<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 1998
REGISTRATION NO. 333-43793
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FLOUR CITY INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
<TABLE>
<S> <C> <C>
NEVADA 1799 62-1709152
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
</TABLE>
------------------------
MICHAEL J. RUSSO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
FLOUR CITY INTERNATIONAL, INC.
915 RIVERVIEW DRIVE, SUITE ONE
JOHNSON CITY, TENNESSEE 37601
(423) 928-2724
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES AND AGENT FOR SERVICE)
WITH COPIES TO:
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<S> <C>
WILLIAM J. LOPSHIRE, ESQ. GARY J. KOCHER, ESQ.
MANNING MARDER & WOLFE PRESTON GATES & ELLIS LLP
707 WILSHIRE BOULEVARD, 45TH FLOOR 701 FIFTH AVENUE, SUITE 5000
LOS ANGELES, CALIFORNIA 90017 SEATTLE, WASHINGTON 98104-7078
(213) 624-6900 (206) 623-7580
</TABLE>
Approximate Date of Commencement of Proposed Sale to the Public: as soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
The sole purpose of this Amendment No. 3 to Form S-1 Registration
Statement is to file Exhibit No. 10.22 as an Exhibit to the Registration
Statement.
<PAGE> 3
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<C> <S>
*1.1 Underwriting Agreement
*3.1 Amended and Restated Articles of Incorporation of Flour City
International, Inc.
*3.2 Articles of Merger of International Forest Industries, Inc.,
and Flour City International, Inc.
*3.3 By-laws of Flour City International, Inc.
*4.1 Underwriter's Warrant
*4.2 Form of Lock-Up Agreement
*5.1 Opinion of Manning Marder & Wolfe
*10.1 Share Exchange Agreement between Flour City International,
Inc. and John W. Y. Tang, Gold Manor Limited, Dynamic Choice
Enterprises and Wilson International Limited dated January
17, 1997.
*10.2 Stock Purchase Agreement between Flour City International,
Inc., Armco, Inc., and Flour City Architectural Metals,
Inc., dated as of January 1, 1997
*10.3 Agreement and Plan of Merger by and among Flour City
International, Inc. and International Forest Industries,
Inc., dated as of April 4, 1997
*10.4 Flour City International, Inc. 1997 Stock Incentive Plan and
Form of Nonqualified Stock Option Agreement
*10.5 Form of Indemnification Agreement
*10.6 Employment Agreement between Flour City Architectural
Metals, Inc. and Michael J. Russo dated January 17, 1997
*10.7 Employment Agreement by and between Flour City Architectural
Metals (Asia) Limited and John W. Y. Tang dated December 15,
1997
*10.8 Ground and Building Lease Agreement dated December 20, 1993,
Consent and Assumption of Lease dated May 27, 1997
*10.9 Lease Agreement between Douglas Dynamics, LLC and Flour City
Architectural Metals, Inc. dated as of January 1, 1997
*10.10 Asset Transfer Agreement between Flour City Architectural
Metals, Inc., and Douglas Dynamics, LLC dated as of January
1, 1996
*10.11 Manufacturing Agreement between Flour City Architectural
Metals, Inc., and Douglas Dynamics, LLC dated as of January
1, 1997
+*10.12 Agreement between Flour City Architectural Metals, Inc., and
Turner Construction Company dated December 4, 1996
+*10.13 Purchase Order #32895-1243 for U.C. Davis Medical Center in
Sacramento, California
+*10.14 Trade Contract between Swiss Re Investors, Inc., and Flour
City Architectural Metals, Inc., dated May 19, 1997
*10.15 Employment Agreement by and between Flour City Architectural
Metals, Inc. and Roger Ulbricht dated January 16, 1997
10.16 Removed
*10.17 Banking Facility Agreement between the Hongkong and Shanghai
Banking Corporation Ltd., and Kasion Contracting Co., Ltd.
dated July 24, 1997
+*10.18 Curtain Wall Contract between THK Real Estate Limited and
Kasion F.C. Limited dated June 15, 1995
+*10.19 Shareholder Agreement by and between IMSALUM S.A. de C.V.,
and Flour City Architectural Metals dated as of January 8,
1998
*10.20 Consent of Paul D. Lynam
*10.21 Consent of Eugene M. Armstrong
10.22 Employment Agreement by and between Flour City
International, Inc., and Beta Group, Inc., and Thomas P.
