<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO________
COMMISSION FILE NUMBER 1-14360
BEC GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 13-3868804
---------- ----------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
Suite B-302
555 Theodore Fremd Avenue
Rye, New York 10580
- -------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
Registrant's telephone number, including area code: (914) 967-9400
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
--- ---
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE REGISTRANT'S CLASSES
OF COMMON STOCK AS OF THE LATEST PRACTICABLE DATE.
Common Shares, par value $.01 -- 17,502,902 Shares as of May 3, 1996
Page 1 of 28.
Exhibit Index Appears at page 14.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
BEC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
March 31, 1996 March 31, 1996 December 31, 1995
-------------- -------------- -----------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 11,182 $ 5,089 $ 4,903
Trade receivables, net 37,840 37,840 29,438
Inventories 48,129 48,129 52,337
Other current assets 7,770 7,770 7,313
--------------- --------------- ---------------
Total current assets 104,921 98,828 93,991
Property and equipment, net 16,754 16,754 16,746
Goodwill, net 17,280 17,280 17,341
Intangible assets, net 10,590 10,590 10,985
Equity in and notes receivable
from affiliated companies 10,580 10,580 10,564
Investment in discontinued operations 0 0 127,316
Other assets 16,680 16,680 19,015
--------------- --------------- ---------------
Total assets $ 176,805 $ 170,712 $ 295,958
=============== =============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 26,000 $ 24,500 $ 62,500
Short-term debt and current
portion of long term debt 233 233 238
Accounts payable 22,189 22,189 23,068
Accrued compensation 2,508 2,508 3,080
Other accrued expenses 25,304 19,211 11,728
--------------- --------------- ---------------
Total current liabilities 76,234 68,641 100,614
Term loan 20,000 20,000 0
Long-term debt 18,533 18,533 18,606
Convertible subordinated notes 40,950 20,755 40,950
Other 9,251 9,251 4,731
--------------- --------------- ---------------
Total liabilities 164,968 137,180 164,901
Contingent valuation right 4,570 4,570 0
Stockholders' equity:
Preferred stock - par value $1;
500 shares authorized; none outstanding
Common stock - par value $.01; 50,000 shares
authorized; 16,189; 17,502 and 32,101
shares issued 162 175 321
Additional paid-in capital 7,174 28,856 131,553
Cumulative translation adjustment (69) (69) (77)
Treasury stock - 0, 0 and 195 shares, at cost 0 0 (1,365)
Retained earnings 0 0 625
--------------- --------------- ---------------
Total stockholders' equity 7,267 28,962 131,057
--------------- --------------- ---------------
Total liabilities and stockholders' equity $ 176,805 $ 170,712 $ 295,958
=============== =============== ===============
</TABLE>
See accompanying notes to condensed financial statement.
2
<PAGE> 3
BEC GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1996 1995
---------- ----------
<S> <C> <C>
REVENUES:
Net sales $ 45,664 $ 45,502
COSTS AND EXPENSES:
Cost of sales 25,547 23,086
Selling, general and administrative 16,195 17,510
Interest expense 1,656 1,569
Other income (464) (949)
---------- ----------
Total costs and expenses 42,934 41,216
---------- ----------
Income from continuing operations before income taxes 2,730 4,286
Provision for income taxes 983 1,543
---------- ----------
Income from continuing operations 1,747 2,743
Income from discontinued operations 101,727 2,277
---------- ----------
Net income 103,474 5,020
Retained earnings at beginning of year 625 7,385
Dividends (230,071) 0
Other movements 229,446 0
---------- ----------
Retained earnings at the end of the period $ 0 $ 12,405
========== ==========
Pro forma weighted average shares outstanding 17,600 17,600
EARNINGS PER SHARE:
Income loss from continuing operations $ 0.10 $ 0.16
Income from discontinued operations 5.78 0.13
---------- ----------
Net income $ 5.88 $ 0.29
========== ==========
SUPPLEMENTARY INFORMATION:
Depreciation and amortization from continuing operations $ 2,447 $ 2,579
Capital expenditures from continuing operations 3,376 3,736
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 4
BEC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31
-----------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net cash used by continuing operations $ (510) $ (12,985)
Net cash provided (used) by discontinued operations (715) 168
---------- ----------
Net cash used by operating activities (1,225) (12,817)
---------- ----------
Cash flows from investing activities:
Capital expenditures (3,376) (3,736)
Cash paid for acquisitions 0 (2,117)
Cash received from affiliates 0 70
Proceeds from sale of fixed assets 0 8
Net cash provided (used) by discontinued operations 254,570 (493)
---------- ----------
Net cash provided (used) by investing activities 251,194 (6,268)
---------- ----------
Cash flows from financing activities:
Proceeds from revolving credit line 5,022 16,841
Proceeds (payments) from long term obligations (59) 1,341
Payments from short term obligations 0 (4,353)
Proceeds from issuance of common stock 1,413 91
Cash dividends to stockholders (230,071) 0
Net cash used by discontinued operations (20,003) (346)
---------- ----------
Net cash provided (used) by financing activities (243,698) 13,574
---------- ----------
Effect on cash of changes in foreign exchange rates 8 0
Net increase (decrease) in cash 6,279 (5,511)
---------- ----------
Cash and cash equivalents at beginning of year 4,903 17,350
---------- ----------
Cash and cash equivalents at end of period $ 11,182 $ 11,839
========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 5
BEC GROUP, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Stock-
------------ Paid-In Retained Treasury holders'
Shares Par Value Capital Earnings Adjustment Stock Equity
--------- --------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 32,101 $ 321 $ 131,553 $ 625 $ (77) $ (1,365) $ 131,057
Shares issued for acquisitions 1 6 6
Exercise of Benson stock options 216 2 1,288 1,290
Translation adjustment 8 8
Issuances of common stock under the
Employee Stock Purchase Plan 16 123 123
Net income 103,474 103,474
Cancellation of Treasury Stock (195) (2) (1,363) 1,365 0
Dividend to Benson shareholders (125,972) (104,099) (230,071)
Reverse split to reflect spin off (16,070) (161) 161 0
Payment for cancellation of
Benson stock options 120 2 1,378 1,380
--------- --------- --------- --------- --------- --------- ---------
Balance at March 31, 1996 16,189 $ 162 $ 7,174 $ 0 $ (69) $ 0 $ 7,267
========= ========= ========= ========= ========= ========= =========
</TABLE>
See accompanying notes to condensed financial statements.
