EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 4, 1997 by and between JANUS INDUSTRIES, INC.,
a Delaware corporation, with its principal offices located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇, with an
address at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("Employee");
R E C I T A L S:
WHEREAS, the Company currently has had limited operations and is seeking
potential acquisition candidates as contemplated by the Amended and Restated
Plan of Reorganization (the "Plan") of United States Lines, Inc. ("US Lines")
and United States Lines (S.A.), Inc., approved by the United States Bankruptcy
Court for the Southern District of New York; and
WHEREAS, the Company proposes to acquire certain hotel properties, hotel
management contracts and certain other assets pursuant to certain transactions
with ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and certain of their affiliates (the
"Acquisition"); and
WHEREAS, the Company desires to continue to employ Employee after the
Acquisition and Employee is desirous of and wishes to continue such an
employment arrangement, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, it is agreed as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
1.1 "Affiliate" shall mean a corporation which, directly or indirectly,
controls, is controlled by or is under common control with the Company, and for
purposes hereof, "control" shall mean the ownership of 20% or more of the Voting
Stock of the corporation in question.
1.2 "Basic Salary" shall have the meaning assigned to that term in Section
6.1 of this Agreement.
1.3 "Board" shall mean the Board of Directors of the Company as duly
constituted from time to time. Any action of the Board hereunder with respect to
this Agreement shall require the approval of a majority of the whole Board of
Directors of the Company.
1.4 "Business" shall mean the business conducted by the Company or any
Subsidiary, directly or indirectly, including, but not limited to, the ownership
and operation of hotel properties.
1.5 "Cause" shall mean any of the following:
(a) The conviction of Employee for a felony, or the willful commission
by Employee of a criminal act that in the reasonable judgment of the Board
causes or will likely cause substantial economic damage to the Company or
substantial injury to the business reputation of the Company;
(b) The willful commission by Employee of an act of fraud in the
performance of such Employee's duties on behalf of the Company or a Subsidiary;
or
(c) The continuing willful failure of Employee to perform the
substantive duties of the Employee to the Company (other than any such failure
resulting from Employee's incapacity due to physical or mental illness) after
written notice thereof (specifying the particulars thereof in reasonable detail)
and a reasonable opportunity to be heard and cure such failure are given to
Employee by the Board.
For purposes of this subparagraph, no act, or failure to act, on
Employee's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interests of the Company or a Subsidiary.
1.6 "Change of Control" shall mean:
(A) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Act")), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or a Subsidiary, which becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities;
(B) 33-1/3% of the Board of Directors consists of individuals other than
the members of the Board of Directors on the date hereof (the "Incumbent
Directors"); provided, however, that any person becoming a director subsequent
to such date whose election or nomination for election was approved by at least
two-thirds of the directors who at the time of such election or nomination
comprised the Incumbent Directors shall for purposes of this definition be
considered an Incumbent Director;
(C) the shareholders of the Company approve, or if no shareholder approval
is required or obtained, the Company completes a merger, consolidation or
similar transaction of the Company with or into any other corporation, or a
binding share exchange involving the Company's securities occurs, other than any
such transaction which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 75% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such transaction; or
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(D) the shareholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets. A Change of Control shall not occur
as a result of the Acquisition.
1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules, regulations and interpretations issued thereunder.
1.8 "Commencement Date" shall be the day prior to the day of the
consummation of the Acquisition.
1.9 "Confidential Information" shall include, without limitation by reason
of specification, any information, including, without limitation, trade secrets,
operational methods, methods of doing business, technical processes, formulae,
designs and design projects, inventions, research projects, strategic plans,
possible acquisition information and other business affairs of the Company or
its Affiliates, which (i) is or are designed to be used in, or are or may be
useful in connection with, the Business of the Company, any Subsidiary or any
Affiliate of any thereof, or which, in the case of any of these entities,
results from any of the research or development activities of any such entity,
or (ii) is private or confidential in that it is not generally known or
available to the public, except as the result of unauthorized disclosure by or
information supplied by Employee, or (iii) gives the Company or a Subsidiary or
any Affiliate an opportunity or the possibility of obtaining an advantage over
competitors who may not know or use such information or who are not lawfully
permitted to use the same.
1.10 "Date of Termination" shall mean the Term Date, or any date upon which
this Agreement shall terminate pursuant to Section 8 hereof.