Scully dated as of April 27, 1998
*11.1 Flour City International, Inc. Earnings Per Share
*21.1 List of subsidiaries (See "The Company" in Part I of the
Registration Statement)
</TABLE>
II-3
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
<C> <S>
*23.1 Consent of Deloitte & Touche LLP
*23.2 Consent of Deloitte Touche Tohmatsu
*23.3 Consent of Manning Marder & Wolfe (included in Exhibit 5.1)
*24.1 Power of Attorney (see signature page)
*27.1 Financial Data Schedule
</TABLE>
- ---------------
* Previously filed
+ Portions of this exhibit have been omitted and filed separately with the
Secretary subject to a request for confidential treatment pursuant to Rule 406
promulgated under the Securities Act.
(b) FINANCIAL STATEMENT SCHEDULES:
Report of Deloitte & Touche LLP, Independent Auditors
Report of Deloitte Touche Tohmatsu, Independent Auditors
Schedule II Valuation and Qualifying Account
II-4
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment to Registration Statement to be signed
on its behalf by the undersigned, in the City of Johnson City, State of
Tennessee, on the 19th day of May, 1998
FLOUR CITY INTERNATIONAL, INC.
By: /s/ MICHAEL J. RUSSO
------------------------------------
Michael J. Russo
Chief Executive Officer and
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities indicated below on the 19th day of May, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ MICHAEL J. RUSSO Chief Executive Officer, President
- -------------------------------------------------------- and Director
Michael J. Russo (Principal Executive Officer)
* Interim Chief Financial Officer
- -------------------------------------------------------- (Principal Financial and
Thomas P. Scully Principal Accounting Officer)
* Director
- --------------------------------------------------------
John W.Y. Tang
* Director
- --------------------------------------------------------
Johnson K. Fong
* By: /s/ MICHAEL J. RUSSO
- --------------------------------------------------------
Attorney-in-fact
</TABLE>
II-5
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -------- ----------- -------------
<C> <S> <C>
*1.1 Underwriting Agreement......................................
*3.1 Amended and Restated Articles of Incorporation of Flour City
International, Inc. ........................................
*3.2 Articles of Merger of International Forest Industries, Inc.,
and Flour City
International, Inc. ........................................
*3.3 By-laws of Flour City International, Inc. ..................
*4.1 Underwriter's Warrant.......................................
*4.2 Form of Lock-Up Agreement...................................
*5.1 Opinion of Manning Marder & Wolfe...........................
*10.1 Share Exchange Agreement between Flour City International,
Inc. and John W. Y. Tang, Gold Manor Limited, Dynamic Choice
Enterprises and Wilson International Limited dated January
17, 1997....................................................
*10.2 Stock Purchase Agreement between Flour City International,
Inc., Armco, Inc., and Flour City Architectural Metals,
Inc., dated as of January 1, 1997...........................
*10.3 Agreement and Plan of Merger by and among Flour City
International, Inc. and International Forest Industries,
Inc., dated as of April 4, 1997.............................
*10.4 Flour City International, Inc. 1997 Stock Incentive Plan and
Form of Nonqualifed Stock Option Agreement..................
*10.5 Form of Indemnification Agreement...........................
*10.6 Employment Agreement between Flour City Architectural
Metals, Inc. and Michael J. Russo dated January 17, 1997....
*10.7 Employment Agreement by and between Flour City Architectural
Metals (Asia) Limited and John W. Y. Tang dated December 15,
1997........................................................
*10.8 Ground and Building Lease Agreement dated December 20, 1993,
Consent and Assumption of Lease dated May 27, 1997..........
*10.9 Lease Agreement between Douglas Dynamics, LLC and Flour City
Architectural Metals, Inc. dated as of January 1, 1997......
*10.10 Asset Transfer Agreement between Flour City Architectural
Metals, Inc., and Douglas Dynamics, LLC dated as of January
1, 1996.....................................................
*10.11 Manufacturing Agreement between Flour City Architectural
Metals, Inc., and Douglas Dynamics, LLC dated as of January
1, 1997.....................................................
+*10.12 Agreement between Flour City Architectural Metals, Inc., and
Turner Construction Company dated December 4, 1996..........
