SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-K/A No. 1
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1994
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 1-4596
GROW GROUP, INC.
(Exact name of registrant as specified in its charter)
New York 11-1665588 (State or
other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
200 Park Avenue, New York, NY 10166
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 599-4400
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $.10 par value, New York Stock Exchange
and related Common Stock
Purchase Rights
Securities registered pursuant to Section 12(g) of the Act: None
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 ___ <PAGE>
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the Common Stock of
the Company outstanding as of July 29, 1994 held by
non-affiliates of the Company was approximately $181,400,000
calculated on the basis of the closing price of the Common
Stock on the New York Stock Exchange Composite Transactions
Tape on that date, as reported in The Wall Street Journal.
For purposes of this calculation, the Company has excluded
the market value of the shares of its Common Stock beneficially
owned by Corimon C.A. S.A.C.A. and the directors and executive
officers of the Company as a group. Such exclusion is not an
admission that such persons are "affiliates" of the Company. The
aggregate market value of these excluded shares as of July 29,
1994 was approximately $74,300,000.
The number of shares of Common Stock of the Company
outstanding as of July 29, 1994 was 16,105,838.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following document are incorporated
by reference into the parts of this report indicated below:
Proxy Statement for the Company's Part III
1994 Annual Meeting of Shareholders
2<PAGE>
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports
on Form 8-K
(a)(1) The following consolidated financial statements of
the Company and its subsidiaries are presented in Item 8 of
this Report:
Report of Independent Auditors
Consolidated Statement of Income - Years Ended
June 30, 1994, 1993 and 1992
Consolidated Statement of Stockholders' Equity -
Years Ended June 30, 1994, 1993 and 1992
Consolidated Balance Sheet Income - June 30, 1994 and
1993
Consolidated Statement Income of Cash Flows - Years
Ended
June 30, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
(a)(2) The following Financial Statement Schedules are
presented on pages F-1 through F-2 of this Report:
Schedule VIII -- Valuation and Qualifying Accounts
Schedule IX -- Short-Term Borrowings
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable and, therefore, have been
omitted.
3<PAGE>
Exhibit
Number Description
3(a)(1) Restated Certificate of Incorporation of the
Company filed with the New York Department of
State on October 18, 1965. (Exhibit 2.2 to the
Company's Form S-7 Registration Statement, File
No. 2-57632.)
3(a)(2) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on August 12, 1966.
(Exhibit 2.3 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(3) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on August 19, 1968.
(Exhibit 2.4 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(4) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on November 20, 1968.
(Exhibit 2.5 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(5) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on August 18, 1969.
(Exhibit 2.6 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(6) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on February 1, 1972.
(Exhibit 2.7 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(7) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on May 14, 1973.
(Exhibit 3(a)(7) to the Company's Form 10-K Annual
Report for the fiscal year ended June 30, 1987,
File No. 1-4596.)
4<PAGE>
Exhibit
Number Description
3(a)(8) Certificate of Merger of Grow Chemical Company
into the Company filed with the New York
Department of State on January 14, 1975. (Exhibit
3(a)(8) to the Company's Form 10-K Annual Report
for the fiscal year ended June 30, 1987, File No.
1-4596.)
3(a)(9) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on June 1, 1976.
(Exhibit 3(a)(9) to the Company's Form 10-K Annual
Report for the fiscal year ended June 30, 1987,
File No. 1-4596.)
3(a)(10) Certificate of Merger of Midland Adhesive and
Chemical Corporation into the Company filed with
the New York Department of State on June 29, 1976.
(Exhibit 3(a)(10) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1987, File No. 1-4596.)
3(a)(11) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on December 20, 1976.
(Exhibit 2.10 to Amendment No. 2 to the Company's
Form S-7 Registration Statement, File No.
2-57632.)
3(a)(12) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on January 17, 1977.
(Exhibit 2.11 to Amendment No. 2 to the Company's
Form S-7 Registration Statement, File No.
2-57632.)
3(a)(13) Certificate of Correction filed with the New York
Department of State on January 17, 1977. (Exhibit
2.12 to Amendment No. 2 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(14) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on November 2, 1977.
(Exhibit 3(a)(14) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1987, File No. 1-4596.)
5<PAGE>
Exhibit
Number Description
3(a)(15) Certificate of Merger of Devoe & Raynolds Company,
Inc., Grow Chemical Sealants Corp., Harris Paint
Company and U.S. Paint, Lacquer & Chemical Company
into the Company filed with the New York
Department of State on June 26, 1978. (Exhibit
2.16 to the Company's Form S-7 Registration
Statement, File No. 2-67686.)
3(a)(16) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on April 20, 1979.
(Exhibit 3(a)(16) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1988, File No. 1-4596.)
3(a)(17) Certificate of Amendment of Certificate of
Incorporation of the Company filed with the New
York Department of State on June 27, 1979.
(Exhibit 3(a)(17) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1988, File No. 1-4596.)
3(a)(18) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on October 31, 1979.
(Exhibit 3(a)(18) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1988, File No. 1-4596.)
3(a)(19) Certificate of Merger of Trewax Company into the
Company filed with the New York Department of
State on June 17, 1980. (Exhibit 4(a)(19) to the
Company's Form S-16 Registration Statement, File
No. 2-72089.)
3(a)(20) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on June 25, 1980.
(Exhibit 3(a)(20) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1990, File No. 1-4596.)
3(a)(21) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on February 6, 1986.
(Exhibit 3(a)(21) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1986, File No. 1-4596.)
6<PAGE>
Exhibit
Number Description
3(a)(22) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State in October 1986. Exhibit
3(a)(22) to Amendment No. 1 to the Company's Form
10-K Annual Report for the fiscal year ended June
30, 1987, File No. 1-4596.)
3(a)(23) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New
York Department of State on November 9, 1987.
(Exhibit 4 to the Company's Form 10-Q Quarterly
Report for the quarter ended September 30, 1987,
File No. 1-4596.)
3(b) By-Laws of the Company, as amended. (Exhibit 3.2
to the Company's Current Report on Form 8-K, dated
July 12, 1990, File No. 1-4596.)
4(a) Amended and Restated Rights Agreement, dated as of
August 7, 1992, between the Company and The Bank
of New York, as Rights Agent. (Exhibit 1.1 to
Amendment No. 1 to the Company's Registration
Statement on Form 8-A,
dated February 23, 1988, File No. 1-4596.)
4(b)(1) Credit Agreement (the "Credit Agreement"), dated
as of March 31, 1993, by and among the Company,
Grow Group Insurance, Ltd., Chemical Bank New
Jersey, N.A., Fleet Bank, PNC Bank, Kentucky, Inc.
and Chemical Bank. (Exhibit 4.1 to the Company's
Current Report on Form 8-K, date of earliest event
reported: March 31, 1993, File No. 1-4596).
4(b)(2) Amendment No. 1, dated August 6, 1993, to the
Credit Agreement, by and among the Company, Cello
Corp., Ameritone Paint Corporation, Zynolyte
Products Company, Chemical Bank New Jersey, N.A.,
Fleet Bank and PNC Bank, Kentucky, Inc. (Exhibit
4.1(b) to the Company's Current Report on Form
8-K, date of earliest event reported: August 3,
1994, File No. 1-4596).
7<PAGE>
Exhibit
Number Description
4(b)(3) Waiver, Consent and Amendment No. 2, dated August
3, 1994, to the Credit Agreement, by and among the
Company, Grow Group Insurance, Ltd., Cello Corp.,
Sinclair Acquisition Corp. (formerly known as
Ameritone Paint Corporation), Zynolyte Products
Company, Chemical Bank New Jersey, N.A., Fleet
Bank and PNC Bank, Kentucky, Inc. (Exhibit 4.1(c)
to the Company's Current Report on Form 8-K, date
of earliest event reported: August 3, 1994, File
No. 1-4596).
**+10(a)(1) Employment Agreement dated and effective as of
October 31, 1992 between the Company and Russell
Banks.
+10(a)(2) Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the
Company and John F. Gleason. (Exhibit 10(a)(2) to
the Company's Form 10-K Annual Report for the
fiscal year ended June 30, 1989, File No. 1-4596.)
+10(a)(3)(i) Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the
Company and Joseph M. Quinn. (Exhibit 10(a)(3) to
the Company's Form 10-K Annual Report for the
fiscal year ended June 30, 1989, File No. 1-4596.)
+10(a)(3)(ii) Amendment No. 1 effective as of July 1, 1991 to
Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the
Company and Joseph M. Quinn. (Exhibit
10(a)(3)(ii) to the Company's Form 10-K Annual
Report for the fiscal year ended June 30, 1992,
File No. 1-4596.)
+10(a)(4) Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the
Company and Lloyd Frank. (Exhibit 10(a)(5) to the
Company's Form 10-K Annual Report for the fiscal
year ended June 30, 1989, File No. 1-4596.)
8<PAGE>
Exhibit
Number Description
+10(a)(5) Employment Agreement effective as of September
15, 1988 between the Company and Frank V. Esser.
(Exhibit 10(a)(7) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1989, File No. 1-4596.)
+10(b)(1) Amended and Restated 1976 Stock Option Incentive
Plan. (Exhibit 10(b) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30,
1989, File No.
1-4596.)
+10(b)(2)(i) 1990 Stock Option Incentive Plan. (Exhibit 28 to
the Company's Form S-8 Registration Statement,
File No. 33-41274.)
*+10(b)(2)(ii) 1990 Stock Option Incentive Plan, as amended
through August 18, 1994, which amendments are
subject to shareholder approval.
+10(c)(1) Form of Amended and Restated Supplemental
Retirement and Death Benefit Agreement dated
effective as of September 15, 1988 between the
Company and each of Russell Banks, John F.
Gleason, Joseph M. Quinn and Lloyd Frank, together
with a schedule setting forth the material
details in which each such agreement differs from
the form filed herewith. (Exhibit 10(c) to the
Company's Form 10-K Annual Report for the fiscal
year ended June 30, 1989, File No. 1-4596.)
+10(c)(2) Supplemental Retirement and Death Benefits
Agreement dated as of January 12, 1990, between
the Company and Leslie Stott. (Exhibit 10(c)(2)
to the Company's Form 10-K Annual Report for the
fiscal year ended June
30, 1990, File No. 1-4596.)
+10(d) Amended and Restated Non-Employee Director Fee
Continuation Plan. (Exhibit 10(d) to the
Company's Form 10-K Annual Report for the fiscal
year ended June 30, 1989, File No. 1-4596.)
+10(e) Fee Continuation Agreement dated as of September
15, 1988, between the Company and Robert J.
Milano. (Exhibit 10(e)(ii) to the Company's Form
10-K Annual Report for the fiscal year ended June
30, 1992, File No. 1-4596.)
9<PAGE>
Exhibit
Number Description
+10(f) Grow Group, Inc. Management Incentive Compensation
Program. (Exhibit 10(i) to the Company's Form
10-K Annual Report for the fiscal year ended June
30, 1984, File No. 1-4596.)