1.11 "Disability" shall mean the inability of Employee to perform
Employee's duties of employment for the Company, if employed by the Company or a
Subsidiary, pursuant to the terms of this Agreement and by-laws of the Company
as hereinafter provided, because of physical or mental disability, where such
disability shall have existed for a period of more than 90 consecutive days or
an aggregate of 120 days in any 365 day period. The existence of a Disability
means that Employee's mental and/or physical condition substantially interferes
with Employee's performance of his substantive duties for the Company and/or its
Subsidiaries as specified in this Agreement. The fact of whether or not a
Disability exists hereunder shall be determined by professionally qualified
medical experts selected by the Board and reasonably acceptable to the Employee
or his agent.
1.12 "Duties" shall have the meaning assigned to that term in Section 2.1
of this Agreement.
1.13 "Employment Year" shall mean each twelve-month period, or part
thereof, during which Employee is employed hereunder, commencing on the
Commencement Date and on the same day of the subsequent calendar year and each
consecutive 12 month period thereafter.
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1.14 "Good Reason" shall have the meaning given such term in Section 8.6.
1.15 "Normal Retirement Date" shall mean the month in which the Employee
turns age 62 or such earlier date as the Employee may elect to retire under the
retirement plan(s) of the Company without the consent of the Company.
1.16 "Panel" shall have the meaning given such terms in Section 9.
1.17 "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
1.18 "Subsidiary" shall mean a corporation of which more than 50% of the
Voting Stock is owned, directly or indirectly, by the Company, including, but
not limited to JI Subsidiary, Inc.
1.19 "Term" shall mean the term of employment of Employee under this
Agreement.
1.20 "Term Date" shall have the meaning assigned to that term in Section 3
of this Agreement.
1.21 "Voting Stock" shall mean capital stock of a corporation which gives
the holder the right to vote in the election of directors for such corporation
in the ordinary course of business and not as the result of, or contingent upon,
the happening of any event.
Wherever from the context it appears appropriate, each word or phrase
stated in either the singular or the plural shall include the singular and the
plural, and each pronoun stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and neuter.
2. EMPLOYMENT AND DUTIES OF EMPLOYEE
2.1 Employment; Title; Duties. The Company hereby employs Employee, and
Employee hereby accepts appointment, as President of the Company. The duties of
Employee shall be to have general supervisory authority over the business of the
Company and its Subsidiaries, to prepare and implement a strategic plan for the
Company, including the seeking out and consummation of acquisitions for the
Company, to perform due diligence on acquisition proposals, to pursue the
objectives of the Business, to perform generally those responsibilities assigned
to him by the Board or the Chairman of the Board, and to render services as are
necessary and desirable to protect and to advance the best interests of the
Company and its Subsidiaries (collectively, the "Duties"), acting, in all
instances, under the supervision of and in accordance with the policies set by
the Board or the Chairman of the Board.
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2.2 Performance of Duties. Employee shall devote substantially all his
working time to perform the Duties as an executive of the Company and for the
performance of such other executive duties as are assigned to him from
time-to-time by the Board or the Chairman of the Board. During the Term,
Employee: (i) shall comply with all laws, statutes, ordinances, rules and
regulations relating to the Business, and (ii) shall not engage in or become
employed, directly or indirectly, in a business which competes with the Business
of the Company and its Subsidiaries, without the prior written consent of the
Board or the Chairman of the Board, nor shall he act as a consultant to or
provide any services to, whether on a remunerative basis or otherwise, the
commercial or professional business of any other Person which competes with the
Business of the Company and its Subsidiaries, without such written consent,
which, in both instances, may be given or withheld by the Board in its absolute
discretion.
3. TERM OF EMPLOYMENT
The employment of Employee pursuant to this Agreement commenced as of
the Commencement Date and shall end three years thereafter, unless sooner
terminated pursuant to Section 8 (the "Term Date").
4. TERMINATION OF EMPLOYMENT AGREEMENT
Upon the Commencement Date, the Employment Agreement dated as of
September 1, 1995 between the Company and Employee, shall terminate without
further liability of the Company except any obligation to issue stock or stock
options and except to pay amounts accrued and unpaid prior to the Commencement
Date and except that the bonus due under Section 6.2 thereof with respect to the
year ended December 31, 1997 will be paid pursuant to Section 6.2 of this
Agreement with respect to the portion of that year prior to the Commencement
Date.
5. COMPENSATION AND BENEFITS
The Company shall pay Employee, as compensation for all of the
services to be rendered by him hereunder during the Term, and in consideration
of the various restrictions imposed upon Employee during the Term and the
Restricted Period, and otherwise under this Agreement, the Basic Salary and
other benefits as provided for and determined pursuant to Sections 6 and 7,
inclusive, of this Agreement; provided, however, that no compensation shall be
paid to Employee under this Agreement for any period subsequent to the
termination of employment of Employee for any reason whatsoever, except as
provided in Section 8.
