON. If the Company terminates
Executive's employment for Cause (as hereinafter defined) or if Executive
terminates his employment other than for Good Reason (as defined in Section
6.3), the Company's obligations to compensate Executive shall in all respects
cease as of the date of such termination, except for Standard Termination
Payments. Termination of Executive's employment for "Cause" shall mean
termination by the Company because Executive:
(i) has been convicted of a felony, or has entered a plea of
guilty or NOLO CONTENDERE to a felony;
(ii) has committed an act of fraud involving dishonesty for
personal gain which is materially injurious to the Company;
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(iii) has willfully and continually refused to substantially
perform his duties with the Company (other than any such refusal resulting from
his incapacity due to mental illness or physical illness or injury), after a
demand for substantial performance has been delivered to the Executive by the
Board, where such demand specifically identifies the manner in which the Board
believes that the Executive has refused to substantially perform his duties and
the passage of a reasonable period of time for Executive to comply with such
demand; or
(iv) has willfully engaged in gross misconduct materially and
demonstrably injurious to the Company or its subsidiaries.
For purposes of this paragraph, no act or failure to act on
the Executive's part shall be considered "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company or its subsidiaries.
Notwithstanding the foregoing, with respect to termination for Cause arising out
of conduct described in clause (ii), (iii) or (iv) above, a termination shall
not be considered for Cause for purposes of this Agreement unless there shall
have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire Board, at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with his counsel
or other advisors, to be heard at such meeting), finding that in the good faith
opinion of the Board the Executive had engaged in conduct described in clause
(ii), (iii) or (iv) above and specifying the particulars thereof in detail. Such
a finding by the Board of Directors of the Company is a prerequisite to a
termination for Cause pursuant to clauses (ii), (iii) or (iv) above; PROVIDED,
HOWEVER, that such a finding may be challenged, by appropriate judicial process,
on the merits (i.e., that Cause did not exist) or on the basis that the Board's
finding was not made in good faith (provided that proof that Cause for
termination existed shall be a complete defense to any showing that the Board's
findings were not made in good faith).
If the Executive terminates his employment other than for Good Reason,
the Executive must provide the Company with thirty (30) days written notice
prior to such termination.
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6.2 UPON DEATH OR PERMANENT DISABILITY. If Executive's employment is
terminated as a result of death or Permanent Disability (as hereinafter
defined), the Company's obligation to compensate Executive shall in all respects
cease as of the date of such termination, except for Standard Termination
Payments including all applicable disability benefits. The Company may terminate
Executive's employment hereunder attributable to the "Permanent Disability" of
Executive if Executive becomes physically or mentally incapacitated or disabled
so that he is unable to perform for the Company substantially the same services
as he performed prior to incurring such incapacity or disability (the Company,
at its option and expense, is entitled to retain a physician reasonably
acceptable to Executive to confirm the existence of such incapacity or
disability, and the determination of such physician shall be binding upon the
Company and Executive), and such incapacity or disability exists for an
aggregate of six (6) calendar months in any twelve (12) calendar month period.
6.3 NOT FOR CAUSE OR FOR GOOD REASON. If (i) Executive's employment is
terminated by the Company for a reason other than Cause, Executive's death or
Executive's Permanent Disability, or (ii) Executive terminates his employment
for Good Reason (as hereinafter defined), the Company's obligation to compensate
Executive shall in all respects cease as of the date of such termination, except
(a) for Standard Termination Payments, (b) that the Company will pay to
Executive a lump sum amount equal the sum of (1) twelve (12) months of the
Executive's Base Salary in effect at the time of such termination and (2) the
bonus that the Executive received (or earned but did not receive) for the fiscal
year immediately preceding the fiscal year in which his employment terminated,
and (c) that the Company will, for a period of twelve (12) months following said
date of termination, provide Executive with retirement benefits and welfare
(including any life insurance, hospitalization, medical and disability)
benefits, substantially similar to those provided to Executive as of the date of
termination, provided that such welfare benefits shall be discontinued to the
extent Executive receives similar benefits from subsequent employment. For
purposes of this Agreement, "Good Reason" shall mean (1) except as specifically
provided herein, the assignment to the Executive of duties, or the assignment of
the Executive to a position, constituting a material diminution in the
Executive's role, responsibilities or authority compared with his role,
responsibilities or authority with the Company or its affiliates on the
Effective Date; (2) a reduction by the Company in the
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Executive's bonus opportunities or, except as specifically provided herein, base
salary as in effect on the Effective Date or as the same may be increased from
time to time; (3) unless the members of the Board appointed pursuant to Section
4(iii) of the Shareholder Agreement dated as of the date hereof agree to such
reduction or other action, any material reduction in the level of benefits
(including participation in any bonus plan) to which the Executive is entitled
under one or more employee benefit plans on the Effective Date, or the taking of
any action by the Company which would adversely affect the Executive's accrued
benefits under any such employee benefit plans or deprive the Executive of any
material fringe benefit enjoyed by the Executive on the Effective Date; (4) a
demand by the Company to the Executive to relocate to any place that exceeds a
fifty (50) mile radius beyond the location at which the Executive performed the
Executive's duties on the Effective Date; or (5) any material breach by the
Company of any provision of this Agreement.
