SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File No.
October 31, 1995 0-10146
- --------------------- -------------------
ABRAMS INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Georgia 58-0522129
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5775-A Glenridge Drive, N.E., Suite 202, Atlanta, Georgia 30328
---------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(404) 256-9785
---------------------------------------------------
(Registrant's telephone number, including area code)
N/A
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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 and 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
--- ---
The number of shares of $1.00 par value Common Stock of the
Registrant outstanding as of November 15, 1995 was 2,970,856.<PAGE>
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
<TABLE>
<CAPTION>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
October 31, 1995 April 30, 1995
---------------- --------------
ASSETS
- ------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 5,672,959 $ 8,270,703
Receivables (note 2) 18,888,431 10,782,910
Less: Allowance for doubtful accounts (134,725) (100,189)
Inventories (note 3) 2,116,153 2,655,906
Costs and earnings in excess of billings 1,753,415 1,568,845
Deferred income taxes 1,212,791 1,212,791
Other 468,353 388,079
----------- -----------
Total current assets 29,977,377 24,779,045
----------- -----------
INCOME-PRODUCING PROPERTIES, net 50,123,079 50,784,045
PROPERTY, PLANT AND EQUIPMENT, net 4,081,811 4,281,112
OTHER ASSETS:
Land held for investment 4,950,293 4,950,293
Notes receivable 674,053 783,293
Cash surrender value of life insurance on
officers, net 912,498 889,712
Deferred loan costs, net 1,029,310 1,128,040
Other 944,148 981,205
----------- -----------
$92,692,569 $88,576,745
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable $13,053,935 $7,859,614
Billings in excess of costs and earnings 1,889,457 500,468
Accrued expenses 2,800,299 4,046,752
Current maturities of long-term debt 1,617,653 1,510,122
----------- ----------
Total current liabilities 19,361,344 13,916,956
----------- ----------
DEFERRED INCOME TAXES 2,207,525 2,207,525
MORTGAGE NOTES AND BONDS PAYABLE, less current 39,464,610 40,518,332
maturities
OTHER LONG-TERM DEBT, less current maturities 11,236,321 11,061,897
----------- -----------
Total liabilities 72,269,800 67,704,710
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, $1 par value; authorized 5,000,000
shares; 3,010,039 issued and 2,970,856 outstanding
in 1996 and 3,010,039 issued and 2,993,540
outstanding in 1995 3,010,039 3,010,039
Additional paid-in capital 2,012,190 2,012,190
Retained earnings 15,559,841 15,906,239
----------- -----------
Total paid-in capital and retained earnings 20,582,070 20,928,468
Less: Treasury stock (159,301) (56,433)
----------- -----------
Total shareholders' equity 20,422,769 20,872,035
----------- -----------
$92,692,569 $88,576,745
=========== ===========
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
SECOND QUARTER ENDED SIX MONTHS ENDED
OCTOBER 31, OCTOBER 31,
-------------------------- ---------------------------
1995 1994 1995 1994
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Construction $28,529,987 $25,479,913 $55,395,518 $52,899,360
Manufacturing 3,841,411 5,051,703 8,867,425 9,205,774
Real estate 2,742,252 2,654,777 5,496,468 5,948,357
----------- ----------- ------------ ------------
35,113,650 33,186,393 69,759,411 68,053,491
Less: Intersegment eliminations (73,827) - (73,827) -
----------- ----------- ------------ ------------
35,039,823 33,186,393 69,685,584 68,053,491
Interest 114,661 93,264 249,885 196,837
Other 13,974 12,794 24,713 23,499
----------- ----------- ------------ ------------
35,168,458 33,292,451 69,960,182 68,273,827
----------- ----------- ------------ ------------
COSTS AND EXPENSES:
Applicable to REVENUES-
Construction 27,222,520 24,451,135 53,018,850 50,718,783
Manufacturing 3,052,715 3,808,720 6,882,124 7,072,947
Real estate, exclusive of interest 1,585,583 1,411,826 3,019,229 3,146,019
----------- ----------- ------------ ------------
31,860,818 29,671,681 62,920,203 60,937,749