6. BASIC SALARY/BONUS
6.1 Basic Salary. The Company shall pay Employee, as compensation for all
of the services to be rendered by him hereunder during each Employment Year, a
salary of $200,000 per Employment Year (as adjusted upward by the Board from
time to time) (the "Basic Salary"), payable in substantially equal monthly
payments, less such deductions or amounts as are required to be deducted or
withheld by applicable laws or regulations, deductions for employee
contributions to welfare benefits provided by the Company to Employee and such
other deductions or amounts, if any, as are authorized by Employee. The Basic
Salary shall be prorated for the month in which employment by the Company or a
Subsidiary commences or terminates, and for any Employment Year which is less
than twelve (12) months in duration. The Basic Salary may be increased from
time-to-time by the Board (without Employee's participation as a director) and,
once increased, shall not thereafter be reduced. The Basic Salary shall be
reviewed at least once in every Employment Year by a committee of the Board
responsible for determining compensation of senior management of the Company,
each of the members of which is a "non-employee-director" as defined in Rule
16b-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended (the "Committee"). Any increase in Basic Salary shall
not serve to offset or reduce any other obligation to Employee under this
Agreement.
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6.2 Bonus. Employee will be awarded and, unless deferred by Employee, paid
a cash bonus (the "Bonus") for each Employment Year within ninety days after the
close of the fiscal year of the Company ending within such Employment Year in an
amount determined in accordance with the Company's then-current bonus or
incentive compensation plan in an amount appropriate for the President of the
Company. The Committee in consultation with Employee shall establish in advance
of each fiscal year of the Company during the Term goals and levels of the Bonus
for such fiscal year which shall be related to the estimated budget for the
Company for such fiscal year.
6.3 Equity Participation. The Company hereby grants to Employee a stock
appreciation right in the form attached as Exhibit A hereto for 100,000 shares
of common stock of the Company at an exercise price of $3.25 per share vesting
as to 20,000 shares on the Commencement Date and as to 20,000 shares on each
anniversary of the Commencement Date thereafter subject to earlier vesting as
provided in Exhibit A.
7. ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES
7.1 Additional Benefits. The Company shall provide the following additional
benefits to Employee during the Term:
(i) an annual allowance of $2,000 on account of dental expenses incurred by
Employee and his spouse and family against the presentation of bills for same;
(ii) provision of a comprehensive medical indemnity policy for Employee and
his family having terms no less favorable than the coverage made available to
Employee and his family on the day prior to the Commencement Date and up to
$2,000 in additional out-of-pocket medical payments;
(iii) such other benefits as the Board shall lawfully adopt and approve for
Employee;
(iv) fifteen working days of paid vacation;
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(v) an annual payment of $10,000 for the purchase of an annuity for the
Employee; such annual payment to be grossed up for income taxes thereon and,
income taxes on such gross up in each case at Employee's highest marginal rate;
(vi) term life insurance coverage in the amount of $1,000,000 to the extent
the same is available at normal market rates; and
(vii) long term disability insurance coverage to the extent customarily
available from the insurance market place at normal commercial rates at the
level of 60% of Employee's Basic Salary less payments from social security or
other governmental programs, but to the extent such insurance coverage is less
than 60% of Employee's Basic Salary less payments from social security and other
governmental programs, the Company will pay such shortfall in the event of a
Disability of Employee.
7.2 Reimbursement for Expenses. The Company shall pay or reimburse Employee
for all reasonable expenses actually incurred or paid by him during the Term in
the performance of his services under this Agreement, upon presentation of such
bills, expense statements, vouchers or such other supporting information as the
Board may reasonably require. In the event the Company requires Employee to
travel on business during the Term, Employee shall be reimbursed for any travel
expenses in accordance with this Section 7.2.
7.3 Relocation. If Employee relocates his residence to the place of the
principal office of the Company (located in northern New Jersey as of the
Commencement Date) should it be moved more than 50 miles from his then current
principal residence, then in the event of any such relocation of Employee the
Company shall pay (or reimburse Employee for) all reasonable moving expenses
incurred by Employee relating to a change of principal residence in connection
with such relocation up to a maximum of $85,000. In connection with moving
expenses incurred hereunder, the Company shall pay Employee such additional
amounts respecting taxes imposed on such moving expenses and taxes on such taxes
such that such moving expenses are received by Employee free of any income tax.