6.4 RELEASE AND SATISFACTION. At the time of termination of Executive's
employment, Executive and the Company agree to execute mutual releases whereby
(a) Executive will release, relinquish and forever discharge the Company and any
director, officer, employee, shareholder, controlling person or agent of the
Company from any and all claims, damages, losses, costs, expenses, liabilities
or obligations, whether known or unknown (other than any such claims, damages
losses, costs, expenses, liabilities or obligations arising under (i) any
indemnification arrangement of the Company with respect to Executive, (ii) any
employee benefit plan or program (whether or not tax-qualified) covering
Executive, (iii) any stock purchase or stock option plan or agreement to which
the Company and Executive are parties (or any document executed in connection
therewith) or (iv) this Agreement, to the extent the Company or any such person
has continuing obligations pursuant to the express provisions hereof following
such termination), which Executive has incurred or suffered or may incur or
suffer as a result of Executive's employment by the Company or the termination
of such employment, and (b) the Company will release, relinquish and forever
discharge Executive and his heirs, successors and assigns from any and all
claims, damages, losses, costs, expenses, liability or obligations, whether
known or unknown (except as set forth in Section 6.5 hereof and other than any
such claims, damages, losses, costs, expenses, liabilities or obligations
arising under any of the arrangements or agreements referred to in clauses (i)
through (iii) in the preceding clause (a) of
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this Section 6.4 or under this Agreement to the extent Executive or any such
person has continuing obligations pursuant to the express provisions hereof
following such termination), which the Company has incurred or suffered or may
incur or suffer as a result of the Company's employment of Executive or the
termination of such employment.
6.5 EFFECT ON THIS AGREEMENT. The termination of Executive's employment
shall not affect the continuing operation and effect of Sections 6.4 and 7
hereof, nor affect any obligation of the Company to make payments pursuant to
Section 6 hereof, which shall continue in full force and effect upon the Company
and Executive, and its and his heirs, successors and assigns. Nothing in Section
6.1 or 6.4 hereof shall be deemed to operate or shall operate as a release,
settlement or discharge of any liability of Executive to the Company (a) from
any act or omission by Executive enumerated in Section 6.1 which constituted a
reason for termination of Executive's employment for Cause or (b) in connection
with any amount Executive owes to the Company pursuant to a loan or other
advance.
6.6 MITIGATION. Executive shall not be required to mitigate the amount
of any payment provided for under this Agreement by seeking other employment or
otherwise nor will any payments provided for herein be subject to offset in
respect of any claims which the Company may have against Executive and, except
as specifically provided herein, the amount of any payment or benefit provided
for in this Agreement shall not be reduced by any compensation earned or
benefits received by Executive as the result of employment by a future employer,
by offset against any amount claimed to be owed by him to the Company, or
otherwise.
7. NON-COMPETITION; NON-DISCLOSURE OF PROPRIETARY INFORMATION, SURRENDER
OF RECORDS; INVENTIONS AND PATENTS.
7.1 NON-COMPETITION
(a) Executive acknowledges that in the course of his
employment with the Company he will become familiar with the trade secrets and
other confidential information of the Company and its subsidiaries and that his
services will be of special, unique and extraordinary value to the Company.
