UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): April 1, 1999
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BACOU USA, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-28040 05-0470688
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(Commission file number) (IRS Employer Identification Number)
10 Thurber Boulevard, Smithfield, RI 02917
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 401-233-0333
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<PAGE>
Item 2. Acquisition or Disposition Events
(a) On April 1, 1999, Bacou USA, Inc. consummated its acquisition of the assets
of Perfect Fit Glove Co., Inc., SCHAS Circular Industries, Inc., X-Pert
Industrial Products Limited, Perfect Industrial Products, Inc. and Yadkin
Leasing Company, Inc. (collectively, "Perfect Fit"), manufacturers and
distributors of protective gloves and other related products, as well as related
assets owned by Frank A. Stucke and Joseph P. Hoerner. Bacou issued a Press
Release announcing the closing of this acquisition on April 5, 1999, which Press
Release is attached hereto as Exhibit 99. Perfect Fit manufactures the
components of its gloves in a leased facility in Wilkesboro, North Carolina,
with assembly and distribution from its owned facility near Buffalo, New York.
The assets acquired included physical property, intellectual property and
working capital. Bacou intends to continue the use of such assets for the
purpose of manufacturing and distributing protective gloves and other related
products.
Bacou acquired the assets of Perfect Fit for a purchase price of $37.8
million in cash plus the assumption of approximately $16.0 million of the
sellers' balance sheet liabilities. In addition, Bacou has agreed to pay an
additional earnout of up to $6.0 million to the extent actual consolidated cash
flow of the acquired businesses for 1999 exceeds specified targets.
In connection with the acquisition, Bacou entered into employment
agreements with four of the key executives of Perfect Fit, including Messrs.
Stucke and Hoerner.
Bacou financed this acquisition by a seven-year term loan from Banque
Nationale de Paris at an interest rate per annum equal to three-month LIBOR plus
approximately 0.5%.
Item 7. Financial Statements and Exhibits
Item 601
Exhibit Exhibit Title
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Exhibit 2.1 Asset Purchase Agreement dated February 24,
1999 among Bacou USA Safety, Inc. and Perfect Fit
Glove Co., Inc., SCHAS Circular Industries, Inc.,
X-Pert Industrial Products Limited, Perfect
Industrial Products, Inc., Yadkin Leasing Company,
Inc., Frank A. Stucke, Joseph P. Hoerner and
Edward Mesanovic (incorporated by reference to
Exhibit 2.12 of the Corporation's Form 10-K for
the fiscal year ended December 31, 1998)
Exhibit 2.2 Amendment to Asset Purchase Agreement dated
March 26, 1999
Exhibit 4.1 Credit Line Agreement between Banque Nationale
de Paris and Bacou USA, Inc. dated March 25, 1999
Exhibit 10.1* Employment Agreement dated as of April 1, 1999
between Bacou USA Acquisition Corp. and Frank A.
Stucke
Exhibit 10.2* Employment Agreement dated as of April 1, 1999
between Bacou USA Acquisition Corp. and Joseph P.
Hoerner
Exhibit 99 Press Release dated April 5, 1999
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* Management contract or compensatory plan or arrangement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BACOU USA, INC.
Registrant
By: /s/ Philip B. Barr
----------------------------------------
Philip B. Barr
Executive Vice President, Chief Operating
Officer, Chief Financial Officer and
Secretary
Dated: April 1, 1999
Exhibit 2.2
AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (the "Amendment") is made and
entered into as of March 26, 1999 by and among Perfect Fit Glove Co., Inc., a
New York corporation ("PFG"), SCHAS Circular Industries, Inc., a North Carolina
corporation ("SCHAS"), X-Pert Industrial Products Limited, a New York
corporation ("X-Pert"), Perfect Industrial Products, Inc., a New York
corporation ("PIP"), Yadkin Leasing Company, Inc., a North Carolina corporation
("Yadkin"), Frank A. Stucke, an individual residing in West Seneca, New York
("Stucke"), Joseph P. Hoerner, an individual residing in Orchard Park, New York
("Hoerner"), and Edward Mesanovic, an individual residing in Tonawanda, New York
("Mesanovic") (PFG, SCHAS, X-Pert, PIP, Yadkin, Stucke, Hoerner and Mesanovic
collectively referred to herein as "Selling Group") and Bacou USA Safety, Inc.,
a Delaware corporation ("Bacou Safety"), Bacou USA Transaction, Inc., a Delaware
corporation ("Bacou Transaction") and Bacou USA Acquisition Corp., a Delaware
corporation (Bacou Transaction and Bacou Acquisition sometimes collectively
referred to herein as "Purchaser").
WHEREAS, Selling Group and Bacou Safety entered into an Asset Purchase
Agreement dated as of February 24, 1999 (the "Purchase Agreement") according to
which Selling Group agreed to sell substantially all of its assets to Bacou
Safety and Bacou Safety agreed to assume substantially all of the liabilities of
Selling Group and to pay other consideration as set forth in the Purchase
Agreement; and
WHEREAS, the parties desire to amend the Purchase Agreement to provide that
Bacou Transaction and Bacou Acquisition serve as Purchaser in place of Bacou
Safety and to make other changes thereto, as set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. Bacou Transaction and Bacou Acquisition shall be defined as the
Purchaser in the Purchase Agreement in place of Bacou Safety.
2. Bacou Transaction shall purchase substantially all of the assets and
assume substantially all of the liabilities of SCHAS and Yadkin pursuant to the
Purchase Agreement.
3. Bacou Acquisition shall purchase substantially all of the assets and
assume substantially all of the liabilities of PFG, X-Pert and PIP pursuant to
the Purchase Agreement.
4. The parties hereto shall enter into an Assignment and Assumption
Agreement, the form of which is attached hereto as Exhibit A, to effectuate the
assignment and assumption transaction contemplated herein.
5. Notwithstanding the assignment and assumption transaction contemplated
herein, Bacou Safety shall remain liable for any and all of its obligations
under the Purchase Agreement.
6. Such other minor and technical amendments to the Purchase Agreement as
set forth on Exhibit B hereto are hereby agreed to by the parties.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
Asset Purchase Agreement to be executed by its duly authorized representative as
of the day and year first above written.
SELLING GROUP:
PERFECT FIT GLOVE CO., INC.
By: /s/ Joseph P. Hoerner
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Joseph P. Hoerner, President
By: /s/ Frank A. Stucke
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Frank A. Stucke, Vice President
SCHAS CIRCULAR INDUSTRIES, INC.
By: /s/ Joseph P. Hoerner
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Joseph P. Hoerner, President
By: /s/ Frank A. Stucke
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Frank A. Stucke, Vice President
X-PERT INDUSTRIAL PRODUCTS LIMITED
By: /s/ Frank A. Stucke
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Frank A. Stucke, President
By: /s/ Joseph P. Hoerner
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Joseph P. Hoerner, Vice
President
PERFECT INDUSTRIAL PRODUCTS, INC.
By: /s/ Edward Mesanovic
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Edward Mesanovic, President and
Secretary
YADKIN LEASING COMPANY, INC.
By: /s/ Frank A. Stucke
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Frank A. Stucke, President
By: /s/ Joseph P. Hoerner
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Joseph P. Hoerner, Vice
President
/s/ Frank A. Stucke
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Frank A. Stucke, Individually
/s/ Joseph P. Hoerner
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Joseph P. Hoerner, Individually
/s/ Edward Mesanovic
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Edward Mesanovic, Individually
<PAGE>
BACOU SAFETY:
BACOU USA SAFETY, INC.
By: /s/ Walter Stepan
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Walter Stepan, Chairman,
President and CEO
By: /s/ Philip B. Barr
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Philip B. Barr, Vice Chairman,
Secretary and Treasurer
PURCHASER:
BACOU USA TRANSACTION, INC.
By: /s/ Walter Stepan
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Walter Stepan, Chairman and
President
By: /s/ Philip B. Barr
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Philip B. Barr, Secretary and
Treasurer
BACOU USA ACQUISITION CORP.
By: /s/ Walter Stepan
-------------------------------
Walter Stepan, Chairman and
President
By: /s/ Philip B. Barr
-------------------------------
Philip B. Barr, Secretary and
Treasurer
Exhibit 4.1
CREDIT LINE
The present Credit Line ("Credit Line") is signed in RHODE ISLAND on 25 March
1999, between
BANQUE NATIONALE DE PARIS, a public company (societe anonyme) under French law
with a capital of EUR 873,955,200, whose registered offices are located at 16
boulevard des Italiens - 75009 Paris, entered on the Paris Corporate Register
under number B 662 042 449,
represented by Mr. Jean LOMBARD, Directeur du Departement Entreprises du Groupe
d'Agences de DROME-ARDECHE,
referred to hereinafter as "BNP" or "BANK"
AND
BACOU USA INC., a corporation organized and existing under the law of Delaware
with its principal office at 10 Thurber Boulevard, Smithfield, RI 02917 USA,
represented by Mr. Walter STEPAN, Vice-Chairman, President and CEO, and Mr.