+*10.13 Purchase Order #32895-1243 for U.C. Davis Medical Center in
Sacramento, California......................................
+*10.14 Trade Contract between Swiss Re Investors, Inc., and Flour
City Architectural Metals, Inc., dated May 19, 1997.........
*10.15 Employment Agreement by and between Flour City Architectural
Metals, Inc. and Roger Ulbricht dated January 16, 1997......
10.16 Removed.....................................................
*10.17 Banking Facility Agreement between the Hongkong and Shanghai
Banking Corporation Ltd., and Kasion Contracting Co., Ltd.
dated July 24, 1997.........................................
+*10.18 Curtain Wall Contract between THK Real Estate Limited and
Kasion F.C. Limited dated June 15, 1995.....................
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- -------- ----------- -------------
<C> <S> <C>
+*10.19 Shareholder Agreement by and between IMSALUM S.A. de C.V.,
and Flour City Architectural Metals dated as of January 8,
1998........................................................
*10.20 Consent of Paul D. Lynam....................................
*10.21 Consent of Eugene M. Armstrong..............................
10.22 Employment Agreement by and between Flour City
International, Inc., and Beta Group, Inc., and Thomas P.
Scully dated as of April 27, 1998...........................
*11.1 Flour City International, Inc. Earnings Per Share...........
*21.1 List of subsidiaries (See "The Company" in Part I of the
Registration Statement).....................................
*23.1 Consent of Deloitte & Touche LLP............................
*23.2 Consent of Deloitte Touche Tohmatsu.........................
*23.3 Consent of Manning Marder & Wolfe (included in Exhibit
5.1)........................................................
*24.1 Power of Attorney (see signature page)......................
*27.1 Financial Data Schedule.....................................
</TABLE>
- ---------------
* Previously filed
+ Portions of this exhibit have been omitted and filed separately with the
Secretary subject to a request for confidential treatment pursuant to Rule
406 promulgated under the Securities Act.
<PAGE> 1
EMPLOYMENT AGREEMENT
This Agreement ("Agreement") is made by and between FLOUR CITY
INTERNATIONAL, INC., a Nevada corporation (the "Employer"), on the one hand, and
the BETA GROUP, INC. ("BGI") as the supplier of the services of THOMAS P. SCULLY
and THOMAS P. SCULLY ("Employee" or "TPS"), on the other hand effective as of
April 27, 1998.
1. Employment of BGI and TPS. BGI and TPS shall supply Employer with the
services of Employee for the duration of this agreement.
(a) Services rendered by Employee shall be in conformity with the
terms and conditions of this contract.
(b) BGI and TPS agrees to provide the services of TPS and TPS agrees
to serve as the Chief Financial Officer of Employer and, as such, TPS shall have
primary responsibility for the duties normally given a Chief Financial Officer,
all subject to the direction and control of the Board of Directors of Employer.
TPS shall report directly to the CEO and Chairman of the Board of Directors.
(c) Subject to the direction and control of the Board of Directors of
Employer, Employer shall delegate to TPS the authority and responsibility to
manage the in-flow and out-flow of all cash, to manage the acquisition and
disposal of assets, countersign checks, and other similar authority and
responsibilities including, assisting Employer in all required matters related
to its public offering, to enable BGI and TPS to carry out its duties.
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<PAGE> 2
(d) Employee shall devote 90% of a single person's full time working
time (not to exceed 200 hours per month following the first 30 days of this
Agreement; with unlimited hours prior thereto), attention and energy to the
business affairs of the Employer.
(e) During the duration of Employee's employment under this
Agreement, Employee shall not directly or indirectly render any services of a
business, commercial or professional nature to any other entity engaged in the
curtain wall industry in any manner which is competitive or conflicting with the
business or interest of Employer without prior written consent.
(f) Employee shall do and perform all services, acts and/or thing
necessary or advisable to the conduct of the business of the Employer, subject
to and accordance with the terms and conditions of this Agreement and all
applicable law.
2. Relationship Between the Parties. BGI and TPS are contracting with
Employer to supply the services of Employee. Employee is an obligor and
beneficiary under the Agreement between BGI on the one hand and Employer on the
other. Any compensation for services performed by Employee pursuant to this
Agreement shall be paid directly to BGI. BGI shall then independently compensate
Employee as the subject of this Agreement and Employer shall be relieved of any
obligation in connection therewith.