10(g)(1) Stock Purchase Agreement dated July 21, 1992 by
and among the Company, Corimon C.A. S.A.C.A. and
Corimon Corporation. (Exhibit 10(j)(i) to the
Company's Current Report on Form 8-K dated July
27, 1992, File No. 1-4596.)
10(g)(2) Registration Rights Agreement dated August 7,
1992 by and between the Company and Corimon C.A.
S.A.C.A. (Exhibit 10(j)(ii) to the Company's
Current Report on Form 8-K dated August 12, 1992,
File No. 1-4596.)
10(g)(3) Standstill Agreement dated July 21, 1992 by and
among the Company, Corimon C.A. S.A.C.A. and
Corimon Corporation. (Exhibit 10(j)(iii) to the
Company's Current Report on Form 8-K dated July
27, 1992, File No. 1-4596.)
10(g)(4) Amendment dated May 24, 1993 to the Standstill
Agreement. (Exhibit 10(j)(iv) to the Company's
Current Report on Form 8-K dated May 24, 1993,
File No. 1-4596.)
*10(h) Coatings License Agreement dated as of March 24,
1993 by and between the Company and Montana, C.A.
*10(i) Coatings License Agreement dated as of April 21,
1993 by and between the Company and Montana, C.A.
*11 Computation of Earnings Per Share.
*22 Subsidiaries of Grow Group, Inc.
*23 Consent of Independent Auditors.
*27 Financial Data Schedule.
*28 Grow Group, Inc. Employee Stock Ownership and
Savings Plan Annual Report on Form 11-K for the
year ended June 29, 1994 and 1993.
____________________________
* Filed herewith.
** To be filed by amendment.
+ Management contract or compensatory plan or arrangement.
10<PAGE>
All exhibits, other than those filed herewith or to
be filed by amendment, are incorporated herein by reference
to the exhibit indicated in parenthetical references.
(b) Reports on Form 8-K
During the fourth quarter of the Company's fiscal year
ended June 30, 1994, the Company filed a Current Report on Form
8-K, date of earliest event reported: May 7, 1994, reporting
under Item 5, "Other Events." No financial statements were filed
with that Report.
UNDERTAKING
The Company hereby undertakes to furnish to the
Securities and Exchange Commission, upon request, all constituent
instruments defining the rights of holders of long-term debt of
the Company and its consolidated subsidiaries not filed herewith.
Such instruments have not been filed since none are, nor are
being, registered under Section 12 of the Securities and Exchange
Act of 1934 and the total amount of securities authorized under
any of such instruments does not exceed 10% of the total assets
of the Company and its subsidiaries on a consolidated basis.
11<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this Report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
GROW GROUP, INC.
Dated: December 21, 1994 By: /s/ Frank V. Esser
_____________________________________
Frank V. Esser, Treasurer and Chief
Financial Officer
12<PAGE>
File No. 1-4596
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
ANNUAL REPORT
ON
FORM 10-K
FOR THE YEAR ENDED JUNE 30, 1994
Under
THE SECURITIES EXCHANGE ACT OF 1934
_______________________________
GROW GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
EXHIBITS
___________________
12<PAGE>
Exhibit
Number Description
3(a)(1) Restated Certificate of Incorporation of the
Company filed with the New York Department of
State on October 18, 1965. (Exhibit 2.2 to the
Company's Form S-7 Registration Statement, File No.
2-57632.)
3(a)(2) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on August 12, 1966. (Exhibit 2.3
to the Company's Form S-7 Registration Statement, File
No. 2-57632.)
3(a)(3) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on August 19, 1968. (Exhibit 2.4
to the Company's Form S-7 Registration Statement, File
No. 2-57632.)
3(a)(4) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on November 20, 1968. (Exhibit 2.5
to the Company's Form S-7 Registration Statement, File
No. 2-57632.)
3(a)(5) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on August 18, 1969. (Exhibit 2.6
to the Company's Form S-7 Registration Statement, File
No. 2-57632.)
3(a)(6) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on February 1, 1972. (Exhibit 2.7
to the Company's Form S-7 Registration Statement, File
No. 2-57632.)
3(a)(7) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on May 14, 1973. (Exhibit 3(a)(7)
to the Company's Form 10-K Annual Report for the fiscal
year ended June 30, 1987, File No. 1-4596.)<PAGE>
Exhibit
Number Description
3(a)(8) Certificate of Merger of Grow Chemical Company into the
Company filed with the New York Department of State on
January 14, 1975. (Exhibit 3(a)(8) to the Company's
Form 10-K Annual Report for the fiscal year ended June
30, 1987, File No. 1-4596.)
3(a)(9) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on June 1, 1976. (Exhibit 3(a)(9)
to the Company's Form 10-K Annual Report for the fiscal
year ended June 30, 1987, File No. 1-4596.)
3(a)(10) Certificate of Merger of Midland Adhesive and Chemical
Corporation into the Company filed with the New York
Department of State on June 29, 1976. (Exhibit
3(a)(10) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1987, File No. 1-4596.)
3(a)(11) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on December 20, 1976. (Exhibit
2.10 to Amendment No. 2 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(12) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on January 17, 1977. (Exhibit 2.11
to Amendment No. 2 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(13) Certificate of Correction filed with the New York
Department of State on January 17, 1977. (Exhibit 2.12
to Amendment No. 2 to the Company's Form S-7
Registration Statement, File No. 2-57632.)
3(a)(14) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on November 2, 1977. (Exhibit
3(a)(14) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1987, File No. 1-4596.)<PAGE>
Exhibit
Number Description
3(a)(15) Certificate of Merger of Devoe & Raynolds Company,
Inc., Grow Chemical Sealants Corp., Harris Paint
Company and U.S. Paint, Lacquer & Chemical Company into
the Company filed with the New York Department of State
on June 26, 1978. (Exhibit 2.16 to the Company's Form
S-7 Registration Statement, File No. 2-67686.)
3(a)(16) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on April 20, 1979. (Exhibit
3(a)(16) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1988, File No. 1-4596.)
3(a)(17) Certificate of Amendment of Certificate of
Incorporation of the Company filed with the New York
Department of State on June 27, 1979. (Exhibit
3(a)(17) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1988, File No. 1-4596.)
3(a)(18) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on October 31, 1979. (Exhibit
3(a)(18) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1988, File No. 1-4596.)
3(a)(19) Certificate of Merger of Trewax Company into the
Company filed with the New York Department of State on
June 17, 1980. (Exhibit 4(a)(19) to the Company's Form
S-16 Registration Statement, File No. 2-72089.)
3(a)(20) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on June 25, 1980. (Exhibit
3(a)(20) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1990, File No. 1-4596.)
3(a)(21) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on February 6, 1986. (Exhibit
3(a)(21) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1986, File No. 1-4596.)<PAGE>
Exhibit
Number Description
3(a)(22) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State in October 1986. Exhibit 3(a)(22)
to Amendment No. 1 to the Company's Form 10-K Annual
Report for the fiscal year ended June 30, 1987, File
No. 1-4596.)
3(a)(23) Certificate of Amendment of the Certificate of
Incorporation of the Company filed with the New York
Department of State on November 9, 1987. (Exhibit 4 to
the Company's Form 10-Q Quarterly Report for the
quarter ended September 30, 1987, File No. 1-4596.)
3(b) By-Laws of the Company, as amended. (Exhibit 3.2 to
the Company's Current Report on Form 8-K, dated July
12, 1990, File No. 1-4596.)
4(a) Amended and Restated Rights Agreement, dated as of
August 7, 1992, between the Company and The Bank of New
York, as Rights Agent. (Exhibit 1.1 to Amendment No. 1
to the Company's Registration Statement on Form 8-A,
dated February 23, 1988, File No. 1-4596.)
4(b)(1) Credit Agreement (the "Credit Agreement"), dated as of
March 31, 1993, by and among the Company, Grow Group
Insurance, Ltd., Chemical Bank New Jersey, N.A., Fleet
Bank, PNC Bank, Kentucky, Inc. and Chemical Bank.
(Exhibit 4.1 to the Company's Current Report on Form
8-K, date of earliest event reported: March 31, 1993,
File No. 1-4596).
4(b)(2) Amendment No. 1, dated August 6, 1993, to the Credit
Agreement, by and among the Company, Cello Corp.,
Ameritone Paint Corporation, Zynolyte Products Company,
Chemical Bank New Jersey, N.A., Fleet Bank and PNC
Bank, Kentucky, Inc. (Exhibit 4.1(b) to the Company's
Current Report on Form 8-K, date of earliest event
reported: August 3, 1994, File No. 1-4596).<PAGE>
Exhibit
Number Description
4(b)(3) Waiver, Consent and Amendment No. 2, dated August 3,
1994, to the Credit Agreement, by and among the
Company, Grow Group Insurance, Ltd., Cello Corp.,
Sinclair Acquisition Corp. (formerly known as Ameritone
Paint Corporation), Zynolyte Products Company, Chemical
Bank New Jersey, N.A., Fleet Bank and PNC Bank,
Kentucky, Inc. (Exhibit 4.1(c) to the Company's Current
Report on Form 8-K, date of earliest event reported:
August 3, 1994, File No. 1-4596).
**+10(a)(1) Employment Agreement dated and effective as of October
31, 1992 between the Company and Russell Banks.
+10(a)(2) Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the Company
and John F. Gleason. (Exhibit 10(a)(2) to the
Company's Form 10-K Annual Report for the fiscal year
ended June 30, 1989, File No. 1-4596.)
+10(a)(3)(i) Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the Company
and Joseph M. Quinn. (Exhibit 10(a)(3) to the
Company's Form 10-K Annual Report for the fiscal year
ended June 30, 1989, File No. 1-4596.)
+10(a)(3)(ii) Amendment No. 1 effective as of July 1, 1991 to Amended
and Restated Employment Agreement dated effective as of
September 15, 1988 between the Company and Joseph M.
Quinn. (Exhibit 10(a)(3)(ii) to the Company's Form
10-K Annual Report for the fiscal year ended June 30,
1992, File No. 1-4596.)
+10(a)(4) Amended and Restated Employment Agreement dated
effective as of September 15, 1988 between the Company
and Lloyd Frank. (Exhibit 10(a)(5) to the Company's
Form 10-K Annual Report for the fiscal year ended June
30, 1989, File No. 1-4596.)<PAGE>
Exhibit
Number Description
+10(a)(5) Employment Agreement effective as of September 15,
1988 between the Company and Frank V. Esser. (Exhibit
10(a)(7) to the Company's Form 10-K Annual Report for
the fiscal year ended June 30, 1989, File No. 1-4596.)
+10(b)(1) Amended and Restated 1976 Stock Option Incentive Plan.
(Exhibit 10(b) to the Company's Form 10-K Annual Report
for the fiscal year ended June 30, 1989, File No.
1-4596.)
+10(b)(2)(i) 1990 Stock Option Incentive Plan. (Exhibit 28 to the
Company's Form S-8 Registration Statement, File No.
33-41274.)
*+10(b)(2)(ii) 1990 Stock Option Incentive Plan, as amended through
August 18, 1994, which amendments are subject to
shareholder approval.