Therefore, Executive agrees that, during the Period of Employment and for two
years thereafter (the "Noncompete Period"), he shall not directly or indirectly
own,
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manage, control, participate in, consult with, render services for, or in
any manner engage in any business competing with the businesses of the Company
or any of its subsidiaries (i) which relates to (A) the manufacturing or sale of
climbing equipment or (B) aluminum extrusion or (ii) which is commenced by the
Company or any of its subsidiaries after the Effective Date and as of the date
of termination constitutes or will constitute a material portion of the
Company's overall future business within the United States and any other
geographical area in which the Company or any of its subsidiaries engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another entity (i) induce or attempt to induce any
employee of the Company or any of its subsidiaries to leave the employ of such
person, or in any way interfere with the employee relationship between the
Company or any of its subsidiaries and any employee thereof, (ii) hire any
person who was an employee of the Company or any subsidiary of the Company at
any time during the Employment Period (other than individuals who have not been
employed by the Company or any subsidiary of the Company for a period of at
least one year prior to employment by Executive directly or indirectly through
another entity), or (iii) induce or attempt to induce any customer, supplier,
licensee or other person having a business relationship with the Company or any
of its subsidiaries (A) which relates to (x) the manufacturing or sale of
climbing equipment or (y) aluminum extrusion or (B) which is commenced by the
Company or any of its subsidiaries after the Effective Date and as of the date
of termination constitutes or will constitute a material portion of the
Company's overall future business to cease doing business with the Company or
such subsidiaries, or interfere materially with the relationship between any
such customer, supplier, licensee or other person having a business relationship
with the Company or any of its subsidiaries.
7.2 PROPRIETARY INFORMATION. Executive agrees that he shall not use for
his own purpose or for the benefit of any person or entity other than the
Company or its shareholders or affiliates, nor otherwise disclose to any
individual or entity at any time while he is employed by
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the Company or thereafter any proprietary information of the Company unless such
disclosure (a) has been authorized by the Board, (b) is in the good faith
judgment of Executive required in the course of Executive's employment
hereunder, (c) is in the course of such individual's or entity's employment or
retention by the Company, or (d) is required by law, a court of competent
jurisdiction or a governmental or regulatory agency. For purposes of this
Agreement, the term "proprietary information" shall mean: (a) the name or
address of any customer, supplier or affiliate of the Company or any information
concerning the transactions or relations of any customer, supplier or affiliate
of the Company or any of its shareholders; (b) any information concerning any
product, technology or procedure employed by the Company, but not generally
known to its customers, suppliers or competitors, or under development by or
being tested by the Company, but not at the time offered generally to customers
or suppliers; (c) any information relating to the marketing methods, sales
margins, discounts, rebates, supplier incentives, or the like, the capital
structure, or results of any business plan of the Company; (d) any information
contained in the Company's policies and procedures or employees' manual; (e) any
inventions, innovations, trade secrets or other items covered by Section 7.4
below; and (f) any other information which the Board has determined by
resolution and communicated to Executive to be confidential or proprietary.
However, proprietary information shall not include any information that is or
becomes generally known to the public other than through actions of Executive in
violation of Sections 7.1, 7.2 or 7.3 hereof.
7.3 CONFIDENTIALITY AND SURRENDER OF RECORDS. Executive agrees that,
while he is employed by the Company or at any time thereafter, he shall not
except as required by law give any "confidential records" (as hereinafter
defined) to, or permit any inspection or copying of confidential records by, any
individual or entity other than in the course of such individual's or entity's
employment or retention by the Company or as required by law, a court of
competent jurisdiction, or a governmental or regulatory agency, nor shall he
retain any of the same following termination of this employment, without the
prior approval of the Board. For purposes hereof, "confidential records" means
all correspondence, memoranda, files, manuals, financial, operating or marketing
records, magnetic tape, or electronic or other media of any kind which may be in
Executive's possession or under his control or accessible to him which contain
any proprietary information as defined in Section 7.2 above.
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7.4 INVENTIONS AND PATENTS. Executive agrees that all inventions,
innovations, trade secrets, patents and processes in any way relating, directly
or indirectly, to the Company's or its subsidiaries' businesses developed by him
alone or in conjunction with others at any time during his employment by the
Company shall belong to the Company. Executive will use his best efforts to
perform all actions reasonably requested by the Board to establish and confirm
such ownership by the Company.
7.5 DEFINITION OF COMPANY. For purposes of this Section 7, the term
"Company" shall include Holdings and any and all of its subsidiaries, ventures
or affiliates (including the Company and any and all of its subsidiaries,
ventures or affiliates) whether currently existing or hereafter formed.