(a) Employer shall disclose its records to BGI and TPS in the manner
customarily available to a Chief Financial Officer, and shall, in such manner,
make available to BGI and TPS all information regarding the operation,
management and finances of the Employer, without precluding any right the Board
of Directors of Employer may have to enter executive session or to maintain any
confidentiality required in connection with any such executive session. TPS
shall be informed of
2
<PAGE> 3
and entitled to attend any and all meetings in which Business, Management or
Financial matters will be discussed, without precluding any right the Board of
Directors of Employer may have to enter executive session or to maintain any
confidentiality required in connection with any such session. Subject to their
fiduciary duties to Employer and to legal rules concerning the disclosure of an
Employer's "Information" (as defined in subsection (b) below), BGI and Employee
shall be entitled to use and any all information regarding the Business,
Management and Financial activities of Employer as it deems appropriate to
perform its services hereunder. The Employer understands that in the course of
performing its duties hereunder, BGI and Employee may become aware of certain
information and may deem it appropriate, subject to approval from Employer, to
disclose that information to certain public or private parties who may have an
interest in the administration or operation of Employer, and Employer expressly
consents to any such disclosure made by BGI and Employee and unequivocally
waives any and all claims against BGI and Employee for any such disclosures it
may make where the prior approval of the Employer has been obtained (from its
Board of Directors or the Executive Committee thereof). In the event that BGI
and Employee should consider it a responsibility to make any such disclosure of
information that has not been approved for disclosure by Employer, BGI and
Employee may immediately terminate this Agreement, but shall not disclose any
such information absent legal process.
(b) Employee understands that certain information regarding
Employer's business may be disclosed to Employee during the course of Employee's
association with Employer. Such information may include, but is not limited to
client and potential client names, addresses, telephone numbers and project
information; mailing labels; project report forms; actual or potential bidding
3
<PAGE> 4
data for current or potential projects; information regarding pending projects
or proposals; methods of quotation, production or engineering, including quality
control and project management; business plans and projections; new product,
facility and expansion plans; pricing information, including price lists,
quotation guides, previous or outstanding quotations, equipment prices and
billing information; estimating programs and methodology; techniques used in,
approaches or results of any market research; advertising sources; employee
salaries, contract, project and wage information; financial information
regarding Employer and its business; customer information reports; and marketing
plans and programs; whether written, verbal or contained on computer hardware or
software, diskette, tape microfiche or other media ("Information"). This
Information is of substantial value and highly confidential, is not known to the
general public, is the subject of reasonable efforts to maintain its secrecy,
constitutes the professional and trade secrets of Employer and is being provided
and disclosed to Employee solely for use in connection with Employee's
employment with Employer. In consideration of such employment and receipt of
Information, Employee agrees that Employee: (i) will regard and preserve the
Information as highly confidential and as the trade secrets of Employer; (ii)
will not disclose, nor permit to be disclosed, any of the Information to any
person or entity, absent consent and approval from Employer; (iii) will not make
any use of the Information for Employee's own benefit or for the benefit of any
person or entity other than Employer; and (iv) will return all of the
Information, including but not limited to formulations, customer lists, books
maintained by Employee, source lists, to Employer within twenty-four (24) hours
after request for same.
4
<PAGE> 5
3. Duration of Agreement. Subject to the termination and option
provisions of this section, the duration of this Agreement shall be six months
and shall begin as of April 27, 1998 and shall terminate October 26, 1998.
(a) Option to Renew. Unless the duration of this Agreement is
terminated in accordance with subsection (b) below, the duration of this
Agreement may be renewed for successive thirty (30) day periods under the same
terms and conditions herein provided if the Employer has provided fifteen (15)
days advance written notice of such intention to renew prior to the termination
date and Employee agrees to such renewal.
(b) Termination of Duration.
(i) BGI and Employee acting together may terminate the
duration of employment under this Agreement with Employer at any time following
the first 30 days of this Agreement, WITH CAUSE (as defined in subsection
(b)(iii) below), upon not less than ten (10) days prior written notice to the
Employer. Employer shall have five (5) days to cure the cause of such
termination.
(ii) Employer may terminate the duration of BGI and Employee's
employment under this Agreement at any time following the first 30 days of this
Agreement, WITH CAUSE (as defined in subsection (b)(iii) below), upon not less
than ten (10) days prior written notice to BGI. Employee shall have five (5)
days to cure the cause of such termination.