Moving expenses for purposes hereof include real estate commissions, legal fees,
and closing costs with respect to the sale of Employee's former residence, the
cost of moving household goods and automobiles, three trips by Employee and his
family to the new location, up to six months of temporary housing for Employee
and his family and closing costs and legal fees connected with purchasing a new
residence. In addition, the Company will extend a loan of up to $500,000 to
Employee to purchase a new residence for a term ending the earlier of eighteen
months from the date of the loan or six months after the sale of his residence
in northern New Jersey; provided, however that Employee shall apply excess
proceeds to such loan immediately after such sale to the extent such proceeds
exceed amounts due on loans secured by mortgages on such former residence to the
payment of the loan . The interest rate on the loan shall be at the lowest
applicable federal rate and accrued interest shall be payable at maturity of the
loan. The Company may secure the loan by a mortgage on Employee's new residence
and by a subordinate mortgage on his old residence which will be discharged upon
sale of such old residence and application of proceeds of sale as aforesaid.
Employee shall provide the Company with information regarding the value of his
residence and mortgage loans thereon.
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8. TERMINATION OF EMPLOYMENT
8.1 Death. If Employee dies during the Term, this Agreement shall
terminate, except that the Company shall continue to pay to Employee's spouse,
or in the absence of a surviving spouse, his estate, Employee's Basic Salary for
a period through the third full month following the date of death, provide
welfare benefits to his family for the balance of the stated Term as if Employee
had not died and provide for the payment of the life insurance benefit provided
for in Section 7.1.
8.2 Disability. If, during the Term, Employee has a Disability, the Company
may, at any time after Employee has a Disability, terminate Employee's
employment by written notice to him. In the event that Employee's employment is
terminated, this Agreement shall terminate except that the Company shall
continue to pay Employee's Basic Salary for a period through the third full
month following the date of the termination of his employment and provide
welfare benefits to his family for the balance of the stated Term, as if
Employee had not been terminated for Disability and pay or provide for the
payment of the disability benefit provided for in Section 7.1, until Employee
reaches age 65.
8.3 Voluntary Termination. This Agreement may be terminated by Employee at
any time with or without cause upon sixty (60) days prior written notice to the
Company. After such sixty day period, the Company shall have no further
liability to make payments hereunder except those required by law or which were
accrued and unpaid at the end of the Term.
8.4 Termination for Cause. The Company may terminate Employee's employment
hereunder for Cause at any time by written notice given to Employee by the
Board. Upon such termination Employee shall not have any right to receive any
further payments hereunder except for amounts accrued and unpaid hereunder prior
thereto and provide welfare benefits as required by law and except as provided
in Section 8.8.
8.5 Termination Without Cause. If this Agreement is terminated by the
Company without Cause, Employee shall be entitled to a lump sum payment equal to
$300,000 payable upon the Date of Termination and provide the benefits described
in Section 7.1 (except clauses (iii) and (iv)) for the balance of the then
stated Term as if this Agreement had not been terminated.
8.6. Termination for Good Reason. In the event this Agreement is terminated
by Employee for Good Reason, Employee shall be entitled to a lump sum payment
equal to $300,000 payable on the Date of Termination and provide for the
benefits described in Section 7.1 (except clauses (iii), (iv) and (vii)c) for
the balance of the then stated Term as if this Agreement had not been
terminated. For purposes of this Agreement, Good Reason shall mean:
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(a) (i) The assignment by the Company to Employee of duties which are
materially different than those of the President of the Company as described in
the by-laws of the Company as of the date of this Agreement, (ii) the removal of
Employee from, or any failure to reappoint or reelect Employee to, the highest
title held by Employee, except in connection with a termination of Employee's
employment by the Company for Cause, or by reason of Employee's death or
Disability, or (iii) the failure of Employee to be nominated or elected a
director of the Company, except in connection with a termination of Employee's
employment by the Company for Cause, or by reason of Employee's death or
Disability;
(b) A reduction or non-payment of Employee's Basic Salary or failure
to review Employee's Basic Salary as required in this Agreement;
(c) A breach by the Company of this Agreement which is not cured
within thirty (30) days after written notice thereof to the Board by Employee;
(d) Requiring Employee to be based anywhere other than the Company's
then current principal executive offices except for required travel on the
Company's business, or in the event of any relocation of Employee, the failure
of the Company to comply with Section 7.3;
(e) The failure by the Company to continue to provide Employee with
substantially the same welfare benefits (which for purposes of this Agreement
shall mean benefits under all welfare plans as that term is defined in Section
3(1) of the Employee Retirement Income Security Act of 1974, as amend), any
prerequisites, including participation on a comparable basis in retirement
plans, stock option plans, stock award plans, and other plans in which
executives of the Company of comparable title and salary participate, or with a
package of welfare benefits and prerequisites, that, though one or more of such
benefits or prerequisites may vary from those, including participation on a
comparable basis in such retirement plans, stock option plans and stock award
plans, is substantially comparable in all material respects to such welfare
benefits and prerequisites, including participation on a comparable basis in the
Company's retirement plans, stock option plans and stock award plans, taken as a
whole;
(f) The failure of the Company to award or pay Employee the Bonus as
provided in this Agreement or the failure of the Company to provide Employee
with the benefits provided for in Section 6.3 or 7 of this Agreement;
(g) The failure of the Company to obtain the express written
assumption of and agreement to perform this Agreement by any successor as
contemplated in Section 14 hereof; or
(h) A Change of Control shall occur.