Less: Intersegment eliminations (73,164 - (73,164) -
----------- ----------- ------------ ------------
31,787,654 29,671,681 62,847,039 60,937,749
----------- ----------- ------------ ------------
Selling, shipping, general and
administrative:
Construction 619,680 467,398 1,161,075 1,024,775
Manufacturing 903,159 1,093,718 1,901,753 2,111,598
Real estate 374,573 416,774 798,267 821,258
Parent 560,850 517,734 1,092,158 1,009,182
----------- ----------- ------------ ------------
2,458,262 2,495,624 4,953,253 4,966,813
---------- ----------- ------------ -----------
Interest costs incurred 1,205,122 1,210,528 2,422,316 2,411,214
----------- ----------- ------------ ------------
35,451,038 33,377,833 70,222,608 68,315,776
----------- ----------- ------------ ------------
LOSS BEFORE INCOME TAXES (282,580) (85,382) (262,426) (41,949)
INCOME TAX BENEFIT (103,000) (31,000) (95,000) (14,000)
----------- ----------- ------------ ------------
NET LOSS $(179,580) $(54,382) $(167,426) $(27,949)
=========== =========== ============ ============
NET LOSS PER SHARE $ (.06) $ (.02) $ (.06) $ (.01)
=========== =========== ============ ============
DIVIDENDS PER SHARE $ .03 $ .03 $ .06 $ .06
=========== =========== ============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING 2,974,030 2,993,540 2,983,470 2,993,540
=========== =========== ============ ============
See accompanying notes to consolidated financial statements.
</TABLE>
2
<PAGE>
<PAGE>
ABRAMS INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED OCTOBER 31,
----------------------------
1995 1994
---------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $(167,426) $ (27,949)
Adjustments to reconcile net loss to net cash
used in operating activities-
Depreciation and amortization 1,652,660 1,556,289
Gain on sales of real estate - (317,330)
Decrease (increase) in assets:
Receivables (8,070,985) (2,828,691)
Inventories 539,753 (309,125)
Costs and earnings in excess of billings (184,570) (1,074,399)
Other current assets (80,274) 78,727
Other assets 81,716 407,098
Increase (decrease) in liabilities:
Accounts payable 5,194,321 2,557,360
Billings in excess of costs and earnings 1,388,989 1,293,956
Accrued expenses (1,246,453) (2,275,625)
Income taxes payable - (750,243)
---------- ----------
Net cash used in operating activities (892,269) (1,689,932)
---------- ----------
Cash flows from investing activities:
Proceeds from sale of real estate - 630,000
Additions to properties, property, plant and
equipment, net (651,868) (552,022)
---------- ----------
Net cash provided by (used in) investing activities (651,868) 77,978
---------- ----------
Cash flows from financing activities:
Debt proceeds 4,856,000 2,233,000
Debt repayments (5,627,767) (2,972,018)
Additions to deferred loan costs - (45,911)
Cash dividends (178,972) (179,612)
Repurchases of common stock (102,868) -
---------- ----------
Net cash used in financing activities (1,053,607) (964,541)
---------- ----------
Net decrease in cash and cash equivalents (2,597,744) (2,576,495)
Cash and cash equivalents at beginning of period 8,270,703 7,127,188
---------- ----------
Cash and cash equivalents at end of period $5,672,959 $4,550,693
========== ==========
Supplemental schedule of cash flow information:
Interest paid $2,549,250 $2,478,197
========== ==========
Income taxes paid $ 208,402 $ 827,308
========== ==========
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<PAGE>
ABRAMS INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31, 1995 AND APRIL 30, 1995
(UNAUDITED)
NOTE 1. UNAUDITED STATEMENTS
- -----------------------------
The accompanying unaudited consolidated financial statements
have been prepared by the Company in accordance with generally
accepted accounting principles, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements have been condensed or omitted pursuant to
such rules and regulations, although management believes that
the disclosures are adequate to make the information presented
not misleading. In the opinion of management, the accompanying
financial statements contain all adjustments, which consist
solely of normal recurring accruals, necessary for a fair
statement of the results for the interim periods presented.
These financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included
in the Company's Annual Report to Shareholders for the year ended
April 30, 1995. Results of operations for interim periods are
not necessarily indicative of annual results.
NOTE 2. RECEIVABLES
- --------------------
All contract and trade receivables are expected to be
collected within one year.
NOTE 3. INVENTORIES
- --------------------
The classes of inventory are as follows:
<TABLE>
<CAPTION>
October 31, 1995 April 30, 1995
---------------- --------------
<S> <C> <C>
Finished goods $1,350,105 $1,790,849
Work in process 459,051 552,803
Raw materials 306,997 312,254
---------- ----------
$2,116,153 $2,655,906
========== ==========
</TABLE>
NOTE 4. RECLASSIFICATIONS
Certain reclassifications have been made to the fiscal 1995
consolidated financial statements to conform with classifications
adopted in fiscal 1996.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
- ----------------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
- -----------------------------------
Changes in CONSOLIDATED BALANCE SHEETS between April 30, 1995,
- --------------------------------------------------------------
and October 31, 1995.
- --------------------
Cash and cash equivalents decreased by $2,597,744 because of
funding the working capital needs of the Company. The timing of
the submission of invoices for construction work performed and
the payment of invoices related to construction work, were the
primary factors that contributed to increases in the following
items: (1) Billings in excess of costs and earnings -
$1,388,989; (2) Accounts receivable - $8,070,985; and (3)
Accounts payable - $5,194,321. The decrease in accrued expenses
of $1,246,453 was associated with payment of year-end accruals.
Results of operations of second quarter and first six months of
fiscal 1996 compared to second quarter and first six months of
fiscal 1995.
REVENUES
For the second quarter 1996, Consolidated REVENUES, including
Interest income and Other income, were $35,168,458, compared to
$33,292,451 for the second quarter 1995. Interest income was
$114,661 for the second quarter 1996, compared to $93,264 for the
second quarter 1995.
For the first six months 1996, Consolidated REVENUES, including
Interest income and Other income were $69,960,182, compared to
$68,273,827 for the first six months 1995. Interest income was
$249,885 for the first six months 1996, compared to $196,837 for
the first six months 1995. Other income was $24,713 for the
first six months 1996, compared to $23,499 for the first six
months 1995.
The figures in Chart A are before Intersegment eliminations and
do not include Interest income or Other income.
<TABLE>
<CAPTION>
CHART A
REVENUE SUMMARY BY SEGMENT
(In Thousands, Except Percentages)
Second Quarter Ended Six Months Ended
October 31, Amount Percent October 31, Amount Percent
-------------------- Increase Increase ----------------- Increase Increase
1995 1994 (Decrease) (Decrease) 1995 1994 (Decrease) (Decrease)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Construction (1) $28,350 $25,480 $3,050 12 $55,396 $52,899 $2,497 5
Manufacturing (2) 3,842 5,051 (1,209) (24) 8,867 9,206 (339) (4)
Real Estate (3) 2,742 2,655 87 3 5,496 5,948 (452) (8)
- -------------------------------------------------------------------------------------------------------------------------
$35,114 $33,186 $1,928 6 $69,759 $68,053 $1,706 3
</TABLE>
5
<PAGE>
<PAGE>
NOTES TO CHART A
(1) The growth in revenues in the second quarter and first six
months 1996 compared to the second quarter and first six months
1995 is the result of increased levels of activity in the
construction of new buildings and expansions of others for both
new and existing customers. The amounts reported include
intercompany revenues of $73,827 in the second quarter and first
six months 1996 and no intercompany revenues for the prior
periods. The intercompany revenues are related to construction
work performed for the Real Estate Segment at one of its shopping
centers.
(2) REVENUES for the second quarter and first six months 1996
were lower than those of the second quarter and first six months
1995. Sales to two of the Company's customers increased
approximately $3,300,000; however, decreased sales to other
customers offset this increase.