5
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BEC GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles,
Regulation S-X and the instructions for Form 10-Q and Regulation S-X. These
statements contain all adjustments, consisting of only normal recurring
adjustments, which in the opinion of management are necessary to fairly present
the consolidated financial position of the Company as of March 31, 1996 and its
results of operations and cash flows for the three months ended March 31, 1996.
The results of operations of the interim periods presented are not necessarily
indicative of the results to be expected for the full fiscal year. The
condensed consolidated balance sheet at December 31, 1995 reflects the
investment in discontinued operations. These condensed financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Company's Registration Statement on Form S-1.
NOTE 2 - DISCONTINUED OPERATIONS
On May 3, 1996, Benson Eyecare Corporation ("Benson"), BEC Group (the "Company"
or "BEC"), Essilor International, S.A. ("Essilor"), Essilor of America, Inc.
("Essilor of America"), a wholly owned subsidiary of Essilor and Essilor
Acquisition Corporation, Inc. ("Essilor Sub"), a wholly owned subsidiary of
Essilor of America, entered into an Agreement and Plan of Merger, as amended
(the "Merger") pursuant to which Essilor purchased Benson and the Omega Group,
Benson's wholesale optical laboratory business. Benson also entered into an
Asset Purchase Agreement, pursuant to which Benson's lens manufacturing
business, Orcolite, was purchased by the Monsanto Company (the "Asset Sale").
Pursuant to the Merger, each outstanding share of Benson common stock was
exchanged for $6.60 in cash and one share of BEC's common stock was received
for every two shares of Benson common stock. Upon consummation of the Merger,
the equity interest in Benson of its stockholders ceased and Benson became a
wholly owned subsidiary of Essilor of America. Also upon consummation of the
Merger, BEC became a Registrant whose common shares are traded on the New York
Stock Exchange.
For accounting purposes, BEC is considered the continuing entity. Accordingly,
the Merger and Asset sale were considered to be a sale of Omega and Orcolite by
BEC to Essilor and Monsanto, respectively. The accounting treatment of the
Merger and Asset Sale differs from the legal and federal income tax treatment.
The gain on the sale of these businesses and the results of operations for
these businesses are presented as discontinued operations of BEC. The cash
merger consideration is treated as a dividend of BEC Group, Inc. The assets of
the discontinued operations, net of liabilities, are presented as investment in
discontinued operations at December 31, 1995.
6
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Summarized information on the discontinued operations is as follows:
<TABLE>
<CAPTION>
For the three months ended March 31,
1996 1995
---- ----
<S> <C> <C>
Net Sales $ 37,042 $ 31,829
========= =========
Income before income taxes $ 2,839 $ 2,463
Income tax expense 1,022 186
Gain on sale of discontinued operations 99,910 0
--------- ---------
Net income $ 101,727 $ 2,277
========= =========
</TABLE>
Gain on sale of discontinued operations was determined as follows:
<TABLE>
<S> <C>
Sales price 256,961
Less net assets sold (130,181)
Less transaction expenses (26,870)
-------
Gain $99,910
=======
</TABLE>
NOTE 3 - PRO FORMA BALANCE SHEET
As of March 31, 1996, Benson had outstanding $40.95 million of Convertible
Subordinate Notes due 2001, (the "Convertible Notes"). As of May 3, 1996, 99%
of the note holders (holding $40,391 million) accepted the terms of the
Agreement for Conversion and Exchange of Notes (the "Conversion and Exchange
Agreement") whereby each Convertible Note holder agreed to convert half of the
principal amount at a conversion price of $7.90 into Benson common stock and
directly into Merger Consideration and to exchange the other half for new notes
in BEC. The new Convertible Notes are due May 3, 2002 (the "New Convertible
Notes"), bear interest at 8% and are convertible into BEC common stock at a
conversion price of $5.75 per share. Interest on the New Convertible Notes is
not payable until maturity or conversion and at BEC Group's option may be paid
in kind instead of cash. Accordingly, in the pro forma balance sheet, 99% of
the Convertible Notes are shown reflecting the Conversion and Exchange
Agreement. Additionally, the pro forma balance sheet reflects the use of cash
to pay down the credit facility between March 31 and May 3 and to pay
transaction expenses immediately following the transaction on May 3, 1996.
The 17.5 million number of shares outstanding shown on the pro forma balance
sheet includes the 1.3 million shares issued in connection with the Conversion
and Exchange Agreement. The pro forma weighted average shares outstanding
shown in the statements of operations includes 100,000 common stock equivalents
representing Benson options converted to BEC options in connection with the
Merger.