+10(c)(1) Form of Amended and Restated Supplemental Retirement
and Death Benefit Agreement dated effective as of
September 15, 1988 between the Company and each of
Russell Banks, John F. Gleason, Joseph M. Quinn and
Lloyd Frank, together with a schedule setting forth the
material details in which each such agreement differs
from the form filed herewith. (Exhibit 10(c) to the
Company's Form 10-K Annual Report for the fiscal year
ended June 30, 1989, File No. 1-4596.)
+10(c)(2) Supplemental Retirement and Death Benefits Agreement
dated as of January 12, 1990, between the Company and
Leslie Stott. (Exhibit 10(c)(2) to the Company's Form
10-K Annual Report for the fiscal year ended June
30, 1990, File No. 1-4596.)
+10(d) Amended and Restated Non-Employee Director Fee
Continuation Plan. (Exhibit 10(d) to the Company's
Form 10-K Annual Report for the fiscal year ended June
30, 1989, File No. 1-4596.)
+10(e) Fee Continuation Agreement dated as of September 15,
1988, between the Company and Robert J. Milano.
(Exhibit 10(e)(ii) to the Company's Form 10-K Annual
Report for the fiscal year ended June 30, 1992, File
No. 1-4596.)<PAGE>
Exhibit
Number Description
+10(f) Grow Group, Inc. Management Incentive Compensation
Program. (Exhibit 10(i) to the Company's Form 10-K
Annual Report for the fiscal year ended June 30, 1984,
File No. 1-4596.)
10(g)(1) Stock Purchase Agreement dated July 21, 1992 by and
among the Company, Corimon C.A. S.A.C.A. and Corimon
Corporation. (Exhibit 10(j)(i) to the Company's
Current Report on Form 8-K dated July 27, 1992, File
No. 1-4596.)
10(g)(2) Registration Rights Agreement dated August 7, 1992 by
and between the Company and Corimon C.A. S.A.C.A.
(Exhibit 10(j)(ii) to the Company's Current Report on
Form 8-K dated August 12, 1992, File No. 1-4596.)
10(g)(3) Standstill Agreement dated July 21, 1992 by and among
the Company, Corimon C.A. S.A.C.A. and Corimon
Corporation. (Exhibit 10(j)(iii) to the Company's
Current Report on Form 8-K dated July 27, 1992, File
No. 1-4596.)
10(g)(4) Amendment dated May 24, 1993 to the Standstill
Agreement. (Exhibit 10(j)(iv) to the Company's Current
Report on Form 8-K dated May 24, 1993, File No.
1-4596.)
*10(h) Coatings License Agreement dated as of March 24, 1993
by and between the Company and Montana, C.A.
*10(i) Coatings License Agreement dated as of April 21, 1993
by and between the Company and Montana, C.A.
*11 Computation of Earnings Per Share.
*22 Subsidiaries of Grow Group, Inc.
*23 Consent of Independent Auditors.
*27 Financial Data Schedule.
*28 Grow Group, Inc. Employee Stock Ownership and Savings
Plan Annual Report on Form 11-K for the year ended June
29, 1994 and 1993.
____________________________
* Filed herewith.
** To be filed by amendment.
+ Management contract or compensatory plan or arrangement.<PAGE>
EXHIBIT 10(b)(2)(ii)
1990 Stock Option Incentive Plan<PAGE>
GROW GROUP, INC.
1990 STOCK OPTION INCENTIVE PLAN
(as amended through August 18, 1994)
1. Purposes of the Plan and Types of Options
(a) The purposes of this Stock Option Incentive Plan (the "Plan") of Grow
Group, Inc., a New York corporation (the "Corporation"), are (i) to make
available shares of the Common Stock, par value $.10 per share (the "Common
Stock"), of the Corporation for purchase on favorable terms by such key
employees (including officers) of the Corporation or its subsidiaries as the
Board of Directors of the Corporation (the"Board"), or a committee thereof
constituted for the purpose (the "Committee") may from time to time determine,
and thus to promote the interests of the Corporation by attracting and retaining
key employees of outstanding ability by enabling such personnel to participate
in the long-term growth and financial success of the Corporation, and (ii) to
attract and retain the services of experienced and knowledgeable non-employee
directors ("Outside Directors") of the Corporation for the benefit of the
Corporation and its shareholders and to provide an additional incentive for such
Outside Directors to continue to work for the best interests of the Corporation
and its shareholders through continuing ownership of its Common Stock.
(b) Stock options granted under the Plan may be of two types, incentive
stock options ("Incentive Stock Options") and non-qualified stock options. It is
intended that Incentive Stock Options granted under the Plan shall constitute
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986 as now in effect or as later amended (the "Code") and shall
be subject to the tax treatment described in Section 421 of the Code.
2. Stock Subject to the Plan
Subject to the provisions of Article 11, the total number of shares of
Common Stock which may be subject to options under the Plan shall not exceed
500,000, whether authorized but unissued shares, or shares which shall have been
purchased or acquired by the Corporation for this or any other purpose. Such
shares are from time to time to be allotted for option and sale to the
participants in accordance with the Plan. In the event any option granted under
the Plan shall expire or terminate for any reason without having been exercised
in full or shall cease for <PAGE>
any reason to be exercisable in whole or in part, the unpurchased shares subject
thereto shall again be available for the purposes of the Plan.
3. Administration of the Plan
(a) The Plan shall be administered by the Committee which shall be com-
posed of not less than three members of the Board. No one may be a member of
the Committee who is not a "disinterested person" within the meaning of the
regulations of the Securities and Exchange Commission. Outside Directors may be
members of the Committee. References hereinafter to determinations by the
Committee shall be deemed determinations by the Board of Directors.
(b) Subject to the provisions of Article 4 hereof respecting options
granted to Outside Directors, the Committee shall determine, within the limits
of the express provisions of the Plan, the individuals to whom, and the time or
times at which, options shall be granted, the number of shares to be subject to
each option, the duration of each option, the option price under each option,
the time or times within which (during the term of the option) all or portions
of each option may be exercised, whether to accelerate the time or times when
options may be exercised, the form of payment of the option exercise price,
whether to subject the exercise of all or any portion of an option to the
fulfillment of any contingencies (to be specified in the option agreement) and
to determine whether such contingencies have been met, the amount (if any)
necessary to satisfy the Corporation's obligation to withhold taxes or other
amounts in connection with the grant, exercise or disposition of an option or
disposition of the shares acquired pursuant to the exercise of an option, and,
with the consent of the optionee, whether to cancel or modify an option,
provided the option as modified would be permitted to be granted under the Plan
on the date of such modification.
(c) The Committee, in its sole discretion, shall determine whether and to
what extent options under the Plan shall be designated as Incentive Stock
Options.
(d) Subject to the express provisions of the Plan, the Committee may
interpret the Plan; correct any defect, supply any omission or reconcile any
inconsistency in the Plan; prescribe, amend and rescind rules and regulations
relating to the Plan; determine the terms and provisions of the respective
option agreements (which need not be identical); and make all other
determinations necessary or advisable for the administration of the Plan.
(e) In making its determinations, the Committee may take into account the
nature of the services rendered by such individuals, their present and potential
contributions to the Corporation's success and such other factors as the
Committee in its discretion shall deem relevant.
(f) Each individual to whom an option is granted shall enter into a
written agreement with the Corporation, dated the date the option is granted,
setting forth the terms and conditions of the option granted to him, which
agreement shall contain such terms and conditions, not inconsistent with the
Plan, as the Committee shall approve.
2<PAGE>
(g) The determination of the Committee on the matters referred to in this
Article 3 shall be conclusive.
4. Eligibility
(a) Subject to the provisions of paragraph (b) of this Article 4, options
may be granted only to persons who are key employees (which term shall be deemed
to include officers) of the Corporation or of any subsidiary corporation of the
Corporation within the meaning of Section 424(f) of the Code (such subsidiary
corporation being hereinafter called a "Subsidiary"). An employee who has been
granted an option or options at any time may be granted an additional option or
options at a later time or times if the Committee shall so determine.
(b) Each individual who becomes an Outside Director shall on the date of
his initial election to the Board of Directors be granted an option to purchase
10,000 shares of Common Stock at a price equal to 100% of the fair market value
of the Common Stock on such date determined in accordance with the provisions of
Article 5, but in no event at less than the book value of such shares determined
in accordance with the provisions of Article 5. No Outside Director to whom an
option has been granted shall be eligible to receive additional options under
this Plan and Outside Directors are not eligible for Incentive Stock Options.
Except as otherwise expressly provided herein, the options granted to Outside
Directors shall be subject to the same terms and conditions as options granted
to employees, except that clauses (a) through (c) of Article 9 and Article 12
shall not apply in any event.
(c) The aggregate fair market value (determined at the time the option is
granted) of the shares as to which Incentive Stock Options may be granted under
the Plan or any other plan of the Corporation (or any parent corporation or
subsidiary corporation within the meaning of Section 424(e) and (f) of the Code)
which are exercisable for the first time by such employee during any calendar
year shall not exceed $100,000. If an option granted under the Plan exceeds
such limitation, such option, to the extent of such excess, shall be a separate
non-qualified option.
(d) In addition, the maximum number of shares of Common Stock subject to
options that may be granted to any individual in any calendar year is 200,000.
5. Option Price
The price at which shares of the Common Stock may be purchased pursuant to
options granted under the Plan shall be not less than 100% of the fair market
value of the Common Stock on the date an option is granted. If an optionee owns
(or is deemed to own under applicable provisions of the Code and rules and
regulations promulgated thereunder) more than 10% of the combined voting power
of all classes of the stock of the Corporation (or any parent or subsidiary
corporation within the meaning of Section 424(e) or (f) of the Code) and an
option granted to such optionee is intended to qualify as an Incentive Stock
Option, the option price shall be no less than 110% of the fair market value of
the Common Stock on the date the option is granted. The fair market value of
the Common Stock on any day shall be the mean between the highest and the lowest
quoted selling prices of the Common Stock on such day as reported by the New
3<PAGE>
York Stock Exchange. If no sale shall have been made on that day, or if the
Common Stock is not listed on the New York Stock Exchange at that time, fair
market value will be determined by the Committee. However, with respect to
Incentive Stock Options, fair market value may be computed in any manner
required or permitted by the Code and the regulations promulgated thereunder.
The date on which the Committee approves the granting of an option shall be
considered the date on which such option is granted. Notwithstanding the
foregoing, no option may be granted at an option price that is less than the
book value per share of the Common Stock as determined from the balance sheet of
the Corporation as of the end of the quarter immediately preceding the date of
grant (unaudited for the first three quarters of the fiscal year and audited for
the last quarter).