Philip B. BARR Jr., Executive Vice-President and Chief Financial Officer,
referred to hereinafter as "BACOU USA" or "Borrower"
PREAMBLE
Under the terms of negotiations carried out between BACOU USA and BNP, BNP
declared that it is prepared, to grant BACOU USA a credit line of USD 50,000,000
(fifty million American dollars) under the terms and conditions set forth below.
IN WITNESS WHEREOF, IT IS AGREED AND DECIDED AS FOLLOWS BETWEEN THE PARTIES TO
THE PRESENT
ARTICLE I - AMOUNT OF THE CREDIT LINE
BNP grants BACOU USA a credit line (referred to hereinafter as the "Credit
Line") for an amount of USD 50,000,000 (fifty million American dollars).
ARTICLE II - OBJECT OF THE CREDIT LINE
The object of the Credit Line is the financing of the acquisition of the
operating assets of Perfect Fit Glove Co., Inc. of Buffalo, New York, USA, SCHAS
Circular Industries, Inc. of Wilkesboro, North Carolina, USA and certain
affiliated companies and assets related to the business of manufacturing and
selling work gloves, subject to existing liabilities, by BACOU USA.
ARTICLE III - TERM OF THE CREDIT LINE
The Credit Line is granted for a term of seven years starting from the drawing
date as defined in article V hereafter.
ARTICLE IV - REPAYMENT
The Credit Line shall be repaid quarterly as from the drawing date in twenty
seven installments of USD 1,785,700 (One million seven hundred eighty five
thousand seven hundred American dollars) and a final installment of USD
1,786,100 (One million seven hundred eighty six thousand one hundred American
dollars)
At all events, the Credit Line shall be repaid in full no later than the last
banking day of the term defined in article III above.
A banking day is defined for the needs of the present agreement as a business
day. A business day is a day on which dealings in USD are carried on in the
Paris Interbank Market, in London and in New York, and BNP is open for domestic
and foreign exchange business in Paris and wherever applicable, in financial
centers required to be open to permit dealings in connection with this
agreement.
ARTICLE V - TERMS AND CONDITIONS OF DRAWING
The Credit Line shall be drawable fully in one time during a period of twenty
days following the date of signature of the present Agreement, with a prior
notice of two banking days, through the debit of a special account constituting
a simple book statement that will have no legal effects attached to the current
account and which shall be opened for this purpose on the books of the BNP
VALENCE agency.
The drawing date means in the present Agreement the date of the debit of such
special account.
Such prior notice shall reach BNP no later than 10:00 a.m. (London time) in
accordance with the form fixed in Appendix 1 to the present agreement.
ARTICLE VI - FINANCIAL TERMS AND CONDITIONS
Interest period shall be three months, calculated as from the drawing date.
BACOU USA shall due and pay interest to BNP on the last banking day of each such
periods of three months.
a) Rate of interest:
Interest shall be calculated on the exact number of days of the period
considered based on 360 days per year at the LIBOR rate (London Interbank
Offered Rate) of the USD considered for a period of three months, calculated
under the aegis of the British Bankers Association and published by Telerate --
page 3750/3740 or by any other page that might be substituted for it - at 11:00
a.m. (London time), two working days prior to the drawing date or the beginning
of an interest period, increased by 0,35 % per year.
The rate shall be revised at each interest period.
BNP shall notify BACOU USA of the interest rate applicable to each three months
interest period.
b) Interest on arrears:
All sums (including any cost or expenses) not paid on their normal or early due
date shall bear interest ipso jure from the day of the said due date included to
the day of its full payment excluded at the interest rate applicable as defined
above, increased by 1% per year.
Interest shall be capitalized if it is due for a full year in application of
article 1154 of the Civil Code. These provisions do not apply as the granting of
a delay in payment.
c) Impossibility of determining the rate of interest:
If determination of a rate of interest has become impossible following certain
events, BNP shall notify BACOU USA thereof and the parties shall enter into
negotiation. If an agreement in view of reaching a solution is not reached
within thirty days of the said notification, BACOU USA shall repay the Credit
Line in capital, interest, expenses, incidental expenses and possible costs, its
being understood that the applicable rate of interest shall be BNP's cost of
financing, increased by 1% per year.
d) Unavailability of USD:
If BNP should observe, either on the occasion of the drawing or on the occasion
of a new interest period, that the USD currency is unavailable, it shall advise
BACOU USA thereof as rapidly as possible.
BACOU USA and BNP shall consult in order to select a replacement currency.
Failing agreement within 24 hours of the notice sent to BACOU USA by fax, the
Credit Line is considered cancelled ipso jure, and BACOU USA shall repay and pay
in FRF or in the single European currency the capital, interest, expenses,
commissions and incidental expenses and any possible costs caused to BNP by the
unavailability of the currency used.
The amount in FRF or in the single European currency being repaid and paid shall
be determined in accordance with the most recent quotation of the USD against
the FRF or the single European currency.
e) Commitment fee
0,25 % per year payable quarterly in advance and calculated starting from the
drawing date.
It shall be calculated on the basis of a year of 360 days and payable in USD.
f) Flat fee
0,08 % payable on the drawing date.
g) BACOU USA shall pay a sum of USD 9.200 for file costs on the drawing date.
ARTICLE VII - CONDITIONS PRECEDENT
No drawing will be made before payment by BACOU USA of all sums, fees and
expenses which could be due on the date of such drawing pursuant to this
Agreement and receipt by BNP in a form and substance satisfactory to it of the
following documents:
a) a certified copy of all corporate documents of BACOU USA and of the
Guarantor required to authorize the execution of this Agreement and the
Guarantee and to empower their representatives for this purpose;
b) duly authenticated specimen signatures of each of the empowered
representatives of BACOU USA and of the Guarantor,
c) a certified copy of the constitutive documents of BACOU USA,
d) the Guarantee and evidence it has been duly executed and is in full force
and effect;
e) an opinion of a legal counsel from the State of Rhode Island in the terms
of the Appendix 2 acceptable to BNP and confirming that the representations
of BACOU USA made in article VIII are true.
ARTICLE VIII - REPRESENTATIONS AND WARRANTIES
BACOU USA represents and warrants to BNP that:
- -- (i) it is a corporation duly organized, validly existing and in good
standing under the laws of the State of Rhode Island,
- -- (ii) the execution and performance of this Agreement do not contravene any
provision of law or regulation to which BACOU USA is subject,
- -- (iii) it has obtained all necessary consents, licenses or authorizations
for the execution and performance of this Agreement and especially it has
been authorized to acquire and transfer on maturity the necessary
currencies for payment of all sums due under this Agreement.;
- -- (iv) its capital stock is held of 71,70% by the Guarantor,
- -- (v) no tax, registration fee, stamp or similar duty, nor any deposit or any
registration is required in connection with this Agreement or for validity
of the same,
- -- (vi) no proceedings are underway or, to the knowledge of BACOU USA, are
about to be instituted to prevent or forbid signature or performance of the
Credit Line, or which might have a significant unfavorable effect on the
capacity of BACOU USA to perform its obligations under the present Credit
Line;
- -- (vii) no action is underway for the purposes of liquidation, dissolution or
any other similar procedure with regard to BACOU USA;
- -- (viii) there exists no fact that is likely to constitute a Case of Default;
- -- (ix) the choice of French law and the competence of the French courts
provided for in article XIV below are legitimately binding on BACOU USA and
shall be validly acknowledged by the courts of the State of Rhode Islands
and the Federal Courts of the United States of America, and consequently
any or all judgments handed down by the French Courts shall be exequatured
and enforceable in United States of America.
The representations and warranties contained in the present article shall be
considered renewed by BACOU USA at the time of request for drawing.
ARTICLE IX - COVENANTS BY BACOU USA
So long as it is a debtor or may remain a debtor pursuant to the Credit Line,
BACOU USA undertakes:
- -- to hand over to BNP all accounting documents and data that BNP might
request;
- -- to immediately inform BNP of all facts that might significantly lessen its
assets or significantly increase the volume of its commitments;
- -- to immediately inform BNP of all facts or circumstances that are likely to
constitute or become one of the cases mentioned in the article CASES OF
DEFAULT;
- -- to assume the financial consequences of changes in parity which might
intervene up to the time of full repayment of the Credit line.