7
<PAGE> 8
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Merger and Asset Sale
On May 3, 1996, Benson, BEC, Essilor, Essilor of America and Essilor Sub
effected a Merger pursuant to which Essilor purchased Benson and the Omega
Group, Benson's wholesale optical laboratory business. Benson also entered
into an Asset Purchase Agreement, pursuant to which Benson's lens manufacturing
business, Orcolite, was purchased by the Monsanto Company on May 3, 1996 (the
"Asset Sale"). Pursuant to the Merger, each outstanding share of Benson common
stock was exchanged for $6.60 in cash and one share of BEC's common stock was
received for every two shares of Benson common stock. For accounting purposes,
BEC is considered the continuing entity. Accordingly, the Merger and Asset
sale were considered to be a sale of Omega and Orcolite by BEC to Essilor and
Monsanto, respectively. The accounting treatment of the Merger and Asset Sale
differs from the legal structure and the federal income tax treatment. The
gain on the sale of these businesses and the results of operations for these
businesses are presented as discontinued operations of BEC. The cash merger
consideration is treated as a dividend of BEC Group, Inc. The assets of the
discontinued operations, net of liabilities, are presented as investment in
discontinued operations at December 31, 1995.
The discussion of the results of operations will consist mainly of a discussion
of the continuing operations of BEC Group, Inc.
Results of Operations
QUARTER ENDED MARCH 31, 1996 COMPARED TO QUARTER ENDED MARCH 31, 1995
Net sales for the three months ended March 31, 1996 were $45.7 million compared
to $45.5 million for the same period in 1995. The Company's Optical
Technologies Group sales increased from $8.3 million in the first quarter of
1995 to $10.7 million for the same period in 1996. Additionally, within the
Company's Sunglass Group, Bolle sales increased 18% compared to the first
quarter of 1995. These increases were offset by a decrease in sales at the
Foster Grant Group. Sales from Superior Eye Care, Inc. ("Superior"), which was
sold on June 28, 1995, were also included in first quarter 1995 sales.
The gross profit margin decreased from 49.3% in the first quarter of 1995 to
44% in 1996. The decrease was partly due to Superior fee income being included
in 1995. Furthermore, the Sunglass Group is contributing lower gross margins
in 1996 as a result of the Foster Grant Group reorganization in 1995. Gross
margins in the Optical Technologies Group were consistent with prior years.
8
<PAGE> 9
Selling, general and administrative expense decreased from $15.5 million or 38%
of net sales in the first quarter of 1995 to $16.2 million or 35% of net sales
in the first quarter of 1996. This decrease was effected by head office cost
savings achieved at Bolle and BEC. Bolle's savings result from the elimination
of the costs of being a stand-alone public company. BEC costs have decreased
accordingly with the smaller size of BEC as compared to Benson.
Interest expense for the first quarter of 1996 was $1.7 million compared to
$1.6 million in 1995 primarily due to higher outstanding debt.
Other income in 1996 consists primarily of equity income from the Company's
investment in Eyecare Products, plc and interest income on notes receivable.
In 1995, other income was higher due to nonrecurring income earned from the
sale of assets.
The effective income tax rate used for both 1995 and 1996 was 36% based on the
expected effective income tax rate for BEC.
Liquidity and Capital Resources
During the three months ended March 31, 1996, net current assets increased to
$28.7 million. The increase in net current assets is primarily due to the
seasonal increase in trade accounts receivable and the fact that the new Credit
Facility described in Part II, Item 5 of this Form 10-Q was not yet in place.
Working capital and continuing operations required the use of approximately
$510,000 in the first quarter of 1996, reflecting a $2.7 million decrease in
accounts payable and accrued expenses, and an $8.5 million increase in accounts
receivable, offset primarily by a $4.1 million decrease in inventory. The
significant increase in accounts receivable is primarily due to the Sunglass
Group where seasonality causes receivables to increase through June. Capital
expenditures for BEC's continuing operations required the use of $3.4 million of
cash. These uses of cash were funded primarily through increases in the
revolving credit facility. The Company expects cash flow from operations
combined with available borrowing capacity under the revolving credit facility
to be sufficient to fund the Company's operating needs in the short term. On a
long term basis, if cash for expansion or acquisitions is required, the Company
has had a successful track record of being able to access the public equity and
debt markets for capital and liquidity.
Seasonality and Quarterly Results
The Company's Sunglass Group is seasonal in nature with the first and second
quarters having increased sales due to the high demand for sunglasses during
that period. Therefore, operating results will be subject to fluctuation from
quarter to quarter.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On May 3, 1996, the Company effected its spinoff from Benson Eyecare
Corporation ("Benson") and commenced trading on the New York Stock Exchange.
The Company is a leading optics company through its Sunglass Group and Optical
Technologies Group.
The spinoff accompanied the merger of Benson into Essilor International, S.A.
In the spinoff, shareholders of Benson received $6.60 in cash for each share of
Benson held plus one share of the common stock of the Company for every two
shares of Benson held.
The Sunglass Group includes the Foster Grant Group, the largest distributor of
popular-priced sunglasses and non-prescription reading glasses in the United
States, and Bolle America, Inc., which co-designs, markets and distributes
premium sunglasses, sport shields and ski goggles under the Bolle(R) trademark
in the U.S., Mexico and Costa Rica. The Foster Grant Group's owned brands
include Foster Grant(R), Blues(R), FG Sport(R), and Rebels(R); its licensed
brands include ABC Sports(R), Coppertone(R), Revlon(R) and Spalding(R).
The Optical Technologies Group is composed of ORC Lighting Products, which
designs and manufactures xenon and mercury-xenon short-arc lamps and
mini-systems that incorporate lamps, optics and electronic componentry; ORC
Electronic Products, which manufactures the Opti-Beam(R) and Pro-Form(R) lines
of photo exposure systems, and ORC Electroformed Products, which manufactures
metal optics and abrasion protection products.