6. Term of Each Option
The term of each option, other than an option granted to an Outside
Director, shall be for such period as the Committee shall determine, but not
more than ten years and one month from the date of the granting thereof, or such
shorter period as is prescribed in Articles 9 and 12 hereof, provided that an
option intended to qualify as an Incentive Stock Option shall have a term of not
more than ten years, and further provided that if an optionee owns (or is deemed
to own under applicable provisions of the Code and rules and regulations
promulgated thereunder) more than 10% of the combined voting power of all
classes of the stock of the Corporation (or any parent or subsidiary corporation
within the meaning of Section 424(e) and (f) of the Code) and an option granted
to such optionee is intended to qualify as an Incentive Stock Option, the term
of such option shall be no more than five years. The term of each option
granted to an Outside Director shall be ten years, or such shorter period as is
prescribed in Article 9 hereof.
7. Exercise of Options
(a) An option shall become exercisable on such terms and at such times as
the Committee shall determine; provided, however, subject to the provisions of
Articles 9 and 10, options granted to Outside Directors shall become exercisable
in each of the six years commencing two years after the date of grant of the
option to the extent of one-sixth of the number of shares originally subject to
the option. An option holder purchasing less than the number of shares
available to him in any year under the option may purchase any such unpurchased
shares in any subsequent year of the option term. The option shall not be
exercisable at any time in an amount less than 100 shares (or the remaining
shares then covered by and purchasable under the option if less than 100
shares). The option may not be exercised in respect of a fraction of a share.
(b) The purchase price of the shares as to which an option shall be
exercised shall be paid in full at the time of exercise by one or more of the
following methods, as determined by the Committee: (i) in cash or by certified
check, (ii) by transferring to the Corporation previously acquired shares of the
Common Stock having an aggregate fair market value equal to the aggregate option
exercise price of all options being exercised and/or (iii) by transferring to
the Corporation previously acquired shares of the Common Stock having an
aggregate fair market value less than the aggregate option exercise price of all
4<PAGE>
options being exercised and cash or certified check for the balance of the
aggregate option exercise price of all options being exercised. The fair market
value of the shares so transferred to the Corporation shall be determined in
accordance with the methods described in Article 5, but as of the date of
exercise of the option. In addition, the Corporation may withhold cash and/or
shares of Common Stock or require the optionee to pay to the Corporation, in
cash or by certified check, promptly upon demand, the amount which the Committee
determines is necessary to satisfy its obligation to withhold Federal, state and
local income taxes and other amounts. The Corporation shall not be required to
deliver certificates for such shares until such payments have been made.
8. Non-Transferability of Options
Except as provided in Article 9, no option may be exercised at any time
unless the holder thereof is then an employee of the Corporation or of a
Subsidiary, an Outside Director or a Director Emeritus (as that term is defined
in paragraph (g) of Article 9), as the case may be. No option granted under the
Plan shall be transferable otherwise than by will or by the laws of descent and
distribution, and an option may be exercised, during the lifetime of the holder
thereof, only by him or by his guardian or legal representative.
9. Termination of Employment or Service on the Board of Directors
(a) In the event that the employment of an employee to whom an option has
been granted under the Plan shall be terminated (otherwise than by reason of
death, disability or retirement), such option may, subject to the provisions of
Article 12 hereof, be exercised (to the extent that the employee was entitled to
do so at the termination of his employment) at any time within three months
after such termination but not thereafter, and in no event after the date on
which, except for such termination of employment, the option would otherwise
expire.
(b) In the event that the employment of an employee to whom an option has
been granted under the Plan shall be terminated by disability or retirement (as
those terms are defined in paragraph (g) of this Article 9), the remaining
unexercised portion of the option may be exercised by the employee
(notwithstanding that the option had not yet become exercisable with respect to
all or part of such shares at the date of termination) at any time within twelve
months after such termination but not thereafter (except that an optionee
holding an Incentive Stock Option cannot exercise such option more than three
months after termination of his employment unless he was disabled within the
meaning of Section 22(e)(3) of the Code), and in no event after the date on
which, except for such termination of employment, the option would otherwise
expire.
(c) If an employee to whom an option has been granted under the Plan shall
die while he is employed by the Corporation or a Subsidiary or during the period
following termination of employment in which the employee had a right to
exercise the option under paragraph (a) or (b) of this Article 9, such option
may be exercised (i) in the case of death while employed, as to all or any part
of the remaining unexercised portion of the option, notwithstanding that the
option had not yet become exercisable with respect to all or a part of such
5<PAGE>
shares at the date of death, or (ii) in the case of death after termination of
employment, to the extent that the employee was entitled to do so at the date of
his death giving effect to the provisions of paragraphs (a) and (b) of this
Article 9, in either case by a legatee or legatees of such option under the
employee's last will, or by his personal representatives or distributees, at any
time within such period, not exceeding twelve months after his death, as shall
be prescribed in the option agreement, but in no event after the date on which,
except for such death, the option would otherwise expire.
(d) In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve on the Board of Directors, otherwise
than by reason of death or disability (as that term is defined in paragraph (g)
of this Article 9), without being designated as a Director Emeritus (as that
term is defined in paragraph (g) of this Article 9), or if a Director Emeritus
shall cease to retain such status (otherwise than by reason of death or
disability), such option may be exercised (to the extent that the Outside
Director or the Director Emeritus was entitled to do so at the time of cessation
of service or termination of status) at any time within three months after such
cessation of service or termination of status but not thereafter, and in no
event after the date on which, except for such cessation of service or
termination of status, the option would otherwise expire. Except as hereinabove
provided, in the event an Outside Director to whom an option has been granted
under the Plan shall cease to serve on the Board of Directors but shall have
been designated as a Director Emeritus, his option shall continue to be
exercisable as though such Director Emeritus continued to serve as an Outside
Director.
(e) In the event that an Outside Director to whom an option has been
granted under the Plan shall cease to serve on the Board of Directors by reason
of disability or he shall become disabled (as such terms are defined in
paragraph (g) of this Article 9) while holding the status of Director Emeritus,
the remaining unexercised portion of the option may be exercised by the Outside
Director or Director Emeritus (notwithstanding that the option had not yet
become exercisable with respect to all or part of such shares at the date of
disability) at any time within twelve months after such disability but not
thereafter, and in no event after the date on which, except for such disability,
the option would otherwise expire.
(f) If an Outside Director to whom an option has been granted under the
Plan shall die (i) when he is serving on the Board of Directors or while holding
the status of Director Emeritus, or (ii) within three months after cessation of
service on the Board of Directors without the status of Director Emeritus or
after termination of Director Emeritus status, or (iii) within twelve months
after cessation of service on the Board of Directors or after termination of
Director Emeritus status by reason of disability, such option may be exercised
(x) in the case of death while serving on the Board of Directors or while
holding the status of Director Emeritus, as to all or any part of the remaining
unexercised portion of the option, notwithstanding that the option had not yet
become exercisable with respect to all or part of such shares at the date of
death, or (y) in the case of death after cessation of service on the Board of
Directors without the status of Director Emeritus or after termination of
Director Emeritus status or death after termination of such service or status by
6<PAGE>
reason of disability, to the extent that the Outside Director or Director
Emeritus was entitled to do so at the date of his death giving effect to the
provisions of paragraphs (d) and (e) of this Article 9, in each case by a
legatee or legatees of such option under the Outside Director's or Director
Emeritus' last will, or by his personal representatives or distributees, at any
time within twelve months after his death, but in no event after the date on
which, except for such death, the option would otherwise expire.
(g) For the purpose of this Article 9, "retirement" shall mean retirement
no earlier than the normal retirement age pursuant to any pension or retirement
plan of the Corporation or a Subsidiary; "disability" or "disabled" shall mean
permanent mental or physical disability as determined by the Committee subject
to the requirements of Section 22(e)(3) of the Code; and "Director Emeritus"
shall mean an honorary title granted by majority vote of the members of the
Board of Directors then serving.
(h) Options granted under the Plan to employees shall not be affected by
any change of employment so long as the holder continues to be an employee of
the Corporation or a Subsidiary. Nothing in the Plan or in any option granted
under the Plan shall confer on any individual any right to continue in the
employ of the Corporation or a Subsidiary or limit or restrict in any way the
right of the Corporation or any Subsidiary to terminate his employment at any
time for any reason whatsoever.
10. Change in Control
(a) Notwithstanding anything in the Plan to the contrary, upon a Change in
Control of the Corporation, all outstanding options granted under the Plan shall
become immediately exercisable.
(b) For purposes of this Section, a Change in Control of the Corporation,
shall be deemed to have occurred if:
7<PAGE>
(i) any "person", as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (other than the
Corporation, any trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any Corporation owned, directly or
indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 30% or more of the
combined voting power of the Corporation's then outstanding securities;
(ii) during any period of two consecutive years (not including any period
prior to the execution of this amendment to the Plan), individuals who at the
beginning of such period constitute the Board of Directors of the Corporation
(the "Board"), and any new director (other than a director designated by a
person who has entered into an agreement with the Corporation to effect a
transaction described in clause (i), (iii) or (iv) of this Section) whose
election by the Board or nomination for election by the Corporation'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 at least a majority thereof;
(iii) the stockholders of the Corporation approve a merger or consolidation
of the Corporation with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the sur-
viving entity) more than 70% of the combined voting power of the voting secu-
rities of the Corporation or such surviving entity outstanding immediately after
such merger or consolidation or (B) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no "person" (as hereinabove defined) acquires more than 50% of the com-
bined voting power of the Corporation's then outstanding securities; or
(iv) the stockholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or disposition by
the Corporation of all or substantially all of the Corporation's assets.
8<PAGE>
11. Adjustment of and Changes in Common Stock
Notwithstanding any other provisions of the Plan, in the event of a change
in the Common Stock by reason of any stock dividend, stock split-up, stock
combination, exchange of shares, recapitalization, merger, consolidation,
acquisition of property or stock, separation, reorganization or liquidation and
the like, the aggregate number and kind of shares available under the Plan and
the aggregate number and kind of shares subject to each outstanding option and
the exercise price thereof shall be appropriately adjusted by the Board of
Directors or the Committee, whose determination shall be conclusive.
12. Employee's Agreement to Serve.
Each Employee receiving an option, shall as one of the conditions of
receiving such option, and as an inducement to the Corporation to grant such
option to him, agree that he will remain in the employ of the Corporation, or a
Subsidiary, for a period of at least two years from the date the option is
granted to him, and that he will, during such employment, serve the Corporation
or such Subsidiary in good faith and use his best efforts at all times to
promote its interests. Except as otherwise provided in a written agreement
between the Corporation or such Subsidiary and such employee, such employment
shall be at the pleasure of the Corporation or such Subsidiary and shall be at
such rate of base compensation as the Corporation or such Subsidiary shall
determine from time to time. If, during such two-year period, the employee's
employment shall be terminated by the Corporation (otherwise than a termination
after a change in control of the Corporation as defined in Article 9) or he
shall terminate his employment, otherwise than by death, disability, retirement
(as these terms are defined in Article 9) or with the consent or approval of the
Corporation or such Subsidiary, or shall otherwise violate the provisions of the
agreement referred to in this Article 12, the option or options then held by him
shall forthwith terminate. The provisions of this Article 12 shall be
incorporated in the option agreement to be executed and delivered by the
Corporation and the individual to whom an option is to be granted.