(3) REVENUES for the first six months 1996 were lower than those
of the first six months 1995 because of the sale of a shopping
center outlot during the first quarter 1995. There were no land
sales in 1996.
The following table shows the backlog of contracts and
orders by segment:
<TABLE>
<CAPTION>
October 31,
---------------------------
1995 1994
----------- -----------
<S> <C> <C>
Construction $27,104,000 $34,788,000
Manufacturing 5,182,000 7,536,000
Real Estate 10,333,000 10,083,000
Less: Intersegment Eliminations (671,000) -
----------- -----------
Total Backlog $41,948,000 $52,407,000
=========== ===========
</TABLE>
COSTS AND EXPENSES: Applicable to REVENUES
As a percentage of Segment REVENUES (See Chart A) for the
second quarter 1996 and 1995, the applicable COSTS AND EXPENSES
(See Chart B) were 91% and 89%, respectively. As a percentage of
Segment REVENUES (See Chart A) for the first six months 1996 and
1995, the applicable COSTS AND EXPENSES (See Chart B) were 90% in
each period. The figures in Chart B are prior to Intersegment
eliminations.
6
<PAGE>
CHART B
COSTS AND EXPENSES APPLICABLE TO REVENUES SUMMARY BY SEGMENT
(In Thousands, Except Percentages)
<TABLE>
<CAPTION>
Percent of Segment Revenues Percent of Segment
Revenues
Second Quarter Ended For Second Quarter Ended Six Months Ended For Six Months Ended
October 31, October 31, October 31, October 31,
----------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Construction $27,222 $24,451 95 96 $53,019 $50,719 96 96
Manufacturing (1) 3,053 3,809 80 75 6,882 7,073 78 77
Real Estate (2) 1,586 1,412 58 53 3,019 3,146 55 53
- ----------------------------------------------------------------------------------------------------------------------------------
$31,861 $29,672 91 89 $62,920 $60,938 90 90
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO CHART B
----------------
(1) The increase in the percentage of COSTS AND EXPENSES:
Applicable to REVENUES for the second quarter and first six months
1996 compared to the second quarter and first six months 1995 is the
result of (a) negative labor and material variances; (b)
underabsorption of plant overhead; and (c) an increase in the aged
inventory reserve.
(2) The increase in the dollar amount and percentage of COSTS AND
EXPENSES: Applicable to REVENUES for the second quarter 1996
compared to the second quarter 1995 is attributable to increased
shopping center repairs and maintenance expenses of approximately
$125,000, which includes the painting of two shopping centers, roof
repairs at four shopping centers, and parking lot repairs and
inspection expenses at several shopping centers.
SELLING, SHIPPING, GENERAL AND ADMINISTRATIVE EXPENSES
For the second quarter 1996 and for the second quarter 1995,
Selling, shipping, general and administrative expenses were
$2,458,262 and $2,495,624, respectively. As a percentage of
Consolidated REVENUES, these expenses were 7% and 8%, respectively.
For the first six months 1996 and for the first six months 1995,
Selling, shipping, general and administrative expenses were
$4,953,253 and $4,966,813, respectively. As a percentage of
Consolidated REVENUES these expenses were 7% in each period. In
reviewing Chart C, the reader should recognize that the volume of
revenues generally will affect the amounts and percentages. The
percentages in Chart C are based upon expenses as they relate to
Segment REVENUES (Chart A) prior to Intersegment eliminations,
except that Parent and Total expenses relate to Consolidated
REVENUES.
7
<PAGE>
<PAGE>
CHART C
SELLING, SHIPPING, GENERAL AND ADMINISTRATIVE EXPENSES BY SEGMENT
(In Thousands, Except Percentages)
<TABLE>
<CAPTION>
Percent of Segment Revenues Percent of Segment
Revenues
Second Quarter Ended For Second Quarter Ended Six Months Ended For Six Months Ended
October 31, October 31, October 31, October 31,
----------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Construction (1) $ 620 $ 467 2 2 $1,161 $1,025 2 2
Manufacturing (2) 903 1,094 24 22 1,902 2,112 21 23
Real Estate 374 417 14 16 798 821 15 14
Parent (3) 561 518 2 2 1,092 1,009 2 2
----------------------------------------------------------------------------------------------------------
$2,458 $2,496 7 8 $4,953 $4,967 7 7
----------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO CHART C
----------------
(1) On a dollar basis, Selling, shipping, general and
administrative expenses were higher for the second quarter and
first six months 1996 compared to the second quarter and first
six months 1995 primarily because of increased health insurance
costs.