8.7 Notice of Termination. Any purported termination of employment by the
Company by reason of Employee's Disability or for Cause, or by Employee for Good
Reason shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice given by Employee or the Company, which shall indicate the specific basis
for termination of employment and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for determination of any payments
under this Agreement.
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8.8 Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date of termination of employment specified in the
Notice of Termination, which shall not be more than ninety (90) days after such
Notice of Termination is given, as such date may be modified pursuant to the
following two sentences. If within thirty (30) days after any Notice of
Termination is given, the party who receives such Notice of Termination notifies
the other party that a Dispute exists (a "Notice of Dispute"), the Date of
Termination shall be the date on which the Dispute is finally determined, either
by mutual written agreement of the parties, by the Panel, or by a final
judgment, order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been perfected); provided
that the Date of Termination shall be extended by a Notice of Dispute only if
such notice is given in good faith and the party giving such notice pursues the
resolution of such Dispute with reasonable diligence and provided further that
pending the resolution of any such Dispute, the Company shall continue to pay
Employee the same Basic Salary and to provide Employee with the same or
substantially comparable welfare benefits and prerequisites, including
participation in the Company's retirement plans, profit sharing plans, to the
extent then so available at the date of such determination, stock option plans,
stock award plans or stock appreciation right plans that Employee was paid and
provided to the extent that such continued participation is possible under the
general terms and provisions of such plans, programs and benefits but in no
event beyond the Term Date. Should a Dispute ultimately be determined in favor
of the Company, then all sums (net of tax withholdings by the Company from such
sums) paid by the Company to Employee from the Date of Termination specified in
the Notice of Termination until final resolution of the Dispute pursuant to this
paragraph shall be repaid promptly by Employee to the Company, all options,
rights and stock awards granted to Employee during such period shall be
cancelled or returned to the Company, and no service as an employee shall be
credited to Employee for such period for pension purposes. Employee shall not be
obligated to pay to the Company the cost of providing Employee with welfare
benefits and prerequisites for such period unless the final judgment, order or
decree of a court arbitration panel or other body resolving the Dispute
determines that Employee acted in bad faith in giving a Notice of Dispute.
Should a Dispute ultimately be determined in favor of Employee, then Employee
shall be entitled to retain all sums paid to Employee under this subparagraph
pending resolution of the Dispute and shall be entitled to receive, in addition,
the payments and other benefits provided for in Section 8 to the extent not
previously paid hereunder and the payment of Employee's reasonable legal fees
incurred as a result of such Dispute upon submission to the Company of a
detailed statement of fees from Employee's attorneys.
9. ARBITRATION
Except as otherwise provided herein, the parties hereby agree that any
Dispute or any dispute regarding the rights and obligations of any party under
this Agreement or under any law governing the relationship created by this
Agreement, including without limitation Employee's challenge of a purported
termination for Cause or Disability, must be resolved pursuant to this Section
9. Within seven (7) days of either party's written notice to the other of his or
its desire to submit any Dispute or arbitrable matter as set forth herein to
arbitration, the parties will meet to attempt to amicably resolve their
differences and, failing such resolution, either or both of the parties may
submit the matter to mandatory and binding arbitration with the Center for
Public Resources ("CPR"). The issue(s) in dispute shall be settled by
arbitration in accordance with the Center for Public Resources Rules for
Non-Administered Arbitration of Business Disputes, by a panel of three
arbitrators (the "Panel"). The only issue(s) to be determined by the Panel will
be those issues specifically submitted to the Panel. The Panel will not extend,
modify or suspend any of the terms of this Agreement. The arbitration shall be
governed by the United States Arbitration Act, 9 U.S.C. ss.1-16, and judgment
upon the award rendered by the Panel may be entered by any court having
jurisdiction thereof. A determination of the Panel shall be by majority vote.