(iii) For purposes of this Agreement the term "WITH CAUSE"
shall mean a material breach of this Agreement.
(c) Effects of Termination.
If the duration of this Agreement is terminated by Employer except under
5
<PAGE> 6
subsection (b) above prior to June 26, 1998, upon such termination, the Employer
shall pay BGI, as a severance payment for such termination, $40,000. If the
termination occurs after June 25, 1998 but prior to July 26,1998, the severance
payment for such termination shall be $32,500. If the termination occurs after
July 26, 1998 there shall be no severance payment. BGI or Employee may apply the
$40,000.00 retainer, or portion thereof, described in Section 4(b) below against
the Employer's obligations to pay such severance payment to BGI. Employee shall
not be entitled to any other severance payment from the Employer arising from
the termination of the duration of his employment under this Agreement;
provided, however, that if BGI and Employee terminate the duration of employment
with Employer as a result of the failure of the Employer to perform the
obligations set forth in this Agreement (including termination under (b) (i),
above), BGI and Employee reserve and retain all of their rights and remedies at
law, in equity and under this Agreement. There shall be no severance payment in
the event this Agreement is terminated for cause.
(ii) From and after the date of the termination of the
duration of Employee's employment with Employer under this Agreement, Employee
shall be relieved of all obligations to Employer, and the Employer shall
thereafter have no further obligations to Employee with respect to acts,
omissions and occurrences arising after the date of such termination. However,
termination of the duration of Employee's employment with Employer shall in no
event relieve Employer of its obligations to Employer under this Agreement with
respect to acts, omissions and occurrences arising prior to such termination,
regardless of whether any claim with respect to such acts, omissions, or
occurrences arises before or after such termination.
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<PAGE> 7
(iii) BGI shall return any unearned or unused portion of the
retainer described in Section 4(b) below within thirty (30) days after the
termination of this Agreement; provided, however, that if BGI in good faith
asserts that it should be entitled to retain all or any portion of such unearned
or unused retainer for a period in excess of such thirty (30) day period, BGI
and the Employer may agree to such extension on such terms and conditions as are
acceptable to the Employee and BGI, and in conformity with this Agreement and
the Indemnification Agreement signed concurrently herewith.
4. Compensation of Employee.
Base Salary. Notwithstanding anything contained in this Agreement to
the contrary, no compensation or other renumeration or obligation shall be due
to BGI or Employee hereunder, other than Employer's obligation to pay Employee
at his hourly rate ($180.00) for services provided from April 27, 1998 and
business expenses incurred, if BGI and Employee have not completed a due
diligence review of matters pertaining to the Employer which is sufficient in
scope to allow Employee to execute the Employer's Form S-1 Registration
Statement as its Chief Financial Officer within ten (10) days from the date of
execution of this Agreement. In the event Employee does not complete the
foregoing review within the time period specified, then this Agreement shall
automatically terminate with no further rights or obligations of any of the
parties to this Agreement.
(a) Employer shall pay BGI monthly compensation of $25,000.00
(Twenty-five Thousand Dollars), to be disbursed on a monthly basis in "advance"
on the 12th day of each month for the duration of this Agreement or, at
Employer's election at any time after remitting the third monthly payment
hereunder as set forth below, monthly compensation based upon the total number
of hours
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<PAGE> 8
of services provided by TPS, including travel time, at the rate of one hundred
eighty dollars ($180.00) per hour. Payments will begin on May 12, 1998 and June
12, 1998 and shall continue on the 12th day of each month thereafter by paying
the sum of $25,000 each monthly period (or less if calculated on the hourly
basis) and shall continue thereafter on the 12th day of each month, until this
Agreement is terminated.
In the event that the parties agree that services hereunder can be
provided on less than a full time or less than 90% of a single person's full
time working time, payment may be made at the hourly rate set forth above;
provided that, (i) Employer advises Employee fifteen (15) days in advance of its
intention to pay Employee based upon an hourly rate (part-time basis) for future
monthly periods; and (ii) Employee shall be entitled to render its services on a
part-time basis primarily from BGI's office in Encino, California, with such
travel to Employer's offices or other designations as may be required by
Employer.