(2) On a dollar basis, Selling, shipping, general and
administrative expenses were lower for the second quarter and
first six months 1996 as compared to the second quarter and first
six months 1995 because of the following decreases: (a) personnel
costs approximately $100,000; (b) chairitable contributions
approximately $38,000; (c) travel and entertainment expenses
approximately $24,000.
(3) On a dollar basis, Selling, shipping, general and
administrative expenses were higher for the second quarter and
first six months 1996 as compared to the second quarter and first
six months 1995 primarily because of increased personnel costs.
Interest rate swap agreement.
- -----------------------------
The Company entered into an interest rate swap agreement
with SunTrust Bank, Atlanta, effective January 4, 1994, which
terminates July 1, 1997. The notional amount reduces monthly
from approximately $9.9 million at October 31, 1995, to $9.5
million prior to expiration of the agreement. The agreement
effectively caps and sets a floor interest rate of 8% and 6%,
respectively, on the construction loan which had an outstanding
balance of $9,573,327 at October 31, 1995, and carries a floating
interest rate of prime plus 3/8%. The Company expects the
counterparty to the agreement to abide by the terms of the
agreement. A determination is made each reporting period whether
amounts are receivable from or payable to the counterparty under
the agreement and such accrual is made in the Company s financial
statements.
Liquidity and capital resources.
- --------------------------------
Between April 30, 1995, and October 31, 1995, working
capital decreased by $246,056. Operating activities used cash of
$892,269. Investing activities used cash of $651,868 primarily
for purchasing new equipment and computers to increase productivity.
Financing activities used cash of $1,053,607 primarily for debt
8
<PAGE>
repayment. At October 31, 1995, the Company and its subsidiaries
had available unsecured committed lines of credit totaling $13,000,000,
against which $863,000 was outstanding.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
At the Annual Meeting (held on August 23, 1995), the shareholders
voted upon and approved the Board s nominees for directors. The
voting was as follows:
<TABLE>
<CAPTION>
DIRECTORS VOTES FOR VOTES WITHHELD
- ------------------------------------------------------------------------------
<S> <C> <C>
Bernard W. Abrams 2,779,011 11,184
Edward M. Abrams 2,779,011 11,184
Alan R. Abrams 2,779,011 11,184
J. Andrew Abrams 2,779,011 11,184
Paula Lawton Bevington 2,779,277 10,918
Richard H. Danielson 2,779,277 10,918
Donald W. MacLeod 2,779,277 10,918
Anthony Montag 2,772,623 17,572
Joseph H. Rubin 2,779,277 10,918
Felker W. Ward, Jr. 2,779,277 10,918
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a)Exhibit #10g
------------
Bernard W. Abrams Employment Agreement dated August 23, 1995.
(b) Exhibit 27 - Financial Data Schedule
(c) The Registrant has not filed any reports on form 8-K during
the quarter ended October 31, 1995.
9
<PAGE>
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.
ABRAMS INDUSTRIES, INC.
(Registrant)
Date: December 4, 1995 /s/ Edward M. Abrams
----------------- Edward M. Abrams
Chairman of The Board and
Chief Executive Officer
Date: December 4, 1995 /s/ Joseph H. Rubin
---------------- Joseph H. Rubin
President, Chief Operating Officer,
Chief Financial Officer and Chief
Accounting Officer
10
Exhibit "10g"
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made and entered into as of the 19th day
of May, 1995, by and between ABRAMS INDUSTRIES, INC., a Georgia
corporation (the "Company"), and BERNARD W. ABRAMS ("Executive").