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Promptly following receipt of the request for arbitration, CPR shall
convene the parties in person or by telephone to attempt to select the
arbitrators by agreement of the parties. If agreement is not reached, the
Company shall select one arbitrator and Employee shall select one other
arbitrator. These two arbitrators shall select a third arbitrator. If these two
arbitrators are unable to select the third arbitrator by mutual agreement, CPR
shall submit to the parties a list of not less than eleven (11) candidates. Such
list shall include a brief statement of each candidate's qualifications. Each
party shall number the candidates in order of preference, shall note any
objection they may have to any candidate, and shall deliver the list so marked
back to CPR. Any party failing without good cause to return the candidate list
so marked within ten (10) days after receipt shall be deemed to have assented to
all candidates listed thereon. CPR shall designate the arbitrator willing to
serve for whom the parties collectively have indicated the highest preference
and who does not appear to have a conflict of interest. If a tie should result
between two candidates, CPR may designate either candidate.
This agreement to arbitrate is specifically enforceable. Judgment upon any
award rendered by the Panel may be entered in any court having jurisdiction. The
decision of the Panel within the scope of the submission is final and binding on
all parties, and any right to judicial action on any matter subject to
arbitration hereunder hereby is waived (unless otherwise provided by applicable
law), except suit to enforce this arbitration award or in the event arbitration
is not available for any reason or in the event the Company shall seek equitable
relief to enforce Section 10 of this Agreement. If the rules of the CPR differ
from those of this Section 9, the provisions of this Section 9 will control. The
Company shall pay all the costs of arbitration including the fees of the
arbitrators, and the arbitrators shall award reasonable legal fees to Employee,
unless the arbitrators or a judicial forum shall finally determine that Employee
acted in bad faith.
10. CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS
10.1 Acknowledgment of Confidentiality. Employee understands and
acknowledges that he may obtain Confidential Information during the course of
his employment by the Company. Accordingly, Employee agrees that he shall not,
either during the Term or at any time within two years after the Date of
Termination (the "Restricted Period"), (i) use or disclose any such Confidential
Information outside the Company, its Subsidiaries and Affiliates; or (ii) except
as required in the proper performance of his services hereunder, remove or aid
in the removal of any Confidential Information or any property or material
relating thereto from the premises of the Company or any Subsidiary or
Affiliate.
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The foregoing confidentiality provisions shall cease to be applicable
to any Confidential Information which becomes generally available to the public
(except by reason of or as a consequence of a breach by Employee of his
obligations under this Section 10).
In the event Employee is required by law or a court order to disclose
any such Confidential Information, he shall promptly notify the Company of such
requirement and provide the Company with a copy of any court order or of any law
which in his opinion requires such disclosure and, if the Company so elects, to
the extent that he is legally able, permit the Company an adequate opportunity,
at its own expense, to contest such law or court order.
10.2 Delivery of Material. Employee shall promptly, and without charge,
deliver to the Company on the termination of his employment hereunder, or at any
other time the Company may so request, all memoranda, notes, records, reports,
manuals, computer disks, videotapes, drawings, blueprints and other documents
(and all copies thereof) relating to the Business of the Company, its
Subsidiaries and its Affiliates, and all property associated therewith, which he
may then possess or have under his control.
11. SURVIVAL
The provisions of Sections 8, 9, 10, 11 and 15 shall survive
termination of this Agreement and remain enforceable according to their terms.
12. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other provisions
hereof.
13. NOTICES
All notices, demands and requests required or permitted to be given
under the provisions of this Agreement shall be deemed duly given if made in
writing and delivered personally or mailed by postage prepaid certified or
registered mail, return receipt requested, accompanied by a second copy sent by
ordinary mail, which notices shall be addressed as follows:
If to the Company:
Janus Industries, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chairman of the Board
with a copy to:
Crummy, Del Deo, Dolan, Griffinger & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
If to Employee:
▇▇▇▇▇ ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
12
By notifying the other parties in writing, given as aforesaid, any
party may from time-to-time change its address or the name of any person to
whose attention notice is to be given, or may add another person to whose
attention notice is to be given, in connection with notice to any party.
14. ASSIGNMENT AND SUCCESSORS
Neither this Agreement nor any of his rights or duties hereunder may
be assigned or delegated by Employee. This Agreement is not assignable by the
Company, including, without limitation, to any successor in interest which takes
over all or substantially all of the business of the Company, as it is conducted
at the time of such assignment, without the written consent of Employee. Any
corporation into or with which the Company is merged or consolidated or which
takes over all or substantially all of the business of the Company shall be
deemed to be a successor of the Company for purposes hereof and the Company
shall require as a condition thereof that such corporation assume this Agreement
in form and substance satisfactory to Employee. This Agreement shall be binding
upon and, except as aforesaid, shall inure to the benefit of the parties and
their respective successors and permitted assigns.