(b) Retainer. The Employer shall pay BGI a retainer of $40,000 as a
deposit for and to secure the Employer's obligations to pay BGI the monthly rate
described above and the Employer's obligations to reimburse BGI for the expenses
described in Section 4 (c) below.
(c) Expenses. The Employer shall reimburse BGI for Employee's
business expenses which he may incur in connection with his employment under
this Agreement, including, without limitation, travel (excluding "normal meals
in Johnson City"), apartment and rental car in Johnson City, hotel,
entertainment, attorney's fees for the preparation of this Agreement and the
accompanying Indemnity Agreement as well as any other related documents, up to
the sum of $6,000.00 for said attorney's fees. On Monday of each week during the
duration of this Agreement,
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<PAGE> 9
Employee shall submit to the Employer a written invoice for all amounts required
to be paid to Employee and BGI under this Agreement. The Employer shall pay
Employee the amount shown on such invoice within two (2) business days after it
receives the invoice. The invoices to the Employer shall be paid by the Employer
so as to maintain the retainer described in Section 4(b) above at not less than
$40,000 during the first sixty (60) days hereunder and thereafter from such
retainer; provided that, in no event shall the retainer be reduced below the sum
of $32,500 during the period that Employee holds the title of Chief Financial
Officer of Employer.
(d) Interest on Past Due Obligations. Any monetary payment due BGI
under subsection (c) above, not received by BGI within thirty (30) days
following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of ten percent (10%) per
annum, but not exceeding the maximum rate allowed by law.
(e) Testimony and Post-Retention Services. Should BGI or any of its
agents or employees be required to testify at or submit information to any
judicial or administrative proceeding (including bankruptcy proceedings)
concerning matters in any way related to the services to be provided hereunder
or be otherwise required to provide services relating to or connected with the
services provided hereunder of any nature whatsoever after the term of this
Agreement and any and all extensions thereof have expired, Employer agrees to
pay BGI the reasonable value of the time involved by BGI or its agents and/or
employees in providing such services, including preparation therefor as well as
preparing and attending judicial and administrative proceedings (whether such
proceedings be trials, hearings, deposition, answering of interrogatories,
producing documents or otherwise). The reasonable value of the time, including
travel time, shall be the hourly rate set forth
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<PAGE> 10
in Section 7(a) of this Agreement.
5. Taxes. BGI shall have the sole and exclusive responsibility to pay
when due all federal, state and local taxes, governmental fees and other like
expenses as may be applicable to it under this Agreement and shall make and file
when due all such reports as may be required in connection therewith. In
addition to all other amounts payable to Employee under this Agreement, BGI
shall pay when due all withholding taxes and all other employment-related taxes
and expenses, including, without limitation, social security and unemployment
taxes related to Employee's employment under this Agreement.
6. Employee Benefits. Employer shall have no responsibility for any
employee benefits for BGI or Employee. BGI shall be solely and exclusively
responsible for any benefits, if any, that Employee may be entitled to
participate in, and BGI shall provide any medical, disability, dental and/or
life insurance for Employee. BGI at its own expense shall provide itself and, if
possible, TPS, with errors and omissions insurance coverage to the extent such
coverage is available. Such insurance shall be in form and substance reasonably
satisfactory to Employee and shall be bound for a term of five (5) years.
7. Directors' and Officers' Insurance. Employer shall obtain directors'
and officers' liability insurance covering Employee for any and all damages,
expenses, liabilities, costs and expenses, including, without limitation,
attorneys' and other professionals' fees, based on occurrences arising from
Employee's services under or in connection with this Agreement in form and
substance reasonably satisfactory to Employee, effective April 30, 1998 as
evidenced by Exhibit A hereto.
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<PAGE> 11
8. Arbitration, Attorneys' Fees and Cost. Employer, BGI and Employee do
not anticipate any future issues to arise between them, but it is always prudent
to provide an amicable process to resolve any that may occur. Therefore,
Employer, BGI and Employee mutually agree that Employer, BGI and Employee will
use all reasonable efforts to resolve amicably any controversy or claim arising
out of or relating to this Agreement. In the event any controversy or claim
cannot be resolved by agreement, the parties mutually agree to arbitration in
Los Angeles, California, in accordance with the rules of the American
Arbitration Association in effect as of the date of this Agreement (which are
incorporated by reference herein), and judgment upon the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction. The arbitration
shall proceed in the absence of any party which, after due notice, fails to be
present or fails to obtain an adjournment. Should Employer, BGI or Employee
institute any action or proceeding respecting this Agreement, the prevailing
party will be entitled to reasonable fees, costs and expenses of attorneys,
accountants and other professionals and Employees.