In addition, the Company owns approximately 28% of Eyecare Products Plc, a
London Stock Exchange listed company that owns L'Amy, the largest optical frame
manufacturer in France. L'Amy has the worldwide licenses to the Lacoste(R),
Nina Ricci(R), Ted Lapidus(R) and Chevignon(R) brands and sells its own
Lunettes L'Amy(R) and Visions(R) brands.
On April 3, 1996, the Company and certain of its subsidiaries entered into a
Credit Agreement (the "Credit Agreement") with a syndicate of lenders (the
"Lenders"), led by NationsBank, N.A., ("NationsBank"). The Credit Agreement
provides for a $50 million credit facility, which is comprised of two separate
facilities: a term loan facility which provides a term loan in the principal
amount of $20 million and a revolving credit facility in the maximum aggregate
principal amount of $30 million, which includes a letter of credit subfacility
of $5 million. The interest rate applicable to the credit facilities will equal
the Base Rate or the Eurodollar Rate (each, as defined in the Credit Agreement),
as the Company may from time to time elect. The Base Rate will generally be
equal to the sum of (a) the greater of (i) the prime rate as announced from time
to time by NationsBank or (ii) the Federal Funds Rate plus one-half percent
(0.5%), and (b) a margin ranging from 0% to .375%, depending upon the Company's
satisfaction of certain financial criteria. The Eurodollar Rate will generally
be equal to the interbank offered rate for Eurodollar deposits, as adjusted to
give effect to Eurodollar reserve requirements, plus a margin ranging from .625%
to 1.625%, depending upon the Company's
10
<PAGE> 11
satisfaction of certain financial criteria. The principal amount of the term
loan is repayable in fifteen (15) equal consecutive quarterly installments of
$1,250,000, commencing June 30, 1997; a sixteenth (16th) and final installment
in the amount of all outstanding and unpaid principal is payable on May 3,
2001.
On May 3, 1996, in conjunction with the closing of the Merger and the Asset
Sale described in Part I, Items 1 and 2 to this Quarterly Report on Form 10-Q,
a total of $44.5 million was advanced to the Company under the Credit
Agreement.
On May 3, 1996, the Company appointed the following Directors: Nora A. Bailey;
Richard W. Hanselman; David L. Moore; William T. Sullivan; and Charles F.
Sydnor, M.D. Martin E. Franklin, Chairman, and Ian G.H. Ashken, were appointed
Directors effective December 28, 1995 and also continue as Directors.
11
<PAGE> 12
ITEM 6. EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
The following exhibits are filed herewith or are incorporated by
reference:
10.1 Agreement and Plan of Merger, dated as of February 11, 1996,
between Essilor International, S.A., Essilor of America, Inc.,
Essilor Acquisition Corporation, Benson Eyecare Corporation,
BEC Group, Inc. and Omega Opco, Inc.
10.2 Form of Spinoff Agreement between Benson Eyecare Corporation
and BEC Group, Inc.
10.3 Indemnification Agreement, dated as of February 11, 1996, by
and among Essilor International, S.A., Essilor of America,
Inc., Essilor Acquisition Corporation, Benson Eyecare
Corporation and BEC Group, Inc.
10.4 Form of Indemnification Agreement entered into by and between
the Company and its directors and certain officers.
27 Financial Data Schedule (for electronic filing only).
(B) REPORTS ON FORM 8-K:
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1996.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEC GROUP, INC.
Date: May 16, 1996 By: /s/ Martin E. Franklin
-----------------------------------
Martin E. Franklin
Chairman and Chief Executive Officer
Date: May 16, 1996 By: /s/ Ian Ashken
-----------------------------------
Ian Ashken
Chief Financial Officer
13
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EXHIBIT INDEX
The following Exhibits are filed herewith or incorporated by reference:
<TABLE>
<CAPTION>
Number Exhibit Page No.:
- ------ ------- --------
<S> <C> <C>
10.1 Agreement and Plan of Merger, dated as of Incorporated by
February 11, 1996, between Essilor reference to Exhibit
International, S.A., Essilor of America, 10.1 to the Company's
Inc., Essilor Acquisition Corporation, Benson Registration Statement
Eyecare Corporation, BEC Group, Inc. and on Form S-1, (Reg.
Omega Opco, Inc. No. 333-3186)
10.2 Form of Spinoff Agreement between Benson Incorporated by
Eyecare Corporation and BEC Group, Inc. reference to Exhibit
10.2 to the Company's
Registration Statement
on Form S-1, (Reg.
No. 333-3186)
10.3 Indemnification Agreement, dated as of February Incorporated by
11, 1996, by and among Essilor International, reference to Exhibit
S.A., Essilor of America, Inc., Essilor 10.3 to the Company's
Acquisition Corporation, Benson Eyecare Registration Statement
Corporation and BEC Group, Inc. on Form S-1 (Reg.
No. 333-3186)
10.4 Form of Indemnification Agreement entered into 15
by and between the Company and its directors
and certain officers.
27 Financial Data Schedule (for electronic filing only). 26
</TABLE>
14
<PAGE> 1
EXHIBIT 10.4
INDEMNIFICATION AGREEMENT
AGREEMENT made as of this _____ day of ____________, 1996, between BEC
Group, Inc., a Delaware Corporation (the "Company"), and ____________________
(the "Indemnitee").