W I T N E S S E T H:
--------------------
WHEREAS, Executive has devoted over forty years of valuable
service to the Company and has during such time accumulated
significant knowledge and understanding of the Company's
operations, markets, industries, suppliers and employees, to
which knowledge the Company desires to have long-term access;
WHEREAS, the parties hereto desire to enter into an
agreement for the employment of Executive by the Company on the
terms and conditions hereinafter stated;
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment, Duties and Term. (a) Subject to the terms
and conditions of this Agreement, the Company hereby employs
Executive, and Executive hereby accepts such employment.
Executive shall serve initially as Chairman of the Executive
Committee of the Company, a position which he has held for more
than ten years, and shall perform such duties and functions for
the Company as are customarily incident to such position. During
the Term (as defined below), Executive may serve in other
positions with the Company as he and the Company may mutually
agree. The Company will provide Executive with reasonable office
space and secretarial assistance.
(b) Unless earlier terminated as provided herein,
Executive's employment under this Agreement shall be for a term
commencing as of August 23, 1995 (the "Effective Date") and
ending on August 23, 2005. The date on which Executive's
employment terminates as provided in this Agreement is herein
called the "Termination Date", and the period from the Effective
Date through the Termination Date is herein called the "Term".
(c) Executive shall not, without the prior written
consent of the Company, at any time during the Term, engage in
any activity which is competitive with the business of the
Company.
2. Compensation. In consideration of Executive's services
hereunder, Company shall pay to Executive compensation as set
forth below (which compensation shall be paid, except as
otherwise provided herein, in accordance with the normal
compensation practices of the Company and shall be subject to
such deductions and withholdings as are required by law or
general policies of the Company in effect from time to time):
(a) The Company shall pay to Executive an annual
salary which shall be paid on a weekly basis and shall initially
be $200,000 per annum ("Base Compensation"). On each anniversary
of the Effective Date, Base Compensation shall be increased by
five percent (5%) over the Base Compensation for the year
preceding such anniversary.
<PAGE>
(b) The Company shall pay for membership dues and
miscellaneous items as are currently provided to Executive and as
are provided to executive officers of the Company from time to
time.
(c) Executive shall be entitled to the medical
benefits that are provided from time to time by the Company's
medical/dental insurance plan. Should Executive marry, his wife
and eligible dependents shall be entitled to the medical/dental
benefits that are provided from time to time to spouses and
eligible dependents of executive officers by the Company's
medical/dental insurance plan. Such benefits may also be
provided through Medicare coverage available to Executive or
supplemental medical insurance, or a combination of both, so long
as the benefits provided to Executive and the out of pocket costs
incurred by Executive are substantially the same as those that
would be provided and incurred by Executive under the Company's
medical/dental insurance plan.
(d) The Company shall pay to Executive each fiscal
year in cash an amount equal to the total cash and deferred
payments which would have been paid or credited to Executive for
that fiscal year had he been an eligible participant in the
Company's Profit Sharing Plan.
(e) Executive shall be entitled to participate in any
other employee benefit plans generally provided by the Company to
its executive officers, but only if and to the extent provided in
such employee benefit plans and for so long as the Company
provides or offers such benefit plans. For purposes of
determining his eligibility to participate in such employee
benefit plans, Executive shall be deemed a regular full-time
salaried employee.
(f) The compensation and benefits set forth above in
this Section 2 shall cease on the Termination Date, except
amounts payable for any period prior to the Termination Date and
except as required by law or the express terms of any employee
benefit plan in which Executive participates pursuant hereto.
Nothing herein shall affect Executive's right to COBRA benefits,
Short-Term Disability Plan benefits and Long-Term Disability Plan
benefits, nor affect the rights of beneficiaries under any life
insurance policies insuring Executive's life.
3. Confidential Information. (a) During the Term,
Executive agrees that he shall not disclose to any person, or
otherwise use, except in connection with and as necessary for his
duties performed for the Company, any Company Confidential
Information; provided, however, that Executive may make
disclosures required by a valid order or subpoena issued by a
court or administrative agency of competent jurisdiction, in
which event Executive will promptly notify the Company of such
order or subpoena to provide the Company an opportunity to
protect its interests.