13. Compliance with Securities Laws
The Committee may, in their discretion, require as a condition to the
exercise of any option that the shares reserved for issue upon the exercise of
the option shall have been duly listed, upon official notice of issuance, by the
New York Stock Exchange or by such other securities exchange upon which such
9<PAGE>
shares are then listed, and either that (a) a Registration Statement under the
Securities Act of 1933, as amended, or any succeeding act (the "Securities
Act"), with respect to such shares is effective and current at the time of such
exercise or (b) there is an exemption from registration under such Act for the
issuance of shares of Common Stock upon such exercise. Nothing herein shall be
construed as requiring the Corporation to register shares subject to any option
under the Securities Act.
In addition, if at any time the Committee shall determine in its discretion
that the listing or qualification of the shares of Common Stock subject to such
option on any securities exchange or under any applicable law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition to, or in connection with, the granting of an option or the issue of
shares of Common Stock thereunder, such option may not be exercised in whole or
in part unless such listing, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
14. Amendment and Termination
The Board of Directors may amend, suspend or terminate the Plan or any por-
tion thereof at any time but may not without the approval of the Corporation's
shareholders make any alteration or amendment thereof which (a) makes any change
in the class of eligible participants as described in Article 4 hereof; (b)
increases the total number of shares of Common Stock for which options may be
granted under the Plan except as provided in Article 11 hereof; (c) extends the
term of the Plan or the maximum option period provided under the Plan; (d)
decreases the minimum option price provided in Article 5 hereof or (e)
materially increases the benefits accruing to participants under the Plan. In
addition, no provision of the Plan relating to the amount or exercise price of
shares of Common Stock subject to options to be granted under the Plan to
Outside Directors or the timing of grants may be amended more than once every
six months other than to comport with changes in the Code, the Employee
Retirement Income Security Act of 1974, as amended, or the rules and regulations
under either statute (including successor statutes and rules and regulations
thereunder).
10<PAGE>
Notwithstanding the foregoing, the Board of Directors is expressly
authorized to further amend the Plan or any portion thereof and/or to amend or
direct the Committee to amend the terms of any option granted under the Plan in
order to qualify any previously granted option and/or any subsequently granted
option as an Incentive Stock Option under Section 422 of the Code.
15. Duties of the Corporation
The Corporation shall at all times during the term of each option reserve
and keep available for issuance or delivery such number of shares of Common
Stock as will be sufficient to satisfy the requirements of all options at the
time outstanding, shall pay all original issue taxes or transfer taxes with
respect to the issuance or delivery of shares pursuant to the exercise of such
options and all other fees and expenses necessarily incurred by the Corporation
in connection therewith, except for required Federal income tax or other
withholding amount.
16. Termination of Plan
The Plan shall terminate on June 30, 2000. No options may be granted under
the Plan after the termination date, although options outstanding on such date
shall not be affected by such termination.
17. Effective Date of Plan and Amendment
The Plan is subject to approval at the 1990 Annual Meeting of Shareholders
of the Corporation by the vote of the holders of a majority of the shares of
capital stock of the Corporation entitled to vote at such meeting. If approved,
the Plan shall be effective as of August 23, 1990, the date of its adoption by
the Board of Directors. Any other provision of the Plan to the contrary
notwithstanding, no options granted under the Plan may be exercised until after
such shareholder approval, and if such approval is not obtained, such options
shall be null and void.
The Amendments to the Plan approved by the Board on August 18, 1994 (the
"Amendments"), are subject to approval by shareholders. If the Amendments are
not approved by the shareholders by August 17, 1995, the Amendments shall
terminate and the Plan, as it existed immediately before such Amendments, shall
continue in full force and effect.
11<PAGE>
EXHIBIT 10(h)
COATINGS LICENSE AGREEMENT
dated
as of March 24, 1993
Between the Company and Montana, C.A.<PAGE>
COATINGS LICENSE AGREEMENT
THIS AGREEMENT made, as of the 24th day of March, 1993, by and between
Grow Group, Inc. (on behalf of its Devoe & Raynolds Co. division), a corporation
organized and existing under the laws of the State of New York, U.S.A., having
an office at 4000 Dupont Circle, Louisville, Kentucky 40207 (hereinafter
referred to as "Licensor"), and MONTANA, C.A., a corporation organized and
existing under the laws of the Republic of Venezuela, having an office at Calle
Hans Neumann, Los Cortijos De Lourdes, Edificio Corimon, Caracas 1060, Venezuela
(hereinafter referred to as "Licensee").
WITNESSETH:
WHEREAS, Licensor possesses certain valuable formulas, trade
secrets, know-how, technological information and data, laboratory
research, product information and technical knowledge relating to
the formulation and manufacture of certain architectural paint
products (hereinafter, with the exception of all Hydro-Shur
coatings, referred to as the "D & R Coatings"); and
WHEREAS, Licensor desires to enter into a licensing
agreement with a manufacturing and marketing entity to facilitate
the manufacture, sale and distribution of the D & R Coatings in
the Republic of Venezuela (hereinafter referred to as the
"Territory") using formulae, technology and know-how of Licensor;
and
WHEREAS, Licensee currently manufactures a line of
architectural coatings which it believes can be improved through
its utilization of the Technical Information (as hereinafter
defined) (such architectural coatings of Licensee whether
improved or not and the D & R Coatings are hereinafter referred
to collectively as the "Coatings"); and
WHEREAS, Licensee also desires to obtain a license to
manufacture, sell and distribute the D & R Coatings in the
Territory on the terms and subject to the conditions set forth
herein;
NOW, THEREFORE, for and in consideration of the foregoing
and of the mutual promises and covenants contained herein and
other good and valuable consideration, the parties hereto hereby
agree as follows:<PAGE>
SECTION 1
DEFINITIONS
1.1 The term "Technical Information" shall mean all information
in use by Licensor in its manufacture, use and sale of D & R
Coatings which have been fully tested, proven and marketed by
Licensor, as further defined under Section 3.
1.2 The term "Licensed Trademarks" shall mean those trademarks
listed in Appendix A as well as additional trademarks which may
from time to time be added to Appendix A by the parties hereto
pursuant to mutual agreement in writing.
1.3 The term "Net Sales" shall mean gross sales to the trade
less returns, any product shipping costs included in gross sales,
any turnover tax absorbed by Licensee, general price discounts,
and discounts for prompt payment which are actually given by
Licensee to its customers.
1.4 The term "Contract Year" shall mean each successive period
of 365 calendar days (366 days in the case of leap years) during
the term of this Agreement, commencing with the Effective Date.
1.5 The term "Effective Date" shall mean the date that this
Agreement is registered with the Venezuelan Superintendency of
Foreign Investment (SIEX).
SECTION 2
LICENSE, MANUFACTURE, PACKAGING AND SALE
2.1 Licensor hereby grants to Licensee, during the term of this
Agreement, *** license to utilize the Technical
Information to manufacture the Coatings, in the plants of
Licensee, within the Territory.
2.2 Licensor further grants to Licensee a *** license to
use and sell the Coatings.
2.3 Licensee acknowledges that the favorable reputation and
goodwill associated with the D & R Coatings are dependent for
preservation thereof upon the proper manufacture of the D & R
Coatings and upon the maintenance of the standard quality of the
D & R Coatings. Licensee shall at all times manufacture the D &
R Coatings only in accordance with Technical Information
furnished by Licensor to Licensee pursuant to Section 3, and will
maintain quality control standards specified by Licensor.
***confidential - intentionally omitted and filed separately with
the Securities and Exchange Commission (the "SEC").
2<PAGE>
2.4 Licensee further agrees to manufacture and sell the Coatings
in compliance with all applicable laws and regulations of any
legally constituted public authority, and to notify Licensor
immediately should it learn that Technical Information furnished
by Licensor to Licensee is in violation of such laws and
regulations. Licensee agrees to indemnify and hold harmless
Licensor and to assume responsibility for any penalty imposed
upon it or upon Licensor by any legally constituted public
authority arising in any manner out of or in connection with any
act or omission of Licensee hereunder causing non-compliance with
such laws and regulations.
2.5 Licensee agrees to use its best efforts to develop and
increase sales of the Coatings through the use of the Technical
Information made available hereunder.
SECTION 3
TECHNICAL INFORMATION
3.1 Licensor shall furnish to Licensee, in the manner
hereinafter specified, all Technical Information pertaining to
the D & R Coatings which Licensor presently has, develops or
hereafter acquires with the right of free transmittal during the
term of this Agreement; provided, however, that Licensee agrees
that Licensor has no obligation to furnish technical information
to Licensee which Licensor secures by way of merger and/or
acquisition.
3.2 In carrying out the provisions of Subsection 3.1, Licensor
will:
(a) Furnish to Licensee for its use hereunder
identification of raw material sources, raw material
specifications (if any), control tests (if any) for purchased raw
materials, details of manufacturing operations (including process
engineering), formulae and testing procedures for intermediate
and finished products, application techniques, details of design
and use of equipment utilized in manufacturing operations of
Licensor (or, in lieu thereof, source and identification of
purchased equipment) and other technical information in the
possession of Licensor necessary for the manufacture, use and
sale of the D & R Coatings. It is intended by and between the
parties that the major portion of the Technical Information to be
provided by Licensor to Licensee under this Agreement will be
furnished in the manner set forth in this Subsection 3.2.
3<PAGE>
(b) At the request of Licensee, receive at reasonable times
Licensee's personnel designated by Licensee, for training in
appropriate facilities of Licensor, as designated by Licensor,
for periods not to exceed in total 20 man days during the first
Contract Year of this Agreement and, thereafter, 10 man days
during each subsequent Contract Year of this Agreement. Licensee
agrees to pay all costs and expenses incurred by its personnel
under this Subsection, including, but not limited to, salary,
travel and living expenses. Licensee shall hold harmless
Licensor from any and all injury, loss, or damage to the person
or property of Licensor or its employees, Licensee's personnel or
third parties occasioned by any act or neglect on the part of the
said personnel of Licensee, shall defend at its cost any and all
actions arising therefrom, and shall pay promptly all attorneys'
fees and judgments resulting therefrom.
(c) Assist Licensee through correspondence regarding the
Coatings.
(d) If, in addition, Licensee so requests, Licensor agrees
to provide to Licensee, at reasonable times, outside the United
States, royalty free and incidental to the technical assistance
and Technical Information furnished in or from the United States,
the services of Licensor's personnel skilled in the D & R
Coatings. Licensee agrees to pay to Licensor $300.00 per man day
for each day (including travel time) said personnel are away from
their home location, plus the travel and reasonable living
expenses of said personnel during such periods.
3.3 Licensee agrees to furnish to Licensor, for Licensor's and
its affiliates use during the term of this Agreement and
thereafter, and with the right of free transmittal, all technical
information relative to the Coatings which Licensee develops or
acquires during the term of this Agreement and which constitutes
a modification of or improvement upon the Technical Information
furnished by Licensor to Licensee hereunder. Licensee shall
furnish such technical information to Licensor in the same
general manner and under the same conditions as Licensor
furnishes Technical Information to Licensee under Subsections 3.1
and 3.2 (a) and (c) hereof.