WHEREAS, it is essential to the Company and its stockholders to
attract and retain qualified and capable non-employee directors;
WHEREAS, the Certificate of Incorporation of the Company (the
"Certificate of Incorporation") and the By-laws of the Company (the "By-laws")
allow the Company to indemnify and advance expenses to its directors;
WHEREAS, historically, basic protection against undue risk of personal
liability of directors has been provided through insurance coverage affording
reasonable protection at reasonable cost;
WHEREAS, it is presently uncertain whether, and to what extent, such
insurance is or will continue to be available to the Company at a reasonable
cost for the protection of Indemnitee;
WHEREAS, in recognition of Indemnitee's need for protection against
personal liability in order to induce Indemnitee to continue to serve the
Company in an effective manner, and to supplement or replace the Company's
directors' and officers' liability insurance coverage, and, in part, to provide
Indemnitee with specific contractual assurance that the protection provided by
the Certificate of Incorporation and the By-laws will be available to
Indemnitee (regardless of, among other things, any amendment to or revocation
of the Certificate of Incorporation and the By-laws), the Company wishes to
provide the Indemnitee with the benefits contemplated by this Agreement; and
WHEREAS, as a result of the provision of such benefits Indemnitee has
agreed to continue to serve the Company as a director;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions: The following terms used herein, shall have the
following respective meanings:
(a) AFFILIATE: of a specified Person is a Person who, directly or
indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, the Person specified. The term ASSOCIATE used
to indicate a relationship with any Person shall mean (i) any corporation or
organization (other than the Company or a Subsidiary) of which such Person is
an officer or partner or is, directly or indirectly, the Beneficial Owner of
ten (10) percent or more of any
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class of Equity Securities; (ii) any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person serves as a
trustee or in a similar fiduciary capacity (other than an Employee Plan
Trustee); (iii) any Relative of such Person; or (iv) any officer or director of
any corporation controlling or controlled by such Person.
(b) BENEFICIAL OWNERSHIP: shall be determined, and a Person shall
be the BENEFICIAL OWNER of all securities which such Person is deemed to own
beneficially, pursuant to Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (or any successor rule or
statutory provision), or, if such Rule 13d-3 shall be rescinded and there shall
be no successor rule or statutory provision thereto, pursuant to such Rule 13d-
3 as in effect on the date hereof; provided, however, that a Person shall, in
any event, also be deemed to be the Beneficial Owner of any Voting Shares: (A)
of which such Person or any of its Affiliates or Associates is, directly or
indirectly, the Beneficial Owner; or (B) of which such Person or any of its
Affiliates or Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, and (ii) sole or
shared voting or investment power with respect thereto pursuant to any
agreement, arrangement, understanding, relationship or otherwise (but shall not
be deemed to be the Beneficial Owner of any Voting Shares solely by reason of a
revocable proxy granted for a particular meeting of stockholders, pursuant to a
public solicitation of proxies for such meeting, with respect to shares of
which neither such Person nor any such Affiliate or Associate is otherwise
deemed the Beneficial Owner), or (C) of which another Person is, directly or
indirectly, the Beneficial Owner if such first mentioned Person or any of its
Affiliates or Associates acts with such other Person as a partnership,
syndicate or other group pursuant to any agreement, voting or disposing of any
shares of capital stock of the Company; and provided further, however, that (i)
no director or officer of the Company, nor any Associate or Affiliate of any
such director or officer, shall, solely by reason of any or all of such
directors and officers acting in their capacities as such, be deemed for any
purpose hereof, to be the Beneficial Owner of any Voting Shares of which any
other such director or officer (or any Associate or Affiliate thereof) is the
Beneficial Owner (ii) no trustee of an employee stock ownership or similar plan
of the Company or any Subsidiary ("Employee Plan Trustee") or any Associate or
Affiliate of any such Trustee, shall solely by reason of being an Employee Plan
Trustee or Associate or Affiliate of an Employee Plan Trustee, be deemed for
any purposes hereof to be the Beneficial Owner of any Voting Shares held by or
under any such plan and (iii) it is hereby understood that for all purposes of
the Agreement, that the Voting Shares owned by Martin E. Franklin ("Franklin"),
Chairman of the Board of the Company, shall not be deemed Beneficially Owned by
Warren B. Kanders ("Kanders"), Vice Chairman of the Board of the Company, and
that the Voting Shares owned by Kanders shall not be deemed Beneficially Owned
by Franklin, and that any and all transactions by and between Franklin, Kanders
and/or Ian Ashken ("Ashken"), Chief Financial Officer of the Company, relating
to the Voting Shares owned by any of such individuals, shall not be deemed to
trigger any of Indemnitee's rights hereunder.
16
<PAGE> 3
(c) A CHANGE IN CONTROL: shall be deemed to have occurred if (A)
(i) any Person (other than (a) the Company or any subsidiary, (b) any pension,
profit sharing, employee stock ownership or other employee benefit plan of the
Company or any subsidiary or any trustee of or fiduciary with respect to any
such plan when acting in such capacity, or (c) any Person who is as of the date
hereof the Beneficial owner of 20% or more of the total voting power of the
Voting Shares) is or becomes, after the date of this Agreement, the Beneficial
Owners of 30% or more of the total voting power of the Voting Shares, and (ii)
Franklin, Kanders, and Ashken are the Beneficial Owners in the aggregate of
less than 25% of the Voting Shares, (B) during any period of two consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new directors whose election or appointment by
the Board of Directors or nomination or recommendation for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (C) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation which would
result in the Voting Shares of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into Voting Shares of the surviving entity) at least 50% of the total
voting power represented by the Voting Shares of the Company or such surviving
entity outstanding, or the stockholders 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 of the Company's assets.
(d) CLAIM: means any pending or completed action, suit,
arbitration or proceeding, or any inquiry or investigation, whether brought by
or in the right of the Company or otherwise, whether civil, criminal,
administrative, investigative or other, or any appeal therefrom.
(e) EQUITY SECURITY: shall have the meaning given to such term
under Rule 3all-1 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on the date hereof.
(f) D&O INSURANCE: means any valid directors' and officers'
liability insurance policy maintained by the Company for the benefit of the
Indemnitee, if any.