ARTICLE X - NEGATIVE COVENANTS BY BACOU USA
Until payment in full of all of BACOU's USA obligations to BNP under this
Agreement, BACOU USA covenants and agrees as follows:
1 - Limitation on Borrowing
BACOU USA shall not incur, create, assume or permit to exist any Debt or
liability on account of deposits or advances or any indebtedness or liability
for borrowed money, or any indebtedness or liability evidenced by any notes,
bonds, debentures or similar obligations, including leases, except (a) Debt to
BNP (b) Debt existing as of the date of the closing of Credit Line and approved
in writing by BNP, including up to a total of USD 31,000,000 to CITIZENS BANK OF
RI under its line of credit to BACOU USA and a total of USD 6,325,000 under an
industrial revenue bond to the Wilkes County Industrial Facilities and Pollution
Control Financing Authority to be assumed at closing of the acquisition of SCHAS
Circular Industries, Inc.
c) Debt pertaining to any capitalized lease obligations provided such Debt when
combined with all other capitalized lease obligation does not exceed in the
aggregate One Million Dollars per annum (d) Debt the terms and conditions of
which have been approved in writing by BNP and which Debt is subordinated, if
required by BNP, to the prior payment of all amounts due under the Credit Line,
and (e) trade obligations incurred by BACOU USA in the ordinary course of
business.
2 - Limitation on Encumbrances
BACOU USA shall not create, incur, make, assume, or suffer to exist, after the
date hereof, any assignment, mortgage, pledge, security interest, lien or other
encumbrance of or upon any of its properties or assets, whether now owned or
hereafter acquired, to any party other than BNP, excepting (a) liens for taxes
not delinquent or being contested in good faith by appropriate proceedings
diligently pressed and as to which there have been set aside on its books
adequate reserves; (b) encumbrances existing as of the date hereof, disclosed in
writing to BNP and approved by BNP in writing, (c) liens imposed by operation of
law, such as warehouseman's or mechanics' liens, incurred by BACOU USA in good
faith and in the ordinary course of business: and (d) liens securing Debt
permitted under the 1 (Limitation on Borrowing).
ARTICLE XI - CASES OF DEFAULT
The following constitutes a Case of Default once it occurs and whatever the
reason, be it attributable to BACOU USA or not:
- -- non-payment at its due date of an amount due in principal, interest,
commission, expenses or incidental expenses by BACOU USA in performance of the
Credit Line, should it not be remedied within five days following the request
made by BNP in this sense to BACOU USA;
- -- non-compliance by BACOU USA with another commitment or covenant under the
terms of the Credit Line;
- -- any representation by BACOU USA contained in article VIII of the Credit Line
or subsequently renewed proving to be inaccurate;
- -- any debt of BACOU USA or the GUARANTOR under another contract becoming
repayable or callable prior to its normal due date following a foreclosure of
the date for payment opposed due to default;
- -- any measure taken with regard to BACOU USA or the GUARANTOR for out-of-court
settlement, court-ordered re-organization, court-order redress or court-ordered
liquidation or any other analogous measure or proceedings, with the exception of
cases of liquidation or dissolution of BACOU USA the terms and conditions of
which have been approved by BNP;
- -- significative change, in the opinion of BNP, in the shareholding of BACOU
USA, including nationalization of BACOU USA;
- -- the occurrence of an unlawful act for BACOU USA in performing any one of its
obligations under the Credit Line;
- -- the occurrence of any decision or event in United States of America or in
another country through which the payments are made, that constitutes or could
constitute an obstacle to payment by BACOU USA of any amount due to BNP under
the present Credit Line, including decisions on foreign exchange control or
embargo,
- -- the Guarantee specified in article XVI ceases to be valid or becomes
unforceable for any reason whatsoever,
At the time of the occurrence of any one of the Cases of Default, BNP shall be
entitled to pronounce immediate early repayment and payment of all sums under
the Credit Line.
ARTICLE XII - ELECTION OF DOMICILE
For performance of the present agreement and of its consequences, domicile is
elected:
- -- for BACOU USA, at its principal office address, 10 Thurber Boulevard,
Smithfield, RI, 02917 USA.
- -- for BNP, at its VALENCE agency, address 1 Boulevard Bancel, 26000 VALENCE,
FRANCE, Fax 04.75.79.43.09.
ARTICLE XIII - NEW CIRCUMSTANCES
1 The provisions of the Credit Line have been fixed in accordance with the
economic and financial conditions, both national and international, and with the
legal, fiscal, monetary and professional conditions in force at the time of the
signature of the Credit Line in France and abroad.
2 In the event of modification to the said conditions or facts or to their
interpretation by any competent authority, or for any other reason, resulting
particularly in new charges or in additional costs for BNP subsequent in
particular:
(a) to new requirements in the area of reserve requirements, quantitative
regulations on credit, institution or increase in coefficients for
liquidities, equity capital or other requirements relating to all or
part of the assets or commitments (including off-balance-sheet
commitments), or;
(b) to a modification in exchange regulations or in the applicable tax
system;
BACOU USA undertakes to compensate BNP in full for the additional charges and
costs that might be imposed on it.
Notification by BNP justifying in any form whatsoever the said charges and costs
shall be final and binding, barring error proved by BACOU USA.
In such a case, however, BACOU USA shall also have the option of making early
payment of the Credit Line in full.
ARTICLE XIV - APPLICABLE LAW AND COMPETENT JURISDICTION
The present Credit Line Agreement is governed by French law.
In the event of dispute, BACOU USA and BNP shall consult in view of an
out-of-court settlement. In the failure to reach such a settlement, all
litigation relative inter alia to the validity, interpretation or performance of
the Credit Line shall be submitted to the exclusive competence of the French
courts.
ARTICLE XV - MISCELLANEOUS PROVISIONS
1 - Expenses, taxes and duties.
BACOU USA shall bear all expenses, duties, commissions, interest or other levies
pertaining to the present Credit Line or those that might be the sequel or
consequence thereof.
In particular, BACOU USA shall cover BNP for all of its expenses and outlays,
legal fees included, made in connection with the performance of the Credit Line
and with the implementation of BNP's rights under the Credit Line upon
presentation of supporting documents.
If, through the application of a law, an international agreement or a regulation
of any kind, BACOU USA is required to carry out a withholding on payments to be
made pursuant to the present agreement, it shall pay BNP an additional amount
such that, following deduction of the tax, BNP shall receive the full amounts
due that it would have received if the withholding had not existed.
2 - Effective Global Rate (<< Taux Effectif Global >> under French law).
The effective global rate is calculated below on the date of 1999/03/16 for USD
and for a period of three months.
It is specified that, on the basis of the three-month LIBOR rate for the USD
(5,00 % at the date of 1999/03/16), taking into account fees, expenses and
margin, and on the basis of use for 360 days, full use of the said Credit Line
as of the date of 1999/03/16 would come to an effective global rate of 5,6294%.
3 - Payments.
All obligations of payment under the Credit Line, shall be paid in full by BACOU
USA by means of payments in USD to the BNP at its address referred to in article
<< ELECTION OF DOMICILE >>.
All payments by BACOU USA under this Agreement shall be made without set off or
counter claims.
BACOU USA shall not be entitled to subordinate such payments to any condition or
exception.
BACOU USA hereby authorizes BNP, at its convenience, to debit its account in USD
n(degree) 140 003/52 held on the BNP's books, for the said payments on the date
upon which the said payments are payable for their amount in USD.
4 - Voluntary prepayment. No new drawings.
BACOU USA shall be entitled to prepay in full or partially without penalty the
Credit Line, but only on the date of the repayment of an installment
hereinabove, subject to the receipt by BNP of a prior written notice at least
one month before the expected prepayment date.
Once repaid or prepaid, BACOU USA shall not be permitted to redraw any sum under
the Credit Line.
ARTICLE XVI - GUARANTEE
The BACOU's USA payment obligations hereunder shall be guaranteed by BACOU SA
herein called <<the Guarantor>> a French company, whose registered office is at
VALENCE (26000-France), 168 Avenue des Aureats, entered on the Valence Corporate
Register under number B 348 982 307, in the terms of the Appendix 3 hereto.
Signed in RHODE ISLAND, on 25 March 1999
In two true copies
BACOU USA INC. Banque Nationale de Paris
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 1st day of April, 1999, by and Frank A.