9. Entire Agreement. This Agreement and the accompanying Indemnification
Agreement, which is Exhibit B hereto, supersede any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of BGI and Employee by the Employer and contains all of the
integrated covenants and agreements between the parties with respect to such
employment in any matter whatsoever. Each of the parties hereto represents and
acknowledges that each has been represented by his or its own independent
counsel in negotiating this Agreement.
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10. Partial Invalidity. If any provision in this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
11. Construction. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California. Terms used in the
plural shall include the singular and terms used in the singular shall include
the plural. The headings in this Agreement are for convenience of reference only
and shall not be used to interpret or change the substance of this Agreement.
12. Amendments. This Agreement may not be amended, modified, varied or
supplemented except by a writing that is signed by BGI, Employee and Employer.
BGI, Employee and Employer irrevocably waive any right to seek to amend, modify,
vary or supplement this Agreement pursuant to any statute, rule or authority,
equitable or otherwise, without the written consent of all parties.
13. Further Assurances. Employer, BGI and Employee shall execute and
deliver any and all documents or instruments and shall take any and all actions
which are or may be reasonably necessary to effectuate the purposes of this
Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, all which taken together shall constitute one and the same
document.
15. Notices. All notices, demands, requests and other communications
required hereunder or given pursuant hereto shall be in writing and shall be
deemed given on the second day following the day deposited in the United State
mail, first class mail, with postage prepaid and
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properly addressed to the appropriate party at the address set forth below, or
at such other place as such party may from time to time hereafter designate to
such other party in writing:
If to Employee or BGI: THE BETA GROUP, INC.
5023 Haskell Avenue
Encino, California 91436
Attention: Thomas P. Scully
Telephone: (818) 784-9630
Facsimile: (818) 784-7245
With a copy to: John A. Lapinski, Esq.
Clark & Trevithick
800 Wilshire Boulevard
Twelfth Floor
Los Angeles, California 90017
If to Employer: FLOUR CITY INTERNATIONAL
915 Riverview Drive
Johnson City, Tennessee 37601
Attention: Michael Russo
Telephone: (423) 928-2724
Facsimile: (423) 928-0216
With a copy to: William Lopshire, Esq.
Manning, Marder & Wolfe
707 Wilshire Boulevard
Forty-fifth Floor
Los Angeles, California 90017
All such notices, demands, requests and other communications may also be
given by telecopier, telex, telegram, cable or hand delivery, and such notices,
demands, requests and other communications shall be deemed given upon delivery
to the address set forth above.
16. Survival. The Employer's obligations under this Agreement shall
survive confirmation of any plan of reorganization of the Employer's Chapter 11
case if one should arise or any action under Chapter 7. The Employer irrevocably
waives any right to propose any plan that
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is inconsistent with this Agreement.
17. Successors and Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their successors and
assigns, including any trustee appointed in any resulting or subsequent Chapter
11 cases or any trustee appointed in any resulting or subsequent Chapter 7
cases; provided, however, that neither BGI, Employee or Employer may assign any
of their rights or delegate any of their duties hereunder without the other
parties' written consent, and any assignment or delegation made without such
consent shall be void. The terms of this Agreement shall be binding upon the
Employer, any entity issuing securities under any plan, any entity that acquire
property under any plan, and any creditor or equity security holder of the
Employer, and all interested parties in the Employer's bankruptcy cases.
18. Conditions. The effectiveness of this Agreement is subject to (a)
unanimous approval of this Agreement by the Board of Directors of Employer or
its Executive Committee and due execution of appropriate resolutions evidencing
such approval in accordance with applicable law; and (b) unanimous approval by
the Board of Directors of Employer of such amendments to the articles and
by-laws of the Employer and such resolutions as are required to satisfy the
terms of Section 23 below, no later than May 6, 1998.