(g) DETERMINATION: means a determination, and DETERMINED means a
matter which has been determined based on the facts known at the time, by: (i)
a majority vote of a quorum of disinterested directors, or (ii) if such a
quorum is not obtainable, or even if obtainable, if a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or, in
the event there has been a change in Control, by Indemnitee as set forth in
Section 6, or (iii) a majority of the disinterested stockholders of the
Company, or (iv) a final adjudication by a court of competent jurisdiction.
17
<PAGE> 4
(h) EXCLUDED CLAIM: means any payment for Losses or Expenses in
connection with any Claim: (i) based or attributable to Indemnitee gaining in
fact any personal profit or advantage to which Indemnitee is not entitled; or
(ii) for the return by Indemnitee of any remuneration paid to Indemnitee
without the previous approval of the stockholders of the Company which is
illegal; or (iii) for any accounting of profits in fact made from the purchase
or sale by Indemnitee of Securities of the company within the meaning of
Section 16 of the Security Exchange Act of 1934, as amended, or similar
provisions of any state law; or (iv) resulting from Indemnitee's knowingly
fraudulent, dishonest or willful misconduct; or (v) the payment of which by the
Company under this Agreement is not permitted by applicable law.
(i) EXPENSES: means any reasonable expenses incurred by
Indemnitee as a result of a Claim or Claims made against Indemnitee for
Indemnifiable Events including, without limitation, reasonable attorneys' fees
and all other costs, expenses and obligations paid or incurred in connection
with investigation, defending, being a witness in or participating in
(including an appeal), or preparing to defend, be a witness in or participate
in any Claim relating to any Indemnifiable Event.
(j) FINES: means any fine, penalty or, with respect to an
employee benefit plan, any excise tax or penalty assessed with respect thereto.
(k) INDEMNIFIABLE EVENT: means any event or occurrence, occurring
prior to or after the date of the Agreement, related to the fact that
Indemnitee is, was or has agreed to serve as a director of the Company, or by
reason of anything done or not done by Indemnitee, including, but not limited
to, any breach of duty, neglect, error, misstatement, misleading statement,
omission, or other act done or wrongfully attempted by Indemnitee, or any of
the foregoing alleged by any claimant, in any such capacity.
(l) LOSSES: means any amounts or sums which Indemnitee is legally
obligated to pay as a result of a Claim or Claims made against Indemnitee, for
Indemnifiable Events including, without limitation, damages, judgments, and
sums or amounts paid in settlement of a Claim or Claims, and Fines.
(m) PERSON: means any individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
(n) POTENTIAL CHANGE IN CONTROL: shall be deemed to have
occurred if (A) the Company, or Franklin and Kanders, enter into an agreement,
the consummation of which would result in the occurrence of a Change in
Control; or (B) the Board of Directors adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control has occurred.
18
<PAGE> 5
(o) RELATIVE: means a Person's spouse, parents, children,
siblings, mother- and father-in-law, sons- and daughters-in-law, and brothers-
and sisters-in-law.
(p) REVIEWING PARTY: means any appropriate person or body
consisting of a member or member of the Company's Board of Directors or any
other person or body appointed by the Board (including the Special Independent
Counsel referred to in Section 6) who is not a party to the particular Claim
for which Indemnitee is seeking indemnification.
(q) SUBSIDIARY: means any corporation of which a majority of any
class of Equity Security is owned, directly or indirectly, by the Company.
(r) TRUST: means the trust established pursuant to Section 7
hereof.
(s) VOTING SHARES: means any issued and outstanding shares of
capital stock of the Company entitled to vote generally in the election of
directors.
2. Basic Indemnification Agreement. In consideration of, and as
an inducement to, the Indemnitee rendering valuable services to the Company,
the Company agrees that in the event Indemnitee is or becomes a party to or
witness or other participant in a claim by reason of (or arising in part out
of) an Indemnifiable Event, the Company will indemnify Indemnitee to the
fullest extent authorized by law, against any and all Losses and Expenses
(including all interest, assessments, and other charges paid or payable in
connection with or in respect of such Losses and Expenses) of such Claim,
whether or not such Claim proceeds to judgment or is settled of otherwise is
brought to a final disposition, subject in each case, to the further provisions
of this Agreement.
3. Limitations on Indemnification. Notwithstanding the
provisions of Section 2, Indemnitee shall not be indemnified and held harmless
from an Losses or Expenses (a) which have been Determined as provided herein,
to constitute an Excluded Claim; (b) indemnifiable hereunder if and to the
extent that Indemnitee has actually received payment in connection with such
Losses and Expenses pursuant to the Certificate of Incorporation, By-laws, D&O
Insurance or otherwise; or (c) other than pursuant to the last sentence of
Section 4(d) or Section 14, in connection with any claim or proceeding
initiated by Indemnitee, or brought or made by Indemnitee against the Company
or any director or officer of the Company, unless the Company has joined in or
the Board of Directors has authorized such claim or proceeding.
4. Indemnification Procedures.
(a) Promptly after receipt by Indemnitee of the notice of any
claim, Indemnitee shall, if indemnification with respect thereto may be sought
from the Company under this Agreement, notify the Company of the commencement
thereof; provided, however, that the failure to give such notice promptly shall
not affect or limit the Company's obligations with respect to the matters
described in the notice of such claim, except to the extent that the Company is
prejudiced thereby. Indemnitee agrees, further, not to make any admission or
effect any settlement with respect to such Claim
19
<PAGE> 6
without the consent of the Company, except any Claim with respect to which the
Indemnitee has undertaken the defense in accordance with second to the last
sentence of Section 4 (d).
(b) If, at the time of the receipt of such notice, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of any Claim to the insurers in accordance with the procedures set
forth in the respective policies. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all Losses and Expenses payable as a result of such Claim.