Stucke ("Executive"), currently residing at 36 Pine Tree Lane, West Seneca, New
York 14224, and Perfect Fit Glove Co., Inc., f/k/a Bacou USA Acquisition Corp.,
a corporation organized under the laws of Delaware (the "Company"), with its
principal offices at 10 Thurber Boulevard, Smithfield, RI 02917.
W I T N E S S E T H :
WHEREAS, Company wishes to secure the services of Executive as the
Executive Vice President of the Company and as Executive Vice President of SCHAS
Industries, Inc., an affiliate of the Company, for the period provided in this
Agreement; and
WHEREAS, Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
Company and Executive hereby agree as follows:
1. Employment. During the period of employment set forth in Section 2 of
this Agreement, Company shall employ Executive, and Executive shall serve as the
Executive Vice President of the Company and as Executive Vice President of SCHAS
Industries, Inc., reporting to the Chairman, President and CEO of Bacou USA
Safety, Inc. Executive agrees to faithfully perform the duties assigned to him
to the best of his ability and, except for vacations and periods of temporary
illness, to devote his full time and attention to the business of Company.
Ancillary employment such as writing, teaching or lecturing, as well as the
acceptance of honorific titles may be undertaken by the Executive only with the
approval of the Chief Executive Officer of Bacou USA, Inc. ("Bacou") or his
designee ("Chairman"). Executive also agrees that he will not engage in any
other business activities without the prior approval of the Chairman. Executive
may only serve as an officer, director, trustee or committee member, or in any
similar position, of a reasonable number (maximum two) of trade associations and
religious, charitable, educational, civic or other non-business organizations,
subject to the approval of the Chairman. The Executive represents and warrants
to Company that he is now under no contract or agreement nor will he execute any
contract or agreement that will in any manner interfere, conflict with or
prevent him from performing his duties under the terms and conditions of this
Agreement, recognizing that his performance hereunder will require the devotion
of his full time and attention during and beyond regular business hours during
the Term (as hereinafter defined), including extensive travel.
2. Period of Employment. The Executive's employment under this Agreement
shall initially cover the period beginning April 1, 1999 to December 31, 2004
(the "Initial Term"). On January 1, 2004, and at the end of each year
thereafter, the period of employment shall be automatically extended, without
further action by either party, for successive one year periods (each a "Renewal
Term") unless at least six months prior to the end of any Term either party
shall have served written notice on the other of its election to allow this
Agreement to terminate at the end of such Term. The Initial Term and any Renewal
Terms are hereinafter sometimes collectively referred to as the "Term."
If either party notifies the other party that it shall not extend the
period of employment pursuant to the provisions of the preceding paragraph,
Company may, at its option, decide that the Executive shall take a
leave-of-absence for part or all of the remaining time of his employment,
continuing to receive all compensation as if actively working.
Notwithstanding anything to the contrary in this Section 2, Executive may,
at his option, terminate the period of his employment under this Agreement by
providing a one-time notice to the Company on or before June 30, 2000 that his
Initial Term of employment shall end as of December 31, 2000. If such notice is
duly provided by Executive, then his period of employment under this Agreement
shall terminate as of such time and all obligations of the parties hereunder,
except for those set forth in Sections 6, 7 and 8 hereof, shall no longer be in
effect.
<PAGE>
3. Termination. The period of employment shall be terminated upon the first
to occur of the following:
(i) The expiration of the period of employment pursuant to
Section 2 of this agreement.
(ii) The Executive's death.
(iii) The Executive becoming permanently disabled. Permanent
disability shall mean physical or mental incapacity of a
nature which prevents Executive from performing his duties
under this Agreement for a period of more than six months in
any twelve month period.
(iv) The Executive's employment being terminated by Company for
cause. Termination for cause shall mean termination by
action of the Board of Directors of Company because of any
of the following: (a) the willful failure of Executive to
perform his duties and obligations under this Agreement; (b)
the failure to abide by, or to execute in a reasonable and
responsible manner, the policies and procedures of the
Company as in effect from time to time; (c) gross negligence
in the performance of his duties under this Agreement; (d)
the commission by Executive of a felony; (e) engaging in any
activity that is competitive with the business of the
Company; or (f) engaging in fraudulent, unethical or
dishonest activities.
4. Compensation and Benefits.
(a) The Executive shall receive regular compensation (the "Base
Salary") at the initial rate of One Hundred Fifty Thousand Dollars ($150,000.00)
per annum during the Initial Term. The Base Salary shall be payable in arrears
less the usual payroll deductions at the same times and in the same manner as
salaries paid to other employees of the Company. The Executive shall participate
in any wage increases applicable generally to salaried employees of Company. The
Base Salary prevailing at any time shall be reviewed annually for a possible
increase beginning in January 2000.
(b) In addition to the Base Salary, the Executive shall be entitled to
receive annual incentive compensation payments ("Incentive Compensation") for
1999 based on a formula set forth on Exhibit A hereto. For years thereafter, the
Executive shall be entitled to receive Incentive Compensation at such times and
in such amounts as may be determined pursuant to the Bonus Plan for Executives
of subsidiaries of Bacou USA, Inc., as in effect for the applicable year (the
"Company Plan"; a copy of the Company Plan for 1999 is attached to this
Agreement as Exhibit B). Executive acknowledges that, by agreeing to participate
in the Company Plan for the years 2000 and beyond, he thereby waives any rights
to participate in any other incentive compensation plan of the Company.
(c) Incentive Compensation shall be paid by Company for each fiscal
year within ten (10) days after a decision is made by the Board of Directors of
Company as to the amount of such Incentive Compensation, but in any event no
later than the earlier of the annual meeting of the Board of Directors of the
Company or February 28 following the fiscal year for which the Incentive
Compensation is paid.
(d) The Executive shall be entitled to participate in any stock option
plan which Bacou USA, Inc. may adopt for Company at levels to be determined by
the Board of Directors of Company in its sole discretion. It is anticipated that
contingent upon the closing of the Perfect Fit Glove transaction, you will be
granted options to purchase 10,000 shares of the Company's Common Stock pursuant
to the Company's 1996 Stock Incentive Plan at the closing price of the stock on
that day.
(e) The Executive shall be entitled to participate in all savings,
thrift, retirement or pension, short term and long term disability, health and
accident, Blue Cross/Blue Shield, Major Medical or other hospitalization,
holiday, vacation, and other fringe benefit programs generally available to
senior executives of Company in accordance with and subject to the terms and
conditions of such programs.
(f) In addition, the Executive shall be entitled to receive the
following benefits:
(i) The Executive shall have the use of a company car, subject to
the Automobile Policy of Bacou USA, Inc., a copy of which is attached to this
Agreement as Exhibit C. To the extent that you have a leased or owned vehicle in
place at the beginning of the Initial Term, we shall pay you the standard amount
payable pursuant to the Company's Automobile Policy until such time as the lease
expires on such vehicle or you are ready or purchase another vehicle.
(ii) The Executive shall be entitled to vacation pursuant to the
Bacou USA, Inc. Executive Vacation Policy. Vacation days will be taken at a time
convenient for both the Executive and Company. To the extent the Executive does
not take all vacation days the remaining days will be carried forward for an
unlimited period or be paid to the Executive at the level of his Base Salary
valid for the fiscal year in which vacation days are not taken.
(iii) When traveling on Company business, the Executive will be
provided coach-class airfare on domestic trips; business class airfare will be
provided on international trips.
(iv) The Executive is authorized to incur reasonable expenses in
connection with and for the promotion of the business of Company, including
expenses for meals and lodging (regular hotel room, no suites), entertainment,
and similar items as required from time to time by the Executive's duties.
Company shall reimburse the Executive for all such expenses upon the
presentation of an account therefor, together with appropriate supporting
documentation.
5. Limitations on Authority. Except as otherwise provided herein, approval
by the Chairman must be obtained prior to the Executive taking any of the
following actions on behalf of the Company:
(a) Acquisition or disposition of real property or any rights
deriving therefrom, or changing title in any such real property.