15. LIMITATION ON PAYMENTS
In the event that any payment or benefit received or to be received by
Employee in connection with the termination of Employee's employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in a Change in
Control of the Company or any person affiliated with the Company or such person)
(collectively with the payments and benefits hereunder, "Total Payments") would
not be deductible (in whole or part) as a result of section 280G of the Code by
the Company, an affiliate or other person making such payment or providing such
benefit, the payments and benefits hereunder shall be reduced until no portion
of the Total Payments is not deductible, or the payments and benefits hereunder
are reduced to zero. At Employee's request, such reduction may be effected by
extending the date the payment would otherwise be due by not more than five
years or by decreasing the amount of the payment or benefit otherwise due and
payable. For purposes of this limitation (i) no portion of the Total Payments
the receipt or enjoyment of which Employee shall have effectively waived in
writing prior to the date of payment shall be taken into account, (ii) no
portion of the Total Payments shall be taken into account which, in the opinion
of tax counsel selected by Employee and acceptable to the Company's independent
auditors, is not likely to constitute a "parachute payment" within the meaning
of section 280G(b)(2) of the Code, (iii) the payments and benefits hereunder
shall be reduced only to the extent necessary so that, in the opinion of the tax
counsel referred to in clause (ii), the Total Payments (other than those
referred to in clauses (i) or (ii)) in their entirety are likely to constitute
reasonable compensation for services actually rendered within the meaning of
section 280G(b)(4) of the Code or are otherwise not likely to be subject to
disallowance as deductions; and (iv) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by the Company's independent auditors in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.
13
16. ENTIRE AGREEMENT, WAIVER AND OTHER
16.1. Integration. This Agreement contains the entire agreement of the
parties hereto on its subject matter and supersedes all previous agreements
between the parties hereto, written or oral, express or implied, covering the
subject matter hereof. No representations, inducements, promises or agreements,
oral or otherwise, not embodied herein, shall be of any force or effect.
16.2. No Waiver. No waiver or modification of any of the provisions of this
Agreement shall be valid unless in writing and signed by or on behalf of the
party granting such waiver or modification. No waiver by any party of any breach
or default hereunder shall be deemed a waiver of any repetition of such breach
or default or shall be deemed a waiver of any other breach or default, nor shall
it in any way affect any of the other terms or conditions of this Agreement or
the enforceability thereof. No failure of the Company to exercise any power
given it hereunder or to insist upon strict compliance by Employee with any
obligation hereunder, and no custom or practice at variance with the terms
hereof, shall constitute a waiver of the right of the Company to demand strict
compliance with the terms hereof.
Employee shall not have the right to sign any waiver or modification
of any provisions of this Agreement on behalf of the Company, nor shall any
action taken by Employee reduce his obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by
instrument in writing signed by all of the parties hereto after the date hereof.
Neither this Agreement nor any of the rights of any of the parties hereunder may
be terminated except as provided herein.
17. MISCELLANEOUS
17.1 Governing Law. This Agreement shall be governed by and construed, and
the rights and obligations of the parties hereto enforced, in accordance with
the laws of the State of New Jersey.
14
17.2 Headings. The Section and Subsection headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17.3 Severability. The invalidity or unenforceability of any provision of
this Agreement shall in no way affect the validity or enforceability of any
other provisions hereof.
17.4 Obligations of Company. The Company's obligation to pay Employee the
compensation and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which
the Company may have against Employee or anyone else. All amounts payable by the
Company hereunder shall be paid without notice or demand. Except as expressly
provided herein, the Company waives all rights which it may now have or may
hereafter have conferred upon it, by statute or otherwise, to terminate, cancel
or rescind this Agreement in whole or in part. Except as provided in Section 8.7
herein, each and every payment made hereunder by the Company shall be final and
the Company will not seek to recover for any reason all or any part of such
payment from Employee or any person entitled thereto. Employee shall not be
required to mitigate the amount of any payment or other benefit provided for in
this Agreement by seeking other employment or otherwise.
17.5 Rights of Beneficiaries of Employee. This Agreement shall inure to the
benefit of, and be enforceable by, Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Employee should die while any amounts would still be payable to
Employee hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or, if there be no
such designee, to Employee's estate.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above, to be effective as of the Commencement Date.
JANUS INDUSTRIES, INC.
By:___________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board
__________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
15
JANUS INDUSTRIES, INC.
Stock Appreciation Right
Terms and Conditions
1. Stock Appreciation Right. This Stock Appreciation Right ("SAR") is
issued by Janus Industries, Inc. (the "Company"). The Committee of the Company
as provided for in the Janus Industries, Inc. 1996 Stock Option Plan ("Plan")
shall administer this SAR and its determinations regarding this SAR are final
and binding. Capitalized terms used and not otherwise defined in this
certificate have the meanings given to them in the Plan.