(c) To the extent the Company does not at the time of the Claim
have applicable D&O Insurance, or if a Determination is made that any Expenses
arising out of such Claim will not be payable under the D&O Insurance then in
effect, the Company shall be obligated to pay the Expenses of any Claim in
advance of the final disposition thereof and the company, if appropriate, shall
be entitled to assume the defense of such Claim, with counsel reasonable
satisfactory to Indemnitee, upon the delivery to Indemnitee of reasonable
written notice of its election to do so. After delivery of such notice, the
Company will not be liable to Indemnitee under the Agreement for any legal or
other Expenses subsequently incurred by Indemnitee in connection with such
defense other than reasonable Expenses of investigation; provided that
Indemnitee shall have the right to employ its counsel in such Claim but the
fees and expenses of such counsel incurred after deliver of notice from the
Company of its assumption of such defense shall be at the Indemnitee's expense;
provided further that if: (i) the employment of the counsel by Indemnitee has
been previously authorized by the Company or (ii) the Company shall not, in
fact, have employed counsel to assume the defense of such action, the
reasonable fees and expenses of counsel shall be at the expense of the Company.
(d) All payments on account of the Company's indemnification
obligations under this Agreement shall be made within sixty (60) days of
Indemnitee's written request therefor unless a Determination is made that the
Claims giving rise to Indemnitee's request are Excluded Claims or otherwise not
payable under this Agreement, provided that all payments on account of the
Company's obligation to pay Expenses under Section 4 (c) of this Agreement
prior to the final disposition of any Claim shall be made within thirty (30)
days of Indemnitee's written request therefor and such obligation shall not be
subject to any such Determination but shall be subject to Section 4 (e) of this
Agreement. Notwithstanding the foregoing, such sixty (60) day period may be
extended for a reasonable time, not to exceed an additional thirty (30) days,
if the Person making the Determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining
or evaluating of documentation and/or information relating thereto. In the
event the Company takes the position that Indemnitee is not entitled to
indemnification in connection with the proposed settlement of any Claim,
Indemnitee shall have the right at his own expense to undertake defense of any
such Claim, insofar as such proceeding involves Claims against the Indemnitee,
by written notice given to the Company within ten (10) days after the Company
has notified Indemnitee in writing of its contention that Indemnitee is not
entitled to Indemnification; provided, however, that the failure to give such
notice within such ten-day period shall not affect or limit the Company's
obligations with respect to any such claim if such Claim is subsequently
determine not be an Excluded Claim or otherwise to be payable under this
Agreement, except to the extent that the Company is
20
<PAGE> 7
prejudiced thereby. If it is subsequently determined in connection with such
proceeding that the Indemnifiable Events are not Excluded Claims and that
Indemnitee, therefore, is entitled to be indemnified under the provision of
Section 2 hereof, the Company shall promptly indemnify Indemnitee.
(e) Indemnitee hereby expressly undertakes and agrees to reimburse
the Company for all Losses and Expenses paid by the Company in connection with
any Claim against Indemnitee in the event and only to the extent that a
Determination shall have been made by a court of competent jurisdiction in a
decision from which there is no further right to appeal that Indemnitee is not
entitled to be indemnified by the Company for such Losses and Expenses because
the Claim is an Excluded Claim or because Indemnitee is otherwise not entitled
to payment under the Agreement.
(f) In connection with any Determination as to whether Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.
(g) Indemnitee hereby expressly undertakes and agrees to (i)
notify (and deliver to, as applicable) the Company in writing of any and all
information or documents relating to any Claim or matter which may entitle
Indemnitee to indemnification for Losses or Expenses under this Agreement; and
(ii) to notify the Company in writing of any and all developments relating to
any Claim to which the Company has notified Indemnitee in writing pursuant to
the terms of Section 4 (d) herein of its contention that Indemnitee is not
entitled to indemnification under this Agreement.
5. Settlement. The Company shall have no obligation to indemnify
Indemnitee under this Agreement for any amounts paid in settlement of any Claim
effected without the Company's prior written consent. The Company shall not
settle any Claim in which it takes the position that Indemnitee is not entitled
to indemnification in connection with such settlement without the consent of
Indemnitee, nor shall the Company settle any Claim in any manner which would
impose any Fine or any obligation on Indemnitee, without Indemnitee's written
consent. Neither the Company nor Indemnitee shall unreasonably withhold its or
his consent to any proposed settlement.
6. Change in Control: Extraordinary Transactions. The Company
and Indemnitee agree that if there is a Change in Control of the Company (other
than a Change in Control which has been approved by a majority of the Company's
Board of Directors who were directors immediately prior to such Change in
Control), then all Determinations thereafter with respect to the rights of
Indemnitee to be paid Losses and Expenses under this Agreement shall be made
only by a special independent counsel (the "Special Independent Counsel")
selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld) or by a court of competent jurisdiction. The Company
shall pay the reasonable fees of such Special Independent Counsel and shall
indemnify such Special independent Counsel against any and all reasonable
expenses (including reasonable attorneys' fees), claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.
21
<PAGE> 8
The Company covenants and agrees that, in the event of a Change in
Control of the type described in clause (c) of Section 1 (c), the Company will
use its best efforts (a) to have the obligations of the Company under this
Agreement including, but not limited to, those under section 7, expressly
assumed by the surviving, purchasing or succeeding entity, or (b) otherwise
adequately to provide for the satisfaction of the Company's obligations under
this Agreement, in a manner reasonably acceptable to the Indemnitee.