(b) Making unplanned capital expenditures or any commitment therefor
in an amount greater than $10,000 for any individual expenditure
and $50,000 in the aggregate in any fiscal year;
(c) Borrowing or guaranteeing any borrowings from or on behalf of any
party, or altering the terms of any loan agreements for such
borrowings except for any such loans or borrowings as shall be
agreed upon by the Board of Directors of Company;
(d) Hiring, terminating, promoting or demoting executive personnel
with annual salary in excess of $50,000 or granting unbudgeted
raises, bonuses or other compensatory payments to any employee of
the Company;
(e) Promoting or hiring anyone to a position above the Manager level
(i.e. to Director or above);
(f) Granting retirement benefits or other non-earned income to any
person;
(g) Modification of any qualified plan or other benefit plan, e.g.,
health insurance;
(h) Acquiring the assets or shares of any business;
(i) Acquiring or disposing of the assets or shares of the Company or
selling any fixed asset of the Company below book value or
writing off inventory of the Company with an aggregate book value
exceeding $50,000 in any fiscal year;
(j) Entering into or terminating agreements of any kind or nature
with a monthly financial obligation in excess of U.S. $5,000 for
more than six (6) months except purchase orders for materials
required for the manufacture of products for sale in the ordinary
course of business;
(k) Making basic changes in the administration, organization,
production, and distribution of Company or any of its affiliates,
as well as closing or curtailing the functions of Company or any
of its affiliates;
(l) Filing any lawsuit;
(m) Making cash or non-cash corporate contributions above the
annually budgeted amount;
(n) When there is a large volume of sales, the making of decisions
requiring both extraordinary risks and extraordinary
expenditures;
(o) Entering into any transaction on behalf of Company or its
affiliates which is not in the usual course of its business;
(p) Adoption or modification of the annual budget.
Notwithstanding the foregoing, approval is not required for any action
provided for in the approved and applicable annual budget or annual plan of
Company. In addition, should the Chairman be unavailable, if an emergency arises
which requires the Executive to take immediate action in which approval as set
forth in this Section would otherwise be required, the Executive is no longer
bound by the limitations described above and is authorized to make a decision in
the best interests of Company. The Executive will immediately inform the
Chairman of any such decisions made by him.
6. Non-Disclosure of Information. It is understood that the business of
Company and its affiliates is of a confidential nature. During the period of the
Executive's employment with Company, the Executive may have received and/or may
secure confidential information concerning Company or any of Company's
affiliates or subsidiaries which, if known to competitors thereof, would damage
Company or its said affiliates or subsidiaries. The Executive agrees that during
and after the term of this Agreement he will not (except as authorized by
Company or in the proper performance of his duties or except as ordered by a
court or other body of competent jurisdiction or as otherwise required by law),
directly or indirectly, divulge, disclose or appropriate to his own use, or to
the use of any third party, any secret, proprietary or confidential information
or knowledge obtained by him during the term hereof concerning such confidential
matters of Company or its subsidiaries or affiliates, including, but not limited
to, information pertaining to trade secrets, systems, manuals, confidential
reports, methods, processes, designs, equipment lists, operating procedures,
equipment and methods used and preferred by Company's customers. Upon
termination of this Agreement, the Executive shall promptly deliver to Company
all materials of a secret or confidential nature relating to the business of
Company or any of its subsidiaries or affiliates which are, directly or
indirectly, in the possession or under the control of the Executive. The
provisions of this paragraph shall continue to apply after the Executive ceases
to be employed by Company for a period of seven (7) years except in respect of
any information or knowledge disclosed to the public, other than through an
unauthorized disclosure by the Executive.
7. Trade Secrets. The Executive covenants that he shall, while employed by
Company, assign, transfer, and set over to Company or its designee all right,
title and interest in and to all trade secrets, secret processes, inventions,
improvements, patents, patent applications, trademarks, trademark applications,
copyrights, copyright registrations, discoveries and/or other developments
(hereinafter "Inventions") which he may, thereafter, alone or in conjunction
with others, during or outside normal working hours, conceive, make, acquire or
suggest at any time which relate to the products, processes, work, research, or
other activities of Company or any of its subsidiaries or affiliates. Any and
all Inventions which are of a proprietary nature and which the Executive may
conceive, may acquire or suggest, either alone or in conjunction with others,
during his employment with Company (whether during or outside normal working
hours) relating to or in any way pertaining to or connected with Company's
business, shall be the sole and exclusive property of Company or its designee
and the Executive, whenever requested to do so by Company, shall, without
further compensation or consideration properly execute any and all applications,
assignments or other documents which Company or its designee shall deem
necessary in order to apply for and obtain Letters Patent of the United States
and/or comparable rights afforded by foreign countries for the Inventions, or in
order to assign and convey to Company or its designee the sole and exclusive
right, title and interest in and to the Inventions. This obligation shall
continue beyond the termination of this Agreement with respect to Inventions
conceived or made by the Executive during the term of his employment by Company,
and shall be binding upon his assigns, executors, administrators, and other
legal representatives.
8. Non-Competition. (a) During the term of this Agreement or any renewal
thereof and, at Company's option for a period of up to five years thereafter,
should the Executive's contract be terminated or not be renewed, the Executive
agrees that he will not within the geographical area of the United States,
engage, either directly or indirectly, individually or as an owner, partner,
joint venturer, employee, officer, director, stockholder, consultant,
independent contractor or lender of or to any corporation, holding Company or
other business entity which is in a business similar to that of Company or any
of its affiliates. In the event that Company chooses to exercise its option to
prevent Executive from competing with Company following termination or
non-renewal of his employment, Company shall notify Executive in writing either
(i) at the time of Executive's last day of employment or (ii) at the time
Company provides notice to Executive of its decision that Executive shall take a
leave-of-absence, or, if Executive provides written notice to Company of his
decision to terminate his employment with Company, Company shall notify
Executive in writing within two (2) weeks thereafter, in any case specifying the
period of up to five years following termination, resignation, or non-renewal of
employment during which such competitive activity shall be prohibited. In the
event Company exercises its option, Company shall pay Executive an amount equal
to his annual Base Salary at the time of termination, resignation or
non-renewal. Notwithstanding the foregoing, Executive (as hereinbefore described
in Section 2(d)) may own five (5%) percent of the securities of any business in
competition with the business of Company or any of its affiliates, which
securities are regularly traded on a public exchange, provided that any such
ownership shall not result in Executive becoming a record or beneficial owner at
any time of more than five (5%) percent of equity securities of said business
entity.
(b) The Executive shall not during the term of his Employment
under this Agreement or any renewal thereof, and for a period of five (5) years
thereafter, employ, retain or arrange to have any other person or entity employ
or retain any person who was employed by Company or any of its affiliated
companies having an annual compensation of at least U.S. $50,000 per annum
during the term of this Agreement or any renewal thereof.
(c) If any provision of this Section is held to be unenforceable
because of the scope, duration or area of its applicability or otherwise, the
legal entity making that determination will have the power to modify the scope,
duration or area, or all of them, and the provision will then apply in its
modified form.
9. Property. All letters, memoranda, documents, business notes (including
all copies thereof) and other information contained on any other computer media
including computer disks and hard drives of the Executive in any manner relating
to the duties of Executive under this agreement are the property of Company.
10. Notices. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) three (3) business days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) business day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
business day at the place of receipt, it shall be effective as of the following
business day. All notices and other communications hereunder shall be given as
follows:
(a) If to the Company, to it at:
c/o Bacou USA, Inc.
10 Thurber Boulevard
Smithfield, RI 02917
Attention: President
Telephone No.: 401-233-0333
Telecopier No.: 401-232-2230
(b) If to the Executive, to him at:
36 Pine Tree Lane
West Seneca, NY 14224
Telephone No.: ( )
Telecopier No.: ( )
Either party may change its address for receiving notice by written notice given
to the other names above in the manner provided above.
11. Full and Complete Agreement; Amendment. This Agreement (together with
the Exhibits attached hereto) constitutes the full and complete understanding
and agreement of the parties and supersedes all prior understandings and
agreements. This Agreement may be modified only by a written instrument executed
by both parties (except Exhibits B and C which are subject to modification from
time to time by Bacou USA, Inc.)
12. Construction. This Agreement shall be construed under the laws of the
State of Rhode Island.
13. Arbitration. Notwithstanding the fact that the parties shall be
entitled to equitable relief in order to enforce certain provisions hereunder
(e.g., temporary restraining orders or injunctive relief), any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the "Commercial
Arbitration Rules" of the American Arbitration Association in effect on the date
of this Agreement, except as varied below. The site of any such arbitration
shall be Providence, Rhode Island and any award shall be deemed to be a
Providence, Rhode Island award. There shall be a single arbitrator who shall be
admitted to practice law in Rhode Island, with no less than ten (10) years
experience in the handling of commercial or corporate matters or disputes. The
arbitrator shall render a written decision stating his reasons therefor, and
shall render an award within six (6) months of the request for arbitration, and
such award shall be final and binding upon both parties. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent jurisdiction
in any state of the United States or country or application may be made to such
court for a judicial acceptance of the award and an enforcement, as the law of
such jurisdiction may require or allow. The substantive law to be applied to any
case determined pursuant to this Section 13 is that of Rhode Island. The expense
of arbitration shall be borne by the respective parties except to the extent
that the arbitrators shall determine that the entire expense shall be borne by a
single party.