2. Exercisability Schedule. The SAR may be exercised at any time and from
time to time and in accordance with the exercisability schedule set forth on the
face of this certificate, provided, however, that the exercise of the SAR may
not be made prior to six months after the date of grant of the SAR. The SAR
shall be exercisable only to the extent the SAR has a positive value and may not
be exercised after the Expiration Date.
3. Method of Exercise of the SAR. To exercise this SAR, the grantee shall
deliver written notice of exercise to the Chairman of the Board of the Company
specifying the number of shares with respect to which the SAR is being
exercised. Promptly following such notice, the Company will deliver to the
grantee the payment set forth herein.
4. SAR Payment. Upon tender of this SAR, the grantee shall be entitled to
receive payment of an amount determined by multiplying the number of shares with
respect to which the SAR is being exercised by the difference obtained by
subtracting the exercise price per share of the SAR from the Fair Market Value
of a share of Stock on the Date of Exercise of the SAR (the "Payment"). The
Payment shall be made in cash.
6. Rights as a Stockholder or Employee. The grantee shall not have any
rights to continued employment by the Company or any Subsidiary by virtue of the
grant of the SAR and grantee shall not have any rights as a stockholder of the
Company by virtue of being a holder of the SAR.
7. Recapitalization, Mergers, Etc. In the event of certain corporate
transactions affecting the Company's outstanding Common Stock, the Committee
shall equitably adjust the number and kind of shares subject to the SAR and the
exercise price of the SAR. If such transaction involves a consolidation or
merger of the Company with another entity, the sale or exchange of all or
substantially all of the assets of the Company or a reorganization or
liquidation of the Company, then in lieu of the foregoing, the Committee may
upon written notice to the grantee provide that the SAR shall terminate on a
date not less than 20 days after the date of such notice unless theretofore
exercised. In connection with such notice, the Committee may in its discretion
accelerate or waive any deferred exercise period.
8. SAR Not Transferable. The SAR is not transferable by the grantee
otherwise than by will or the laws of descent and distribution, and is
exercisable, during the grantee's lifetime, only by the grantee. Any attempted
assignment, transfer, pledge, hypothecation or other disposition shall be void
and of no effect.
9. Acceleration of Vesting. The vesting of the SAR shall immediately
accelerate upon the termination of the employment of grantee with the Company as
a result of death or disability of grantee as provided for in the employment
agreement by and between the Company and grantee (the "Employment Agreement").
The vesting of the SAR shall also immediately accelerate upon the termination of
the employment of grantee with the Company for "Good Reason" by grantee or
without "Cause" by the Company as defined and provided for in the Employment
Agreement or upon the termination of the Employment Agreement for any reason
(including, but not limited to, a failure to extend the Employment Agreement)
other than termination for Cause as provided for in the Employment Agreement.
10. Payment of Taxes. The grantee shall pay to the Company, or make
provision satisfactory to the Company for payment of, any taxes required by law
to be withheld pursuant to the Payment. The Company and its Subsidiaries may, to
the extent permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to the grantee.
11. Governing Law. This SAR shall be construed and enforced in accordance
with the laws of the State of Delaware (without regard to the legislative or
judicial conflict of laws rules of any state), except to the extent superseded
by federal law.
SAR - 1 100,000 Stock Appreciation Rights
JANUS INDUSTRIES, INC.
Stock Appreciation Right Certificate
Janus Industries, Inc. (the "Company"), a Delaware corporation, hereby
grants to the person named below a Stock Appreciation Right ("SAR") with respect
to the shares of Common Stock, par value $0.01 per share, of the Company
exercisable on the following terms and conditions and those set forth on the
reverse side of this certificate:
Name of Grantee: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Social Security No.: ###-##-####
Number of SAR's: 100,000
Price: $3.25
Date of Grant: April , 1997
Exercisability Schedule
Exercise Period
---------------
Commencement
Number of SAR's Date Expiration Date
--------------- ---- ---------------
20,000 April 23, 1997 April 23, 2003
20,000 April 23, 1998 April 23, 2004
20,000 April 23, 1999 April 23, 2005
20,000 April 23, 2000 April 23, 2006
20,000 April 23, 2001 April 23, 2007
By acceptance of this SAR, the grantee agrees to the terms and conditions
hereof.
JANUS INDUSTRIES, INC.
Dated: April __, 1997 By:____________________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: Chairman of the
Compensation Committee
ACCEPTED:
__________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