7. Establishment of Trust. In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
(the "Trust") for the benefit of Indemnitee and from time to time, upon written
request of Indemnitee, shall fund the Trust in an amount sufficient to satisfy
any and all Losses and Expenses which are actually paid or which Indemnitee
reasonably determines from time to time may be payable by the Company under
this Agreement. The amount or amounts to be deposited in the Trust pursuant to
the foregoing funding obligation shall be determined by the Reviewing Party, in
any case in which the Special Independent Counsel is involved. The terms of
the Trust shall provide that upon a Change in Control: (i) the Trust shall not
be revoked or the principal thereof invaded without the written consent of
Indemnitee; (ii) the trustee of the Trust shall advance within twenty (20) days
of a request by Indemnitee, any and all Expenses to Indemnitee (and Indemnitee
hereby agrees to reimburse the Trust under the circumstances under which
Indemnitee would be required to reimburse the Company under Section 4 (e) of
this Agreement; (iii) the Company shall continue to fund the Trust from time to
time in accordance with the funding obligations set forth above; (iv) the
trustee of the Trust shall promptly pay to Indemnitee all Losses and Expenses
for which Indemnitee shall be entitled to indemnification pursuant to this
Agreement; and (v) all unexpended funds in the Trust shall revert to the
Company upon a final determination by a court of competent jurisdiction in a
final decision from which there is not further right of appeal that Indemnitee
has been indemnified under the terms of this Agreement. The trustee of the
Trust shall be chosen by Indemnitee and shall be approved by the Company, which
approval shall not be unreasonably withheld.
8. No Presumption. For purposes of this Agreement, the
termination of any Claim by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not, of itself, create a presumption that Indemnitee did
not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law.
9. Non-exclusivity, Etc. . The rights of Indemnitee hereunder
shall be in addition to any other rights Indemnitee may have under the
Certificate of Incorporation, the By-laws, the Delaware General Corporation
Law, any vote of stockholders or disinterested directors or otherwise, both as
to action in Indemnitee's official capacity and as to action in any other
capacity by holding such office, and shall continue after Indemnitee ceases to
serve the Company as a director for so long as Indemnitee shall be subject to
any Claim by reason of (or arising in part out of) an Indemnifiable Event. To
the extent that a change in the Delaware General Corporation Law (whether by
statute or judicial decision) permits greater indemnification by agreement than
would be afforded currently under the Certificate
22
<PAGE> 9
of Incorporation, the By-laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change.
10. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director of the Company.
11. Subrogation. In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.
12. Partial Indemnity, Etc. If Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of the Losses and Expenses of a Claim but not, however, for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all claims relating
in whole or in part to any Indemnifiable Event or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.
13. Liability of Company. Indemnitee agrees that neither the
stockholders nor the directors nor any officer, employee, representative or
agent of the Company shall be personally liable for the satisfaction of the
company's obligations under this Agreement and Indemnitee shall look solely to
the assets of the Company for satisfaction of any Claims hereunder.
14. Enforcement.
(a) Indemnitee's right to indemnification and other rights under
this Agreement shall be specifically enforceable by Indemnitee only in the
state or Federal courts of the States of Delaware or New York and shall be
enforceable notwithstanding any adverse Determination by the Company's Board of
Directors, independent legal counsel, the Special Independent Counsel or the
Company's stockholders and no such Determination shall create a presumption
that Indemnitee is not entitled to be indemnified hereunder. In any such
action the Company shall have the burden of proving that indemnification is not
required under this Agreement.
(b) In the event that any action is instituted by Indemnitee under
this Agreement, or to enforce or interpret any of the terms of this Agreement,
Indemnitee shall be entitled to be paid all court costs and reasonable
expenses, including reasonable counsel fees, incurred by Indemnitee with
respect to such actions, unless the court determines that each of the material
assertions made by Indemnitee as a basis for such action was not made in good
faith or was frivolous.
23
<PAGE> 10
15. Severability. In the event that any provision of this Agreement
is determined by a court to require the Company to do or to fail to do an act
which is in violation of applicable law, such provision (including any
provision within a single section, paragraph or sentence) shall be limited or
modified in its application to the minimum extent necessary to avoid a
violation of laws, and, as so limited or modified, such provision and the
balance of this Agreement shall be enforceable in accordance with their terms
to the fullest extent permitted by law.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State.
17. Consent to Jurisdiction. The Company and Indemnity each hereby
irrevocably consents to the jurisdiction of the courts of the States of
Delaware and New York for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement and agrees that any
action instituted under this Agreement shall be brought only in the state and
Federal courts of the States of Delaware and New York.
18. Notices. All notices or other communication required or
permitted hereunder shall be sufficiently given for all purposes if in writing
and personally delivered or sent by registered or certified mail, return
receipt requested, with postage prepaid addressed as follows, or to such other
address as the parties shall have given notice of pursuant hereto:
(a) If to the Company, to:
555 Theodore Fremd Avenue
Suite B-302
Rye, New York 10580
(b) If to the Indemnitee, to:
----------------------------
----------------------------
19. Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original and all of which, when taken together, shall
constitute one and the same instrument.
20. Successors and Assigns. This Agreement shall be (i) binding
upon all successors and assigns of the Company, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, and (ii)
binding upon and inure to the benefit of any successors and assigns, heirs, and
personal or legal representatives of Indemnitee.
24
<PAGE> 11
21. Amendment: Waiver. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless made in a writing
signed by each of the parties hereto. No waiver of any of the provision of
this Agreement shall be or shall constitute a waiver of any other provision
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.
IN WITNESS WHEREOF, the Company and Indemnitee have executed this
Agreement as of the day and year first above written.
INDEMNITEE
--------------------------------------
Name:
BEC GROUP, INC.
By:
-----------------------------------
Name:
Title:
ATTEST:
By:
-----------------------------------
Name:
Title:
25
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<PERIOD-START> JAN-01-1996
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0
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