7.6 ENFORCEMENT. The parties hereto agree that the duration and area
for which the covenants set forth in Section 7 are to be effective are
reasonable. In the event that any court or arbitrator determines that the time
period or the area, or both of them, are unreasonable and that any of the
covenants are to that extent unenforceable, the parties hereto agree that such
covenants will remain in full force and effect, first, for the greatest time
period, and second, in the greatest geographical area that would not render them
unenforceable. The parties intend that this Agreement will be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America. Executive agrees that damages are an
inadequate remedy for any breach of the covenants in this Section 7 and that the
Company will, whether or not it is pursuing any potential remedies at law, be
entitled to equitable relief in the form of preliminary and permanent
injunctions without bond or other security upon any actual or threatened breach
of this Agreement.
8. MISCELLANEOUS.
8.1 NOTICE. Any notice required or permitted to be given hereunder
shall be deemed sufficiently given if sent by registered or certified mail,
postage prepaid, addressed to the addressee at his or its address last provided
the sender in writing by the addressee for purposes of receiving notices
hereunder or, unless or until such address shall be so furnished, to the address
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indicated opposite his or its signature to this Agreement. Each party may also
provide notice by sending the other party a facsimile at a number provided by
such other party.
8.2 MODIFICATION AND NO WAIVER OF BREACH. No waiver or modification of
this Agreement shall be binding unless it is in writing signed by the parties
hereto. No waiver by a party of a breach hereof by the other party shall be
deemed to constitute a waiver of a future breach, whether of a similar or
dissimilar nature, except to the extent specifically provided in any written
waiver under this Section 8.2.
8.3 GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the Commonwealth of Pennsylvania,
and all questions relating to the validity and performance hereof and remedies
hereunder shall be determined in accordance with such law.
8.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.
8.5 CAPTIONS. The captions used herein are for ease of reference only
and shall not define or limit the provisions hereof.
8.6 ENTIRE AGREEMENT. This Agreement together with any agreement, plans
or other documents implementing the terms of this Agreement constitute the
entire agreement between the parties hereto relating to the matters encompassed
hereby and supersede any prior oral or written agreements provided, however,
that the Company acknowledges the cash payments due Executive pursuant to the
Employee Protection Agreement between Executive and the Company.
8.7 ASSIGNMENT. The rights of the Company under this Agreement may,
without the consent of Executive, be assigned by the Company, in its sole and
unfettered discretion, to any person, firm, corporation or other business entity
which at any time, whether by purchase, merger, or otherwise, directly or
indirectly, acquires all or substantially all of the stock, assets or business
of the Company.
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8.8 NON-TRANSFERABILITY OF INTEREST. None of the rights of Executive to
receive any form of compensation payable pursuant to this Agreement shall be
assignable or transferable except through a testamentary disposition or by the
laws of descent and distribution upon the death of Executive. Any attempted
assignment, transfer, conveyance, or other disposition (other than as aforesaid)
of any interest in the rights of Executive to receive any form of compensation
to be made by the Company pursuant to this Agreement shall be void.
8.9 ARBITRATION. Any dispute, claim or controversy arising out of or
relating to this Agreement, or the breach, termination or validity hereof, shall
be finally settled by arbitration in accordance with the then-prevailing
Commercial Arbitration Rules of the American Arbitration Association, as
modified herein ("Rules"). There shall be one arbitrator who shall be jointly
selected by the parties. If the parties have not jointly agreed upon an
arbitrator within twenty days of respondent's receipt of claimant's notice of
intention to arbitrate, either party may request the American Arbitration
Association to furnish the parties with a list of names from which the parties
shall jointly select an arbitrator. If the parties have not agreed upon an
arbitrator within ten days of the transmittal date of the list, then each party
shall have an additional five days in which to strike any names objected to,
number the remaining names in order of preference, and return the list to the
American Arbitration Association, which shall then select an arbitrator in
accordance with Rule 13 of the Rules. The place of arbitration shall be
Pittsburgh, Pennsylvania. By agreeing to arbitration, the parties hereto do not
intend to deprive any court of its jurisdiction to issue a pre-arbitral
injunction, pre-arbitral attachment or other order in aid of arbitration. The
arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections
1-16. Judgment upon the award of the arbitrator may be entered in any court of
competent jurisdiction. Each party shall bear its or his own costs and expenses
in any such arbitration and one-half of the arbitrator's fees and expenses.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first written above.