(b) "Company Confidential Information," as used in
this Agreement, means information relating to the business of the
Company which derives value, actual or potential, from not being
generally known to other persons. Company Confidential
Information does not include information which becomes generally
known to the financial community without breach of this
Agreement.
4. Termination. Executive's employment under this
Agreement may be terminated only in accordance with the following
provisions:
(a) Executive's employment hereunder shall be deemed
to be terminated as of the date of Executive's death. In the
event of Executive's total disability the Executive's employment
2
<PAGE>
hereunder shall be deemed to be terminated on the second August
23rd following the date of total disability, except that in no
event shall this contract extend beyond August 23, 2005.
(b) The Company may terminate Executive's employment
hereunder for "Cause," which shall mean (i) Executive's gross
negligence or willful misconduct in the performance of his duties
hereunder which results in material harm to the Company, or (ii)
Executive's conviction of a felony or crime involving moral
turpitude. A termination of Executive with Cause based on clause
(i) of the preceding sentence shall take effect 90 days after
the Company gives written notice of such termination to Executive
unless Executive shall, during such 90-day period, remedy the
events or circumstances constituting Cause.
5. Interpretation; Severability of Invalid Provisions.
All rights and restrictions contained in this Agreement may be
exercised and shall be applicable and binding only to the extent
that they do not violate any applicable laws and are intended to
be limited to the extent necessary so that they will not render
this Agreement illegal, invalid or unenforceable. If any term of
this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, the remaining
terms shall remain in full force and effect.
6. Notice. All notices, demands and requests, where
permitted to be given under this Agreement, shall be deemed
sufficient if delivered in person or mailed by registered or
2<PAGE>
certified mail, postage prepaid, addressed as follows, or to such
other address as a party may have furnished to the other party in
accordance herewith:
To the Company: To Executive:
Abrams Industries, Inc. Mr. Bernard W. Abrams
Attention: Joseph H. Rubin 3400 Pinestream Road, N.W.
Suite 202 Atlanta, Georgia 30327
5775-A Glenridge Drive
Atlanta, Georgia 30328 Copies To:
Ms. Janet B. Abrams
3101 New Mexico Avenue, N.W.
#823
Washington, D.C. 20016
Mr. David L. Abrams
3003 Van Ness Street
#1027
Washington, D.C. 20008
The parties agree to promptly notify the other of any changes in
their addresses.
7. Agreement Binding; Assignment. This Agreement shall
inure to the benefit of and be binding upon the Company,
Executive, and their respective permitted successors, or legal
representatives. The parties hereto shall not, without consent
of the other, assign or transfer this Agreement or any rights or
obligations hereunder, except that the Company may assign its
rights or obligations under this Agreement without such consent
to any successor to the business of the Company by merger,
consolidation, or the transfer of substantially all the assets of
Company.
3
<PAGE>
8. Nonwaiver. The failure of either party to insist upon
strict performance of the terms of this Agreement or to exercise
any right herein, shall not be construed as a waiver or a
relinquishment for the future of such term or right, but the same
shall continue in full force and effect.
9. Entire Agreement. This Agreement contains the entire
agreement between the parties and no statement, promises or
inducements made by any party hereto, or agent of either party,
which is not contained in this Agreement shall be valid or
binding. This Agreement may not be enlarged, modified or altered
except in writing signed by the parties.
10. Governing Law. This Agreement has been executed and
delivered in and is to be performed in the State of Georgia and
it and the rights and obligations of the parties hereunder shall
be construed under and governed by the laws of the State of
Georgia without giving effect to principles of conflicts of laws.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and Executive has
executed this Agreement, as of the date first written above.
ABRAMS INDUSTRIES, INC.
By: /s/ Edward M. Abrams /s/ Barnard W.Abrams
EDWARD M. ABRAMS BERNARD W. ABRAMS
4
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<NAME> ABRAMS INDUSTRIES, INC.
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