3.4 In carrying out the provisions of Subsection 3.3, Licensee
agrees to receive at reasonable times, upon written request by
Licensor, up to two personnel of Licensor in the facilities of
Licensee for a total of up to 10 man days in each Contract Year
during the term hereof, and to give such personnel access to the
business operations of Licensee with respect to the Coatings as
regards Licensee's use of the Technical Information and
modifications thereof or improvements thereto by Licensee.
4<PAGE>
Licensor agrees to pay all costs and expenses incurred by its
personnel under this Subsection 3.4, including, but not limited
to, salary, travel and living expenses. Licensor shall hold
harmless Licensee from any and all injury, loss or damage to the
person or property of Licensee or its employees, Licensor's
personnel, or third parties occasioned by any act or neglect on
the part of the said personnel of Licensor, shall defend at its
cost any and all actions arising therefrom, and shall pay
promptly all attorneys' fees and judgments resulting therefrom.
3.5 Licensee hereby grants to Licensor and its affiliates, the
non-exclusive, royalty-free right to employ, and to authorize
others licensed by Licensor in connection with the D & R Coatings
to employ, the technical information furnished by Licensee to
Licensor under this Agreement. Licensor agrees, when licensing
others for the D & R Coatings, to use its best efforts to
establish under similar arrangements with other parties,
reciprocal rights for the benefit of Licensee in the Territory
respecting technical information furnished by such other parties
to Licensor. The grants made in this Subsection shall survive
the expiration or termination of this Agreement and shall
continue following such expiration or termination, non-exclusive,
royalty free and without geographic limitation.
3.6 Licensee agrees to take no action with respect to the
Technical Information furnished to it by Licensor under this
Agreement or the Coatings produced employing the same which would
be illegal under U.S. laws or regulations relating to the export
of technical data, as communicated to it from time to time by
Licensor. Licensee agrees to indemnify and hold harmless
Licensor and to assume responsibility for any penalty imposed
upon it or upon Licensor by any legally constituted public
authority arising in any manner out of or in connection with any
act or omission of Licensee hereunder causing non-compliance with
such laws and regulations.
SECTION 4
TRADEMARKS
4.1 Licensor hereby grants to Licensee, during the term of this
Agreement, a *** license under Licensor's rights under
the common law or by registration to use the Licensed Trademarks
on and in connection with its sale of the D & R Coatings in the
Territory provided that the D & R Coatings meet Licensor's then
current standards and requirements as more fully set forth
herein.
***confidential - intentionally omitted and filed separately with
the Securities and Exchange Commission (the "SEC").
5<PAGE>
4.2 Licensee recognizes that the favorable reputation and
goodwill associated with the Licensed Trademarks are dependent
for their preservation upon the proper use of the Licensed
Trademarks, upon the proper manufacture of the D & R Coatings,
and upon the maintenance of the standard quality of the D & R
Coatings produced by Licensee hereunder. Licensee thus agrees
that it will not use, or knowingly consent to the use of, any
Licensed Trademark (including, without limitation, on any label
or product literature) except in accordance with the standards
and requirements which from time to time are furnished by
Licensor. Licensor reserves the right to modify such standards
and requirements at any time. Licensee agrees, upon request by
Licensor, to promptly deliver to Licensor samples of the D & R
Coatings and all labels and other items to which it applies the
Licensed Trademarks.
4.3 Notwithstanding the rights granted in Subsection 4.1 above,
Licensee need not use the Licensed Trademarks and Licensor's
product names and numbers on D & R Coatings manufactured and sold
by Licensee under this Agreement.
4.4 During the term of this Agreement and thereafter, Licensee
will not use, or knowingly consent to the use of, any trademark,
tradename or commercial name, on or in connection with the
Coatings or other products of Licensee, which trademark,
tradename or commercial name is similar in sound, appearance or
meaning to any Licensed Trademark or any other trademark,
tradename or commercial name employed by Licensor or other
companies affiliated with Licensor.
4.5 Licensee acknowledges that the Licensed Trademarks are the
exclusive property of Licensor. Licensee agrees to take all
actions requested by Licensor, at the expense of Licensor, to
assist Licensor in maintaining the Licensed Trademarks and the
ownership thereof by Licensor.
4.6 Licensee shall include or cause to be included, by means of
imprint, lithography or label, the legend "Manufactured under
license from Devoe & Raynolds Co., Division of Grow Group, Inc."
on all containers of the D & R Coatings which are manufactured by
Licensee under this Agreement and which utilize the Licensed
Trademarks.
6<PAGE>
SECTION 5
PAYMENT
5.1 Licensee will pay to Licensor, as an initial fee for the
Technical Information licensed hereunder and furnished in or from
the United States, simultaneously with the execution of this
Agreement, the sum of *** dollars in United States
currency, no part of which sum shall be refundable in any event.
5.2 In addition to the *** dollar payment specified in
Subsection 5.1 above, Licensee shall pay to Licensor during the
term of this Agreement a running royalty for the Technical
Information licensed hereunder and furnished in or from the
United States of *** Licensee's Net Sales of the
Coatings manufactured by Licensee, for sale to third parties,
regardless of the end uses for which the Coatings are sold, where
sold, or the trademark, if any, under which sold. Licensee shall
also pay to Licensor during the term of this Agreement a running
royalty for the Technical Information licensed hereunder and
furnished in or from the United States of ***
of the Net Sales value of all Coatings manufactured by Licensee
for its and its affiliates internal use (such Coatings shall, for
royalty purposes hereunder, have a Net Sales value equal to the
Net Sales price of similar or identical Coatings sold to
unrelated parties).
5.3 Under this Agreement, a royalty shall be due when the
Coating produced by Licensee is used or is sold (as determined at
the time when it is billed, or if not billed, when it is shipped
or otherwise delivered). Coatings which are scrapped, so as not
to be used for their normal or intended purpose, or which are
used in mere routine testing, are not subject to royalty.
Royalties paid hereunder on Coatings returned by the customer,
for which full credit is allowed, shall be credited on future
royalty payments hereunder, but shall not be otherwise
recoverable.
5.4 For the first Contract Year only, Licensee shall pay running
royalties to Licensor only, if, and to the extent that they
exceed *** dollars in United States currency.
***confidential - intentionally omitted and filed separately with
the Securities and Exchange Commission (the "SEC").
7<PAGE>
If the running royalties to be paid by Licensee to Licensor for
any subsequent Contract Year do not equal a minimum of ***
dollars in United States currency, Licensee shall pay to Licensor
with its royalties payable for the last three-month period of
each such Contract Year a sum sufficient to bring the total of
all royalty payments for such Contract Year to the aforesaid
minimum amount.
5.5 Within 45 days after the end of each consecutive three-month
period of each Contract Year, Licensee shall furnish to Licensor,
signed and sworn to by an officer of Licensee, a royalty report
stating for all constituents of the Coatings subject to royalty
payment hereunder, the gross sales and Net Sales, in local
currency, of each said Coating sold or used by Licensee during
such period. Each royalty report shall be accompanied by the
royalty payment due for such period in United States currency,
converted from local currency at the most favorable exchange rate
to Licensor prevailing in major Venezuelan banks on the last day
of the period to which such payment relates. Licensor shall have
the right, but not the obligation, to accept Venezuelan currency,
in lieu of United States currency, should the royalty payment by
Licensee to Licensor be prevented indefinitely or delayed more
than six months by exchange control regulations of said
government.
5.6 Licensee shall keep complete records of all of its use of
and sales of the Coatings. Licensor shall have access to
Licensee's books, records, and accounts at all reasonable times
during the term of this Agreement and for a period of 180 days
after the expiration or termination of this Agreement for the
purpose of auditing and otherwise assuring compliance with the
terms of this Agreement. Licensee shall, at the request of
Licensor, obtain from the independent auditor which regularly
audits the books of Licensee, said auditor's statement certifying
the accuracy of the royalty reports to be provided hereunder, for
a period of up to two years preceding each such request.
5.7 All payments to be made by Licensee to Licensor hereunder
shall be disbursed without any deduction for taxes or similar
levies imposed by any legally constituted public authority in the
Territory or elsewhere, except to the extent that Licensor is
able to and does obtain a credit against its taxes in the United
States for such deductions. Licensee will obtain and provide
Licensor on a timely basis with the original tax receipt and any
other documentation necessary for Licensor to obtain credit
against its taxes in the United States for any deduction made
from any payment hereunder.
***confidential - intentionally omitted and filed separately with
the Securities and Exchange Commission (the "SEC").
8<PAGE>
5.8 Upon expiration or termination of this Agreement for any
reason, the royalty report and corresponding payment covering the
terminal period hereunder shall also include the Coatings
produced by Licensee under this Agreement but not used or sold as
of said termination, using as a Net Sales price for royalty
calculations the average Net Sales price for each of the Coatings
sold by Licensee during the 12 months immediately preceding such
expiration or termination.
5.9 Any payment not made by Licensee to Licensor when due
hereunder shall bear interest, until paid, from a date 10 days
after Licensee's payment is due, at a rate equal to the prime
rate charged by Chemical Bank, New York, New York, on the date
such payment is due, plus three percentage points.
SECTION 6
CONFIDENTIALITY
Licensee agrees both a) during the term of this Agreement
(including any extensions) and b) during an additional period of
time equal to the initial term of this Agreement (10 years) plus
any extension periods (if any) thereof (5 years per extension),
even if this Agreement is terminated prior to the end of the
initial or any extended term, to maintain in confidence 1) all
Technical Information furnished to it under this Agreement, 2)
the terms of this Agreement except to the extent disclosure to
Licensee's attorneys, accountants and other professional advisors
is necessary and 3) all technical information relative to the
Coatings which Licensee develops or acquires during the term of
this Agreement and which constitutes a modification of or
improvement upon the Technical Information relative to the D & R
Coatings furnished by Licensor to Licensee hereunder. Licensee
further agrees to obligate all personnel of Licensee to adhere to
the obligation of confidentiality to the extent that the
Technical Information was not known to and was not the property
of Licensee as evidenced by Licensee's written records at the
time of receipt, or is not lawfully obtained from some other
source having an unrestricted right of use and a legal right of
disclosure. The obligation of confidentiality under this Section
6 shall not apply to technical information which is or becomes
public knowledge through no fault of Licensee. The provisions of
this Section 6 shall survive the expiration or termination of
this Agreement.
9<PAGE>
SECTION 7
INDEMNITY
7.1 In the mutual interest of eliminating to the maximum extent
possible the risk of incurring complaints concerning the
performance of the D & R Coatings, the parties hereto acknowledge
the importance of Licensee (it being the primary contact with
purchasers and users of the D & R Coatings in the Territory)
always communicating to such purchasers and users complete and
accurate information regarding usage and proper application of
the D & R Coatings and proper preparation of surfaces to which
the D & R Coatings are to be applied. Accordingly, except as to
substandard performance of the D & R Coatings causally connected
to defects in Technical Information furnished by Licensor to
Licensee, Licensee shall indemnify and hold harmless Licensor
against all claims, demands and liabilities of whatever kind and
nature, including costs and expenses (including attorneys' fees)
of defending against the same, arising in any manner out of or in
connection with Licensee's manufacture, packaging, sale or use of
the Coatings.