▇▇▇▇▇▇ MANAGEMENT CO.,
a Pennsylvania Corporation.
By:
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Name:
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Address for Notices: Title:
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▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
With a copy to: Consented and Agreed to for
the purposes of guaranteeing the
obligations of the Company under
Sections 3, 6.2, and 6.3:
Investcorp International Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. (▇▇), INC., a
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Pennsylvania Corporation.
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
By:
--------------------------------
Name:
-----------------------------
Title:
----------------------------
EXECUTIVE
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Address for Notices:
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SCHEDULE 1
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TITLE LOCATION OF BASE SALARY BASE SALARY BONUS AMOUNT
OFFICE (11/24/97-12/31/97) 1/1/98-11/24/00 AS A
PERCENTAGE
OF BASE SALARY
DMW: Chairman of the Greenville, Pa. $420,000.00 406,000.00 90%
Board; President; CEO
HLS: Vice Chairman of the Greenville, Pa. 417,500.00 385,000.00 90%
Board; Senior Vice President
EJW: Secretary, Vice Greenville, Pa. 217,500.00 183,000.00 60%
President; General Counsel
MEW: Vice President Franklin Park, Ill. 217,500.00 234,000.00 70%
CRW: Vice President Franklin Park, Ill. 217,500.00 187,000.00 60%
MJS: Vice President Franklin Park, Ill. 200,000.00 167,000.00 60%
BDW: Vice President Franklin Park, Ill. 217,500.00 181,000.00 60%
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EXHIBIT 1
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EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA") is defined as Consolidated Net Income (loss) of the Company and its
subsidiaries as it would appear on a statement of income (loss), which shall (i)
exclude or be adjusted otherwise for all acquisitions and additional equity
contributions to the extent such acquisitions and/or equity contributions
materially change target EBITDA for any particular Fiscal Year, (ii) reflect a
reduction for all management and employment bonuses payable with respect to the
Fiscal Year of the Company prepared in accordance with U.S. GAAP consistently
applied and (iii) be adjusted for any material Board approved amendment to the
capital expenditure plan: plus (minus) the following amounts, to the extent such
amounts are otherwise taken into account in determining EBITDA (prior to
adjustment):
1. Any provision (benefit) for taxes (including franchise taxes)
deducted (added) in calculating such consolidated net income (loss); plus
2. Any interest expense (net of interest income), deducted in
calculating such consolidated net income (loss); plus
3. Amortization expenses deducted in calculating consolidated net
income (loss); plus
4. Depreciation expense deducted in calculating consolidated net income
(loss); plus
5. Management fees paid to Investcorp; plus (minus)
6. Any unusual losses (gains) deducted (added) in calculating
consolidated net income (loss). (Unusual items are intended to include
transactions considered outside the ordinary course of business. EBITDA will be
adjusted to eliminate the effects, if any, of such
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transactions, the intent being to calculate EBITDA as if such transactions had
not occurred; plus (minus)
7. Any compensation expense (income) deducted (added) in calculating
consolidated net income (loss) attributable to transactions involving equity
securities of the Company or its subsidiaries.
The Executive and his representative shall be provided reasonable
opportunity to review the computation of EBITDA and reasonable access to the
data and information supporting much computation, but the Board's determination
shall be conclusive and binding.
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EXHIBIT 2
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EBITDA Targets for Fiscal Years 1998-2002
FISCAL YEAR EBITDA TARGET
(IN MILLIONS OF DOLLARS)
1998 $ 75.4
1999 $ 93.9
2000 $118.4
2001 $134.8
2002 $146.9
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EXHIBIT 3
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LIST OF CURRENT EMPLOYEE BENEFITS
Term Life Insurance
Other Life Insurance (after 10 Years of Service)
Travel Insurance
Supplemental Pension Plan
Personal Financial Planning Program
Tax Planning and Preparation
Estate Planning
Officers' Salary Continuation Plan
Officers'/Directors' Health and Dental Insurance Continuation Plan
Company Car
Vacation
Laptop Computer
Cellular Telephone
Internet E-Mail and Web Surfing Account
Annual Supplemental Physical Reimbursement
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