14. Binding Nature. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, Company and the Executive have duly executed this
Agreement as of the day and year first written above.
PERFECT FIT GLOVE CO., INC. EXECUTIVE
By: /s/ Walter Stepan /s/ Joseph P. Hoerner
---------------------- ---------------------
Name: Walter Stepan Joseph P. Hoerner
Title: Chairman
By: /s/ Philip B. Barr
----------------------
Name: Philip B. Barr
Title: Vice Chairman
<PAGE>
EXHIBIT A
|-----------------------------------------------|------------------------------|
| Cash Flow Achievement | Bonus Amount |
|-----------------------------------------------|------------------------------|
|Below 90% of Target | $0 |
|-----------------------------------------------|------------------------------|
|At least 90% of Target, but less than 100% | 10% of 1999 Salary |
|-----------------------------------------------|------------------------------|
|At least 100% of Target, but less than 110% | 15% of 1999 Salary |
|-----------------------------------------------|------------------------------|
|At least 110% of Target, or above | 20% of 1999 Salary |
|-----------------------------------------------|------------------------------|
The Target amount shall be as set forth in Exhibit 5.05 to the Asset
Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group
and affiliates of Bacou USA, Inc.
Agreed: Walter Stepan
------
Philip B. Barr
------
Frank A. Stucke
------
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 1st day of April, 1999, by and between
Joseph P. Hoerner ("Executive"), currently residing at 5555 Armor Duells Road,
Orchard Park, New York 14127, and Perfect Fit Glove Co., Inc., f/k/a Bacou USA
Acquisition Corp., a corporation organized under the laws of Delaware (the
"Company"), with its principal offices at 10 Thurber Boulevard, Smithfield, RI
02917.
W I T N E S S E T H :
WHEREAS, Company wishes to secure the services of Executive as the
President of the Company and as President of SCHAS Industries, Inc., an
affiliate of the Company, for the period provided in this Agreement; and
WHEREAS, Executive is willing to enter into this Agreement for such period
and on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
Company and Executive hereby agree as follows:
1. Employment. During the period of employment set forth in Section 2 of
this Agreement, Company shall employ Executive, and Executive shall serve as the
President of the Company and as President of SCHAS Industries, Inc., reporting
to the Chairman, President and CEO of Bacou USA Safety, Inc. Executive agrees to
faithfully perform the duties assigned to him to the best of his ability and,
except for vacations and periods of temporary illness, to devote his full time
and attention to the business of Company. Ancillary employment such as writing,
teaching or lecturing, as well as the acceptance of honorific titles may be
undertaken by the Executive only with the approval of the Chief Executive
Officer of Bacou USA, Inc. ("Bacou") or his designee ("Chairman"). Executive
also agrees that he will not engage in any other business activities without the
prior approval of the Chairman. Executive may only serve as an officer,
director, trustee or committee member, or in any similar position, of a
reasonable number (maximum two) of trade associations and religious, charitable,
educational, civic or other non-business organizations, subject to the approval
of the Chairman. The Executive represents and warrants to Company that he is now
under no contract or agreement nor will he execute any contract or agreement
that will in any manner interfere, conflict with or prevent him from performing
his duties under the terms and conditions of this Agreement, recognizing that
his performance hereunder will require the devotion of his full time and
attention during and beyond regular business hours during the Term (as
hereinafter defined), including extensive travel.
2. Period of Employment. The Executive's employment under this Agreement
shall initially cover the period beginning April 1, 1999 to December 31, 2004
(the "Initial Term"). On January 1, 2004, and at the end of each year
thereafter, the period of employment shall be automatically extended, without
further action by either party, for successive one year periods (each a "Renewal
Term") unless at least six months prior to the end of any Term either party
shall have served written notice on the other of its election to allow this
Agreement to terminate at the end of such Term. The Initial Term and any Renewal
Terms are hereinafter sometimes collectively referred to as the "Term."
If either party notifies the other party that it shall not extend the
period of employment pursuant to the provisions of the preceding paragraph,
Company may, at its option, decide that the Executive shall take a
leave-of-absence for part or all of the remaining time of his employment,
continuing to receive all compensation as if actively working.
Notwithstanding anything to the contrary in this Section 2, Executive may,
at his option, terminate the period of his employment under this Agreement by
providing a one-time notice to the Company on or before June 30, 2000 that his
Initial Term of employment shall end as of December 31, 2000. If such notice is
duly provided by Executive, then his period of employment under this Agreement
shall terminate as of such time and all obligations of the parties hereunder,
except for those set forth in Sections 6, 7 and 8 hereof, shall no longer be in
effect.
3. Termination. The period of employment shall be terminated upon the first
to occur of the following:
(i) The expiration of the period of employment pursuant to
Section 2 of this agreement.
(ii) The Executive's death.
(iii) The Executive becoming permanently disabled. Permanent
disability shall mean physical or mental incapacity of a
nature which prevents Executive from performing his duties
under this Agreement for a period of more than six months in
any twelve month period.
(iv) The Executive's employment being terminated by Company for
cause. Termination for cause shall mean termination by
action of the Board of Directors of Company because of any
of the following: (a) the willful failure of Executive to
perform his duties and obligations under this Agreement; (b)
the failure to abide by, or to execute in a reasonable and
responsible manner, the policies and procedures of the
Company as in effect from time to time; (c) gross negligence
in the performance of his duties under this Agreement; (d)
the commission by Executive of a felony; (e) engaging in any
activity that is competitive with the business of the
Company; or (f) engaging in fraudulent, unethical or
dishonest activities.
4. Compensation and Benefits.
(a) The Executive shall receive regular compensation (the "Base
Salary") at the initial rate of One Hundred Fifty Thousand Dollars ($150,000.00)
per annum during the Initial Term. The Base Salary shall be payable in arrears
less the usual payroll deductions at the same times and in the same manner as
salaries paid to other employees of the Company. The Executive shall participate
in any wage increases applicable generally to salaried employees of Company. The
Base Salary prevailing at any time shall be reviewed annually for a possible
increase beginning in January 2000.
(b) In addition to the Base Salary, the Executive shall be entitled to
receive annual incentive compensation payments ("Incentive Compensation") for
1999 based on a formula set forth on Exhibit A hereto. For years thereafter, the
Executive shall be entitled to receive Incentive Compensation at such times and
in such amounts as may be determined pursuant to the Bonus Plan for Executives
of subsidiaries of Bacou USA, Inc., as in effect for the applicable year (the
"Company Plan"; a copy of the Company Plan for 1999 is attached to this
Agreement as Exhibit B). Executive acknowledges that, by agreeing to participate
in the Company Plan for the years 2000 and beyond, he thereby waives any rights
to participate in any other incentive compensation plan of the Company.
(c) Incentive Compensation shall be paid by Company for each fiscal
year within ten (10) days after a decision is made by the Board of Directors of
Company as to the amount of such Incentive Compensation, but in any event no
later than the earlier of the annual meeting of the Board of Directors of the
Company or February 28 following the fiscal year for which the Incentive
Compensation is paid.
(d) The Executive shall be entitled to participate in any stock option
plan which Bacou USA, Inc. may adopt for Company at levels to be determined by
the Board of Directors of Company in its sole discretion. It is anticipated that
contingent upon the closing of the Perfect Fit Glove transaction, you will be
granted options to purchase 10,000 shares of the Company's Common Stock pursuant
to the Company's 1996 Stock Incentive Plan at the closing price of the stock on
that day.
(e) The Executive shall be entitled to participate in all savings,
thrift, retirement or pension, short term and long term disability, health and
accident, Blue Cross/Blue Shield, Major Medical or other hospitalization,
holiday, vacation, and other fringe benefit programs generally available to
senior executives of Company in accordance with and subject to the terms and
conditions of such programs.
(f) In addition, the Executive shall be entitled to receive the
following benefits:
(i) The Executive shall have the use of a company car, subject to
the Automobile Policy of Bacou USA, Inc., a copy of which is attached to this
Agreement as Exhibit C. To the extent that you have a leased or owned vehicle in
place at the beginning of the Initial Term, we shall pay you the standard amount
payable pursuant to the Company's Automobile Policy until such time as the lease
expires on such vehicle or you are ready or purchase another vehicle.