7.2 Licensee shall provide prompt written notice to Licensor of
all claims, demands, suits, actions or proceedings which are made
or brought against Licensee by reason of Licensee's manufacture,
packaging, sale or use of the D & R Coatings.
7.3 In the event that Licensee maintains any insurance against
either substantive liability under Subsection 7.1 or contractual
assumptions of this indemnity obligation, Licensee shall effect
Licensor to be added as a named insured in all policies
evidencing any such insurance.
7.4 The provisions of this Section 7 shall survive the
expiration or termination of this Agreement.
SECTION 8
TERM AND TERMINATION
8.1 This Agreement shall become effective on the Effective Date
and shall run for an initial term of ten (10) Contract Years.
This Agreement shall, after the initial term of ten (10) years,
be renewed for successive terms of five (5) years upon the mutual
agreement in writing of Licensee and Licensor.
8.2 Licensor may terminate this Agreement:
(a) If Licensee defaults in the payment of any royalties
when due or in the performance of any other term or condition of
this Agreement to be performed by it and such default is not
10<PAGE>
cured within 30 days after notice in writing by Licensor, such
termination to be effective at the expiration of such 30-day
period.
(b) If any proceedings in bankruptcy or in reorganization
or for the appointment of a receiver or trustee or any other for
the appointment of a receiver or trustee or any other proceedings
under any insolvency law or law for the relief of debtors shall
be instituted by or against Licensee and such proceedings are not
set aside or vacated by a court of competent jurisdiction within
90 days after such proceedings are instituted, or if Licensee
shall assign its property or a substantial part thereof for the
benefit of creditors, effective 90 days after notice by Licensor,
given any time after such proceedings are instituted or the
assignment is made.
(c) On written notice in the event of governmental
expropriation or nationalization, in whole or in part, of any of
the assets of Licensee which relate to activities of Licensee
contemplated by this Agreement.
(d) On written notice in the event of any change in the
ownership or control of Licensee, or if a competitor of Licensor
takes any ownership position in Licensee.
(e) On written notice if Licensee wrongfully uses or
wrongfully discloses any of the Technical Information.
(f) On written notice if any one or more of the provisions
of this Agreement are held invalid, illegal or unenforceable in
any respect.
8.3 Licensee may terminate this Agreement:
(a) If Licensor defaults in the performance of any material
term or condition of this Agreement to be performed by it, and
such default is not cured within 60 days after notice in writing
by Licensee, such termination to be effective at the expiration
of such 60-day period.
(b) If any proceedings in bankruptcy or in reorganization
or for the appointment of a receiver or trustee or any other
proceedings under any insolvency law or law for the relief of
debtors shall be instituted by or against Licensor and such
proceedings are not set aside or vacated by a court of competent
jurisdiction within 90 days after such proceedings are
instituted, or if Licensor shall assign its property or a
substantial part thereof for the benefit of creditors, effective
90 days after notice by Licensee, given any time after such
11<PAGE>
proceedings are instituted or the assignment is made.
8.4 The rights of termination under Subsections 8.2 and 8.3 are
not exclusive of any other remedies or means of redress to which
the non-defaulting party may be lawfully entitled, it being
intended that all such remedies shall be cumulative and not
exclusive.
8.5 Upon expiration or termination of this Agreement, regardless
of the party invoking termination provisions or the basis on
which the Agreement is terminated, Licensee shall pay to
Licensor, within 45 days after the date of expiration or
termination, all royalties and any other payments that have
accrued prior to such expiration or termination, required to be
paid under this Agreement.
8.6 Upon expiration or termination of this Agreement, Licensee
shall make no further use in any manner of the Technical
Information furnished to it by Licensor under this Agreement,
including, but not limited to, manufacturing, sales, licensing or
sublicensing, and the rights granted by Licensor to Licensee
hereunder for Licensee's use of the Licensed Trademarks shall
terminate to the same extent. Licensee shall return all
originals and all copies of the Technical Information to Licensor
and shall furnish a statement signed by an authorized officer of
Licensee certifying that all Technical Information has been
returned to Licensor and no copies have been retained by
Licensee.
SECTION 9
SAVINGS
9.1 If any provision of this Agreement shall be held to be
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
9.2 The provisions of Subsection 9.1 notwithstanding, it shall
be a condition precedent to the validity of this Agreement that
there is not any law existing as of the date hereof which would
have the force or effect of rendering inoperative to any degree
or in any manner the termination provisions set forth within
Subsections 8.2 and 8.3 or the provisions of Section 6 or
Subsection 8.6.
9.3 Should any duly constituted governmental body having
jurisdiction or authority over either party enact, subsequent to
the date hereof, any law vitiating the rights of either party
under the provisions of Section 6, or Subsections 8.2, 8.3 or
12<PAGE>
8.6, the party so affected shall then have the right to terminate
this Agreement at any time before the effectiveness of such law,
by giving prior written notice to the other. In the event any
such law is effective immediately upon enactment or made
retroactive to an earlier date, the party so affected shall then
have the right to immediately terminate this Agreement
simultaneously with or preceding the effective date of such law.
SECTION 10
CONFLICT OF INTEREST
10.1 In order to prevent commingling and/or unauthorized
disclosure, Licensee agrees during the term of this Agreement or
any extension thereof, not to execute any other agreement for the
licensing from a third party of technology used to manufacture
coatings similar to the Coatings without the prior written
consent of Licensor, which consent shall not unreasonably be
withheld.
10.2 Licensor and Licensee each represent to the other that this
Agreement will not constitute interference or conflict of
interest with any of its present agreements, working
relationships or undertakings with any third party or parties,
and that this Agreement will not be so affected thereby. Each
covenants to the other that, for the duration of this Agreement
or any extension thereof, it will not enter into any agreements,
working relationships or undertakings which would give rise to
interference or conflict of interest in connection with this
Agreement or any extension thereof without the prior written
consent of the other party, which such consent shall not be
unreasonably withheld.
SECTION 11
ASSIGNMENT AND SUBLICENSE
All grants made by Licensor under this Agreement are non-
assignable and are for the sole and exclusive use of Licensee,
and Licensee shall not assign, sell, transfer or sublicense the
within grants or any part thereof without the express written
consent of Licensor. Any provision to the contrary
notwithstanding, there shall be no restriction upon Licensor's
right to assign and transfer this Agreement to its parent or any
subsidiary or affiliate, or to any party in connection with a
merger or consolidation involving Licensor or a sale of that
portion of Licensor's business in connection with which this
Agreement is utilized.
13<PAGE>
SECTION 12
FORCE MAJEURE
Any delays in or failure by either party hereto in
performance hereunder (other than the payment of monies due
hereunder) shall be excused if and to the extent that such delays
or failures are caused by occurrences beyond such party's
control, including, but not limited to, acts of God, decrees of
restraint of government, strikes or other labor disturbances,
war, sabotage and any other cause or causes, whether similar or
dissimilar to those already specified, which cannot be controlled
by such party. Such performance shall be so excused during the
inability of the party to perform so caused, but for no longer
period, and the cause thereof shall be remedied with all
reasonable dispatch.
SECTION 13
MISCELLANEOUS
13.1 Licensee is an independent contractor and nothing contained
in this Agreement shall be construed to place the parties in the
relationship of partners, joint venture or agency and neither
party shall have the power or authority to obligate or bind the
other. Licensee is not authorized to, and shall not, make any
commitment, representation or warranty for or on behalf of
Licensor or hold itself out or represent itself as an agent of
Licensor.
13.2 All notices required to be given under this Agreement shall
be in writing, and shall be delivered personally, or by reputable
courier service, or by certified or registered mail, return
receipt requested, addressed to the party at its address set
forth below, or at such other address as it shall have
theretofore specified by written notice similarly delivered:
Licensor: Devoe & Raynolds Co.
Division of Grow Group, Inc.
4000 Dupont Circle
Louisville, KY 40207
Attention: President
with a copy to:
Grow Group, Inc.
200 Park Avenue
New York, NY 10166
Attention: Law Department
14<PAGE>
Licensee: Montana, C.A.
Calle Hans Neumann, Edificio Corimon
Los Cortijos de Lourdes
Caracas, Venezuela
Attention: Presidente
with copies to:
Montana, C.A.
Calle Hans Neumann, Edificio Corimon
Los Cortijos de Lourdes
Caracas, Venezuela
Attention: Gerente General
and
Corimon, C.A. S.A.C.A.
Apdo. 3654
Caracas, 1010-A
Venezuela
Attention: Consultor Juridico
13.3 The validity, performance, construction and effect of this
Agreement shall be governed by the laws of the State of New York,
USA for the determination of any controversy whatsoever arising
under or in connection with this Agreement. Any legal action or
proceeding with respect to this Agreement or any matters arising
out of or in connection with this Agreement or otherwise, and any
action for enforcement of any judgment in respect thereof shall,
at the option of the Licensor, be brought exclusively in the
courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution
and delivery of this Agreement, Licensee hereby accepts for
itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts and
appellate courts thereof. Licensee irrevocably consents to
service of process out of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, or by recognized
international express courier or delivery service, to Licensee at
its address referred to in Subsection 13.2 hereof. In addition,
Licensee hereby designates CT Corporation System, 1633 Broadway,
New York, New York, 10019 as Licensee's agent for service of
process, and service upon Licensee shall be deemed to be
effective upon service of CT Corporation System as aforesaid or
of its successor designated in accordance with the following
sentence. Licensee may designate another corporate agent or law
firm reasonably acceptable to Licensor and located in the Borough
of Manhattan, City of New York, as successor agent for service of
process upon 30-days prior written notice to Licensor. Licensee
irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or
15<PAGE>
proceedings arising out of or in connection with this Agreement
or otherwise brought in the courts referred to above and hereby
further irrevocably waives and agrees, to the extent permitted by
applicable law, not to plead or claim in any such court that any
such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect
the right of any party hereto to serve process in any other
manner permitted by law.
13.4 This Agreement shall be binding upon the successors or
permitted assigns of either party hereto.
13.5 The subject headings of the Sections of this Agreement are
included for purposes of convenience only, and shall not affect
the construction or interpretation of any of its provisions.
13.6 This Agreement constitutes the entire understanding between
the parties with respect to the subject matter hereof and may be
amended only by a document in writing subscribed by authorized
signatories of the parties.
13.7 The failure of either party to insist, in any one or more
instances, upon a strict performance of any of the terms or
conditions of this Agreement, or the waiver by either party of
any term, condition or right hereunder, or of any default by the
other party, shall not be deemed or construed to be a waiver by
such party of any such term, condition, right or default in any
other instance.
16<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Coatings License Agreement to be executed by their
respective officers duly authorized thereunto, as of the date
first above written.
GROW GROUP, INC.