19. No Liability. BGI and Employee shall have no responsibility or
liability for any claims, obligations, demands, taxes, fees, charges or
liabilities of the Employer of whatever kind or nature and whenever and however
arising, including, without limitation, any taxes, fees or charges owed by the
Employer or any other entity to any federal, state or local government or agency
thereof or to any other creditor no matter what the reason. In addition to the
insurance provided for above,
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Employer shall indemnify and hold BGI and Employee harmless from any and all
liability, whether public or private, including specifically any tax liability
of Employer or any of its agents, in the accompanying Indemnification Agreement
and to the extent that either Errors and Omissions Insurance or Directors and
Officers Liability Insurance is not provided or is not available.
20. Articles and Bylaws. To the extent necessary, the articles and
bylaws of the Employer shall be amended to ensure that the Employer is fully
authorized and empowered to enter into this Agreement and that the person
signing this Agreement on behalf of the Employer is fully authorized and
empowered to do so.
21. Toxic and Hazardous Waste. Employer agrees that is shall be solely
responsible for the removal and disposal of any hazardous wastes, toxic
substances or related materials as these are defined by all applicable federal,
state and local status, regulations, rules, ordinances, directives, guidelines
or requirements (collectively, "Hazardous Materials"), created, generated and/or
used by Employer prior to, during or subsequent to entering into this Agreement
with BGI and Employee and that the said removal and disposal shall be carried
out in compliance with all governmental requirements concerning the same.
Employer hereby agrees to indemnify, hold harmless and defend Employee, its
successors and assigns from and against any and all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and judicial proceedings
and orders, judgments, remedial or removal action requirements, enforcement
actions of any kind, and all costs and expenses incurred in connection
therewith, arising out of the following if attributable to the acts or omissions
of Employer, its successors and assigns and their employees, agents, contractors
or subcontractors;
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(a) the presence on or in Employer's premises of any Hazardous
Materials occurring during the duration of this Agreement, or any releases or
discharges of Hazardous Materials on, in or from the Employer's premises
occurring during the duration of this Agreement; or
(b) any activity carried on or undertaken on or off the Employer's
premises during the duration of this Agreement by the Employer's or any
employee, agent, contractor or subcontractor of the Employers in connection with
the handling, treatment, removal, storage, decontamination, cleanup, transfer or
disposal of any Hazardous Materials located in, on, under or about the premises.
22. Duty to Inform BGI and Employee of Existence of Hazardous Material.
If Employer knows, or has reasonable cause to believe that Hazardous Materials
or a condition involving or resulting from same, has come to be located in, on,
under or about the Employer's premises, other than as previously consented to by
BGI and the Employee, Employer shall immediately give written notice of such
facts to BGI and Employee within three (3) calendar days. Employer shall also
immediately give Employee a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action or proceeding given
to, or received from, any governmental authority or private party, or persons
entering or occupying the Employer's premises, concerning the presence, spill,
release, discharge of, or exposure to, any Hazardous Materials or contamination
in, on, under or about the Employer's premises, including but not limited to,
all such documents as may be involved in any reportable uses involving the
premises.
23. Indemnification for Hazardous Materials. Employer shall indemnify,
protect, defend and hold BGI and Employee harmless from and against any and all
losses or damages, liabilities,
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judgments, costs, claims, liens, expenses, penalties, permits and attorneys' and
Employee's fees arising out of or involving any Hazardous Materials or storage
tank brought into the Employer's premises by or for the Employer or under the
Employer's control. Employer's obligations under this section shall include, but
not be limited to, the effects of any contamination or injury to persons,
property or the environment suffered by Employer, and the cost of investigation
(including Employees' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Agreement. No
termination, cancellation or release agreement entered into by Employer, BGI and
Employee shall release Employer from its obligations under this Agreement with
respect to Hazardous Materials or storage tanks, unless specifically so agreed
by BGI and Employee in writing at the time of such agreement.
(SIGNATURES ON FOLLOWING PAGE)
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As of the 30th day of April, 1998, the parties hereto have executed this
Agreement.
EMPLOYER:
FLOUR CITY INTERNATIONAL, INC.
By: /s/ Michael Russo
-------------------------
Name: Michael Russo
-------------------------
Title: President
-------------------------
EMPLOYEE:
/s/ Thomas P. Scully
-------------------------
Thomas P. Scully
THE BETA GROUP, INC.
By: /s/ Thomas P. Scully
---------------------
Name: Thomas P. Scully
---------------------
Title: President
---------------------
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