(ii) The Executive shall be entitled to vacation pursuant to the
Bacou USA, Inc. Executive Vacation Policy. Vacation days will be taken at a time
convenient for both the Executive and Company. To the extent the Executive does
not take all vacation days the remaining days will be carried forward for an
unlimited period or be paid to the Executive at the level of his Base Salary
valid for the fiscal year in which vacation days are not taken.
(iii) When traveling on Company business, the Executive will be
provided coach-class airfare on domestic trips; business class airfare will be
provided on international trips.
(iv) The Executive is authorized to incur reasonable expenses in
connection with and for the promotion of the business of Company, including
expenses for meals and lodging (regular hotel room, no suites), entertainment,
and similar items as required from time to time by the Executive's duties.
Company shall reimburse the Executive for all such expenses upon the
presentation of an account therefor, together with appropriate supporting
documentation.
5. Limitations on Authority. Except as otherwise provided herein, approval
by the Chairman must be obtained prior to the Executive taking any of the
following actions on behalf of the Company:
(a) Acquisition or disposition of real property or any rights
deriving therefrom, or changing title in any such real property.
(b) Making unplanned capital expenditures or any commitment therefor
in an amount greater than $10,000 for any individual expenditure
and $50,000 in the aggregate in any fiscal year;
(c) Borrowing or guaranteeing any borrowings from or on behalf of any
party, or altering the terms of any loan agreements for such
borrowings except for any such loans or borrowings as shall be
agreed upon by the Board of Directors of Company;
(d) Hiring, terminating, promoting or demoting executive personnel
with annual salary in excess of $50,000 or granting unbudgeted
raises, bonuses or other compensatory payments to any employee of
the Company;
(e) Promoting or hiring anyone to a position above the Manager level
(i.e. to Director or above);
(f) Granting retirement benefits or other non-earned income to any
person;
(g) Modification of any qualified plan or other benefit plan, e.g.,
health insurance;
(h) Acquiring the assets or shares of any business;
(i) Acquiring or disposing of the assets or shares of the Company or
selling any fixed asset of the Company below book value or
writing off inventory of the Company with an aggregate book value
exceeding $50,000 in any fiscal year;
(j) Entering into or terminating agreements of any kind or nature
with a monthly financial obligation in excess of U.S. $5,000 for
more than six (6) months except purchase orders for materials
required for the manufacture of products for sale in the ordinary
course of business;
(k) Making basic changes in the administration, organization,
production, and distribution of Company or any of its affiliates,
as well as closing or curtailing the functions of Company or any
of its affiliates;
(l) Filing any lawsuit;
(m) Making cash or non-cash corporate contributions above the
annually budgeted amount;
(n) When there is a large volume of sales, the making of decisions
requiring both extraordinary risks and extraordinary
expenditures;
(o) Entering into any transaction on behalf of Company or its
affiliates which is not in the usual course of its business;
(p) Adoption or modification of the annual budget.
Notwithstanding the foregoing, approval is not required for any action
provided for in the approved and applicable annual budget or annual plan of
Company. In addition, should the Chairman be unavailable, if an emergency arises
which requires the Executive to take immediate action in which approval as set
forth in this Section would otherwise be required, the Executive is no longer
bound by the limitations described above and is authorized to make a decision in
the best interests of Company. The Executive will immediately inform the
Chairman of any such decisions made by him.
6. Non-Disclosure of Information. It is understood that the business of
Company and its affiliates is of a confidential nature. During the period of the
Executive's employment with Company, the Executive may have received and/or may
secure confidential information concerning Company or any of Company's
affiliates or subsidiaries which, if known to competitors thereof, would damage
Company or its said affiliates or subsidiaries. The Executive agrees that during
and after the term of this Agreement he will not (except as authorized by
Company or in the proper performance of his duties or except as ordered by a
court or other body of competent jurisdiction or as otherwise required by law),
directly or indirectly, divulge, disclose or appropriate to his own use, or to
the use of any third party, any secret, proprietary or confidential information
or knowledge obtained by him during the term hereof concerning such confidential
matters of Company or its subsidiaries or affiliates, including, but not limited
to, information pertaining to trade secrets, systems, manuals, confidential
reports, methods, processes, designs, equipment lists, operating procedures,
equipment and methods used and preferred by Company's customers. Upon
termination of this Agreement, the Executive shall promptly deliver to Company
all materials of a secret or confidential nature relating to the business of
Company or any of its subsidiaries or affiliates which are, directly or
indirectly, in the possession or under the control of the Executive. The
provisions of this paragraph shall continue to apply after the Executive ceases
to be employed by Company for a period of seven (7) years except in respect of
any information or knowledge disclosed to the public, other than through an
unauthorized disclosure by the Executive.
7. Trade Secrets. The Executive covenants that he shall, while employed by
Company, assign, transfer, and set over to Company or its designee all right,
title and interest in and to all trade secrets, secret processes, inventions,
improvements, patents, patent applications, trademarks, trademark applications,
copyrights, copyright registrations, discoveries and/or other developments
(hereinafter "Inventions") which he may, thereafter, alone or in conjunction
with others, during or outside normal working hours, conceive, make, acquire or
suggest at any time which relate to the products, processes, work, research, or
other activities of Company or any of its subsidiaries or affiliates. Any and
all Inventions which are of a proprietary nature and which the Executive may
conceive, may acquire or suggest, either alone or in conjunction with others,
during his employment with Company (whether during or outside normal working
hours) relating to or in any way pertaining to or connected with Company's
business, shall be the sole and exclusive property of Company or its designee
and the Executive, whenever requested to do so by Company, shall, without
further compensation or consideration properly execute any and all applications,
assignments or other documents which Company or its designee shall deem
necessary in order to apply for and obtain Letters Patent of the United States
and/or comparable rights afforded by foreign countries for the Inventions, or in
order to assign and convey to Company or its designee the sole and exclusive
right, title and interest in and to the Inventions. This obligation shall
continue beyond the termination of this Agreement with respect to Inventions
conceived or made by the Executive during the term of his employment by Company,
and shall be binding upon his assigns, executors, administrators, and other
legal representatives.
8. Non-Competition. (a) During the term of this Agreement or any renewal
thereof and, at Company's option for a period of up to five years thereafter,
should the Executive's contract be terminated or not be renewed, Executive
agrees that he will not within the geographical area of the United States,
engage, either directly or indirectly, individually or as an owner, partner,
joint venturer, employee, officer, director, stockholder, consultant,
independent contractor or lender of or to any corporation, holding Company or
other business entity which is in a business similar to that of Company or any
of its affiliates. In the event that Company chooses to exercise its option to
prevent Executive from competing with Company following termination or
non-renewal of his employment, Company shall notify Executive in writing either
(i) at the time of Executive's last day of employment or (ii) at the time
Company provides notice to Executive of its decision that Executive shall take a
leave-of-absence, or, if Executive provides written notice to Company of his
decision to terminate his employment with Company, Company shall notify
Executive in writing within two (2) weeks thereafter, in any case specifying the
period of up to five years following termination, resignation, or non-renewal of
employment during which such competitive activity shall be prohibited. In the
event Company exercises its option, Company shall pay Executive an amount equal
to his annual Base Salary at the time of termination, resignation or
non-renewal. Notwithstanding the foregoing, the Executive (as hereinbefore
described in Section 2(d)) may own five (5%) percent of the securities of any
business in competition with the business of Company or any of its affiliates,
which securities are regularly traded on a public exchange, provided that any
such ownership shall not result in the Executive becoming a record or beneficial
owner at any time of more than five (5%) percent of equity securities of said
business entity.
(b) The Executive shall not during the term of his Employment under
this Agreement or any renewal thereof, and for a period of five (5) years
thereafter, employ, retain or arrange to have any other person or entity employ
or retain any person who was employed by Company or any of its affiliated
companies having an annual compensation of at least U.S. $50,000 per annum
during the term of this Agreement or any renewal thereof.
(c) If any provision of this Section is held to be unenforceable
because of the scope, duration or area of its applicability or otherwise, the
legal entity making that determination will have the power to modify the scope,
duration or area, or all of them, and the provision will then apply in its
modified form.
9. Property. All letters, memoranda, documents, business notes (including
all copies thereof) and other information contained on any other computer media
including computer disks and hard drives of the Executive in any manner relating
to the duties of Executive under this agreement are the property of Company.
10. Notices. Any notices or other communications required to be given
pursuant to this Agreement shall be in writing and shall be deemed given: (i)
upon delivery, if by hand; (ii) three (3) business days after mailing, if sent
by registered or certified mail, postage prepaid, return receipt requested;
(iii) one (1) business day after mailing, if sent via overnight courier; or (iv)
upon transmission, if sent by telex or facsimile except that if such notice or
other communication is received by telex or facsimile after 5:00 p.m. on a
business day at the place of receipt, it shall be effective as of the following
business day. All notices and other communications hereunder shall be given as
follows:
(a) If to the Company, to it at:
c/o Bacou USA, Inc.
10 Thurber Boulevard
Smithfield, RI 02917
Attention: President
Telephone No.: 401-233-0333
Telecopier No.: 401-232-2230
(b) If to the Executive, to him at:
5555 Armor Duells Road
Orchard Park, NY 14127
Telephone No.: ( )
Telecopier No.: ( )
Either party may change its address for receiving notice by written notice given
to the other names above in the manner provided above.
11. Full and Complete Agreement; Amendment. This Agreement (together with
the Exhibits attached hereto) constitutes the full and complete understanding
and agreement of the parties and supersedes all prior understandings and
agreements. This Agreement may be modified only by a written instrument executed
by both parties (except Exhibits B and C which are subject to modification from
time to time by Bacou USA, Inc.)
12. Construction. This Agreement shall be construed under the laws of the
State of Rhode Island.
13. Arbitration. Notwithstanding the fact that the parties shall be
entitled to equitable relief in order to enforce certain provisions hereunder
(e.g., temporary restraining orders or injunctive relief), any dispute,
controversy or claim arising out of or relating to this Agreement, or the breach
hereof, shall be settled by arbitration in accordance with the "Commercial
Arbitration Rules" of the American Arbitration Association in effect on the date
of this Agreement, except as varied below. The site of any such arbitration
shall be Providence, Rhode Island and any award shall be deemed to be a
Providence, Rhode Island award. There shall be a single arbitrator who shall be
admitted to practice law in Rhode Island, with no less than ten (10) years
experience in the handling of commercial or corporate matters or disputes. The
arbitrator shall render a written decision stating his reasons therefor, and
shall render an award within six (6) months of the request for arbitration, and
such award shall be final and binding upon both parties. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent jurisdiction
in any state of the United States or country or application may be made to such
court for a judicial acceptance of the award and an enforcement, as the law of
such jurisdiction may require or allow. The substantive law to be applied to any
case determined pursuant to this Section 13 is that of Rhode Island. The expense
of arbitration shall be borne by the respective parties except to the extent
that the arbitrators shall determine that the entire expense shall be borne by a
single party.
14. Binding Nature. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective heirs, personal representatives,
successors and assigns.
IN WITNESS WHEREOF, Company and the Executive have duly executed this
Agreement as of the day and year first written above.
PERFECT FIT GLOVE CO., INC. EXECUTIVE
By: /s/ Walter Stepan /s/ Joseph P. Hoerner
----------------------- --------------------------
Name: Walter Stepan Joseph P. Hoerner
Title: Chairman
By: /s/ Philip B. Barr
------------------------
Name: Philip B. Barr
Title: Vice Chairman
<PAGE>
EXHIBIT A
1999 INCENTIVE COMPENSATION
The Target amount shall be as set forth in Exhibit 5.05 to the Asset
Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group
and affiliates of Bacou USA, Inc.
|-----------------------------------------------|------------------------------|
| Cash Flow Achievement | Bonus Amount |
|-----------------------------------------------|------------------------------|
|Below 90% of Target | $0 |
|-----------------------------------------------|------------------------------|
|At least 90% of Target, but less than 100% | 10% of 1999 Salary |
|-----------------------------------------------|------------------------------|
|At least 100% of Target, but less than 110% | 15% of 1999 Salary |
|-----------------------------------------------|------------------------------|
|At least 110% of Target, or above | 20% of 1999 Salary |
|-----------------------------------------------|------------------------------|
The Target amount shall be as set forth in Exhibit 5.05 to the Asset
Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group
and affiliates of Bacou USA, Inc.
Agreed: Walter Stepan
------
Philip B. Barr
------
Frank A. Stucke
------
Exhibit 99
Contact:
At the Company: At The Financial Relations Board:
401-233-0333 212-661-8030
Philip B. Barr Analyst Information John McNamara
Chief Financial Officer Media Information: Alan Goldsand
Investor Relations General Information: Jeff Bogart
FOR IMMEDIATE RELEASE
BACOU USA COMPLETES ACQUISITION OF PERFECT FIT GLOVE CO., INC.
OF BUFFALO, NEW YORK
o Purchase includes SCHAS Circular Industries, Inc. of Wilkesboro, N.C.
o Management of Bacou USA expects deal to be accretive to earnings in 1999
Smithfield, R.I., April 5, 1999 -- Bacou USA, Inc. (NYSE: BAU), a leading
manufacturer of personal protective equipment, today announced that it has
completed the acquisition of Perfect Fit Glove Co., Inc. of Buffalo, New York,
and SCHAS Circular Industries, Inc. of Wilkesboro, North Carolina in an all cash
transaction. Perfect Fit and SCHAS manufacture and sell non-disposable
industrial gloves, specializing in cut and abrasion-resistant and heat-resistant
work gloves.
"Perfect Fit and SCHAS will form the base for our entry into the hand
protection business," said Walter Stepan, Vice-Chairman, President and CEO of
Bacou USA. "Both Perfect Fit and SCHAS have experienced management teams and
highly dedicated workforces with substantial experience in the industrial glove
business, and we are pleased that management and the entire workforce will be
joining the Bacou USA family. We plan to continue their existing operations in
their current locations. Our main goal is to continue the growth of these
companies by providing the necessary capital and by taking advantage of
synergies in our common distribution channels."
According to a Frost & Sullivan market survey report for 1998, the most
recent available, Perfect Fit ranked third in market share for sales of cut and
abrasion-resistant work gloves within the U.S. industrial market for
non-disposable gloves. The total U.S. industrial market for all types of
non-disposable gloves was estimated by Frost & Sullivan to be approximately $1.1
billion. A 1998 survey of the Safety Equipment Distributors Association
estimates that, on average, glove sales represent approximately 25% of the total
annual sales volume of industrial safety distributors nationwide.
The purchase price of approximately $53.8 million for both companies was
financed entirely by debt. "Based on the operating history of Perfect Fit and
SCHAS, their internal forecasts for 1999 and the current interest rate
environment, we expect these acquisitions to be accretive in 1999 excluding the
effect of any transaction related non-recurring items," said Stepan.
For its year ended December 31, 1998, Bacou USA reported net sales of
$219.6 million and, prior to non-recurring items, net profits of $25.8 million
and earnings per share of $1.46 on a weighted average 17.6 million shares. After
non-recurring items, Bacou USA reported net profits of $19.5 million and
earnings per share of $1.19.
Bacou USA, Inc. designs, manufactures and sells leading brands of products
that protect the sight, hearing, respiratory systems and hands of workers, as
well as related instrumentation including visions screeners, gas monitors and
test equipment for self-contained breathing apparatus. The company's products,
marketed under Uvex(R), Howard Leight(R), Perfect Fit(R), Survivair(R),
Pro-Tech(R), Biosystems, Titmus(R), LaserVision and Lase-R Shield(TM) brand
names, are sold principally to industrial safety distributors, fire fighting
equipment distributors and optical laboratories. News and information about
Bacou USA are available on the Worldwide Web at http://www.bacouusa.com.
To receive additional information on Bacou USA, Inc., via fax,
at no charge, dial 1-800-PRO-INFO and enter code BAU.
###
Statements contained in this press release that are not historical facts are
forward-looking statements that are made pursuant to the safe harbor provisions
of the Private Securities and Litigation Reform Act of 1995. In addition, words
such as "believes," "anticipates," "expects" and similar expressions are
intended to identify forward-looking statements. Forward-looking statements
involve risks and uncertainties, including but not limited to the timely
development and acceptance of new products, the impact of competitive products
and pricing, changing market conditions, the successful integration of
acquisitions, continued availability and favorable pricing of raw materials, the
ability of the company and its key vendors to successfully respond to Year 2000
issues and the other risks detailed in the company's prospectus filed March 27,
1996, and from time to time in other filings. Actual results may differ
materially from those projected. These forward-looking statements represent the
company's judgment as of the date of this release. The company disclaims,
however, any intent or obligation to update these forward-looking statements.