By: /s/ Joseph M. Quinn Date: 3/24/93
_________________________ ________
Joseph M. Quinn
Executive Vice President
MONTANA, C.A.
By: /s/ Arthur W. Broslat Date: 3/24/93
_______________________ ________
Name: Arthur W. Broslat
__________________
Title: President
__________________
State of NEW YORK )
)ss.
County of NEW YORK)
On the 24th day of March, 1993 before me personally came
Joseph M. Quinn to me known, who, being by me duly sworn, did
depose and say that he resides in Prospect, Kentucky; that he is
the Executive Vice President of Grow Group, Inc., the corporation
described in and which executed the above instrument; and that he
signed his name thereto by order of the board of directors of
said corporation.
/s/ Corinne Loreto
___________________
Notary Public
17<PAGE>
State of NEW YORK )
) ss.
County of NEW YORK)
On the 24th day of March, 1993 before me personally came
Arthur W. Broslat to me known, who, being by me duly sworn, did
depose and say that he resides in Caracas, Venezuela; that he is
the President of Montana, C.A., the corporation described in and
which executed the above instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
/s/ Corinne Loreto
___________________
Notary Public
18<PAGE>
APPENDIX A
LICENSED TRADEMARKS
Trademark Registration Number
ALL-WEATHER
BAR-OX
BLOXFIL
DEVOE 67,782
DE-VO-KO
DE-VO-LAC
DE-VO-TEX
GRANITEX
KILSTAIN
KILSTAIN-WB
METALCLAD
MILLITE
MIRROLAC
MIRROLAC-WB
MIRROTHANE
PRIMECOAT
REGENCY
RE-NEW-COAT
SPEED DRY
SPEED-REX
SPRA-MAX
SUPER-POR-SEAL
19<PAGE>
APPENDIX A
LICENSED TRADEMARKS
Trademark Registration Number
TRAFFIC-LINE
TRIPLE COVER
TRU-FLO
TRU-GLAZE
TRU-GLAZE-4
TRU-GLAZE-2
TRU-GLAZE-WB
UNI-GRIP
VELOUR
WONDER BOND
WONDER-GUARD
WONDER-HIDE
WONDER-PRIME
WONDER-PRUF
WONDER-SHIELD
WONDER SPRAY
WONDER STICK
WONDER TINT COLOR KEY COLORANTS
WONDER-TONES
WONDER WOOD SATIN
WONDER WOOD SEALER
WONDER WOODSTAIN
20<PAGE>
EXHIBIT 10(i)
COATINGS LICENSE AGREEMENT
dated
as of April 21, 1993
Between the Company and Montana, C.A.<PAGE>
COATINGS LICENSE AGREEMENT
THIS AGREEMENT made, as of the 21st day of April, 1993, by and between
Grow Group, Inc. (on behalf of its Devoe Coatings Company division), a
corporation organized and existing under the laws of the State of New York,
U.S.A., having an office at 4000 Dupont Circle, Louisville, Kentucky 40207
(hereinafter referred to as "Licensor"), and MONTANA, C.A., a corporation
organized and existing under the laws of the Republic of Venezuela, having an
office at Calle Hans Neumann, Los Cortijos De Lourdes, Edificio Corimon, Caracas
1060, Venezuela (hereinafter referred to as "Licensee").
WITNESSETH:
WHEREAS, Licensor possesses certain valuable formulas, trade
secrets, know-how, technological information and data, laboratory research,
product information and technical knowledge relating to the formulation and
manufacture of certain coatings for heavy duty marine, offshore and industrial
applications (hereinafter referred to as the "Coatings"); and
WHEREAS, Licensor desires to enter into a licensing agreement with a
manufacturing and marketing entity to facilitate the manufacture, sale and
distribution of the Coatings in the Republic of Venezuela (hereinafter referred
to as the "Territory") using formulae, technology and know-how of Licensor; and
WHEREAS, Licensee desires to obtain a license to manufacture, sell and
distribute the Coatings in the Territory on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
promises and covenants contained herein and other good and valuable
consideration, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 The term "Technical Information" shall mean all information in use by
Licensor in its manufacture, use and sale of Coatings which have been fully
tested, proven and marketed by Licensor, as further defined under Section 3.
1.2 The term "Licensed Trademarks" shall mean those trademarks listed in
Appendix A as well as additional trademarks which may from time to time be added
to Appendix A by the parties hereto pursuant to mutual agreement in writing.<PAGE>
1.3 The term "Net Sales" shall mean gross sales to the trade less returns, any
product shipping costs included in gross sales, any turnover tax absorbed by
Licensee, general price discounts, and discounts for prompt payment which are
actually given by Licensee to its customers.
1.4 The term "Contract Year" shall mean each successive period of 365 calendar
days (366 days in the case of leap years) during the term of this Agreement,
commencing with the Effective Date.
1.5 The term "Effective Date" shall mean the date that this Agreement is
registered with the Venezuelan Superintendency of Foreign Investment (SIEX).
1.6 The term "Reformulated Coatings" shall mean a) any future paint or coating
based in any way on any Technical Information of Licensor, and b) any of the
marine, offshore and industrial coatings currently manufactured by Licensee if
the formulation for same is hereafter changed, including, but not limited to, a
solvent change.
SECTION 2
LICENSE, MANUFACTURE, PACKAGING AND SALE
2.1 Licensor hereby grants to Licensee, during the term of this Agreement,
*** license to utilize the Technical Information to manufacture the Coatings,
in the plants of Licensee, within the Territory.
2.2 Licensor further grants to Licensee *** license to use and sell
the Coatings for heavy duty marine, industrial and offshore applications.
2.3 Licensee acknowledges that the favorable reputation and goodwill associated
with the Coatings are dependent for preservation thereof upon the proper
manufacture of the Coatings and upon the maintenance of the standard quality of
the Coatings. Licensee shall at all times manufacture the Coatings only in
accordance with Technical Information furnished by Licensor to Licensee pursuant
to Section 3, and will maintain quality control standards specified by Licensor.
2.4 Licensee further agrees to manufacture and sell the Coatings in compliance
with all applicable laws and regulations of any legally constituted public
authority, and to notify Licensor immediately should it learn that Technical
Information furnished by Licensor to Licensee is in violation of such laws and
regulations. Licensee agrees to indemnify and hold harmless
***confidential - intentionally omitted and filed separately with the Securities
and Exchange Commission (the "SEC").
2<PAGE>
Licensor and to assume responsibility for any penalty imposed upon it or upon
Licensor by any legally constituted public authority arising in any manner out
of or in connection with any act or omission of Licensee hereunder causing
non-compliance with such laws and regulations.
2.5 Licensee agrees to use its best efforts to develop and increase sales of
the Coatings through the use of the Technical Information made available
hereunder.
SECTION 3
TECHNICAL INFORMATION
3.1 Licensor shall furnish to Licensee, in the manner hereinafter specified,
all Technical Information pertaining to the Coatings which Licensor presently
has, develops or hereafter acquires with the right of free transmittal during
the term of this Agreement; provided, however, that Licensee agrees that
Licensor has no obligation to furnish technical information to Licensee which
Licensor secures by way of merger and/or acquisition.
3.2 In carrying out the provisions of Subsection 3.1, Licensor will:
(a) Furnish to Licensee for its use hereunder identification of raw
material sources, raw material specifications (if any), control tests (if any)
for purchased raw materials, details of manufacturing operations (including
process engineering), formulae and testing procedures for intermediate and
finished products, application techniques, details of design and use of
equipment utilized in manufacturing operations of Licensor (or, in lieu thereof,
source and identification of purchased equipment) and other technical
information in the possession of Licensor necessary for the manufacture, use and
sale of the Coatings. It is intended by and between the parties that the major
portion of the Technical Information to be provided by Licensor to Licensee
under this Agreement will be furnished in the manner set forth in this
Subsection 3.2.
(b) At the request of Licensee, receive at reasonable times Licensee's
personnel designated by Licensee, for training in appropriate facilities of
Licensor, as designated by Licensor, for periods not to exceed in total 20 man
days during the first Contract Year of this Agreement and, thereafter, 10 man
days during each subsequent Contract Year of this Agreement. Licensee agrees to
pay all costs and expenses incurred by its personnel under this Subsection,
including, but not limited to, salary, travel and living expenses. Licensee
shall hold harmless
3<PAGE>
Licensor from any and all injury, loss, or damage to the person or property of
Licensor or its employees, Licensee's personnel or third parties occasioned by
any act or neglect on the part of the said personnel of Licensee, shall defend
at its cost any and all actions arising therefrom, and shall pay promptly all
attorneys' fees and judgments resulting therefrom.
(c) Assist Licensee through correspondence regarding the Coatings.
(d) If, in addition, Licensee so requests, Licensor agrees to provide to
Licensee, at reasonable times, outside the United States, royalty free and
incidental to the technical assistance and Technical Information furnished in or
from the United States, the services of Licensor's personnel skilled in the
Coatings. Licensee agrees to pay to Licensor $300.00 per man day for each day
(including travel time) said personnel are away from their home location, plus
the travel and reasonable living expenses of said personnel during such periods.
3.3 Licensee agrees to furnish to Licensor, for Licensor's and its affiliates
use during the term of this Agreement and thereafter, and with the right of free
transmittal, all technical information relative to the Coatings which Licensee
develops or acquires during the term of this Agreement and which constitutes a
modification of or improvement upon the Technical Information furnished by
Licensor to Licensee hereunder. Licensee shall furnish such technical
information to Licensor in the same general manner and under the same conditions
as Licensor furnishes Technical Information to Licensee under Subsections 3.1
and 3.2 (a) and (c) hereof.
3.4 In carrying out the provisions of Subsection 3.3, Licensee agrees to
receive at reasonable times, upon written request by Licensor, up to two
personnel of Licensor in the facilities of Licensee for a total of up to 10 man
days in each Contract Year during the term hereof, and to give such personnel
access to the business operations of Licensee with respect to the Coatings and
Reformulated Coatings as regards Licensee's use of the Technical Information and
modifications thereof or improvements thereto by Licensee. Licensor agrees to
pay all costs and expenses incurred by its personnel under this Subsection 3.4,
including, but not limited to, salary, travel and living expenses. Licensor
shall hold harmless Licensee from any and all injury, loss or damage to the
person or property of Licensee or its employees, Licensor's personnel, or third
parties occasioned by any act or neglect on the part of the said personnel of
Licensor, shall defend at its cost any and all actions arising therefrom, and
shall pay promptly all attorneys' fees and judgments resulting therefrom.
4<PAGE>
3.5 Licensee hereby grants to Licensor and its affiliates, the non-exclusive,
royalty-free right to employ, and to authorize others licensed by Licensor in
connection with the Coatings to employ, the technical information furnished by
Licensee to Licensor under this Agreement. Licensor agrees, when licensing
others for the Coatings, to use its best efforts to establish under similar
arrangements with other parties, reciprocal rights for the benefit of Licensee
in the Territory respecting technical information furnished by such other
parties to Licensor. The grants made in this Subsection shall survive the
expiration or termination of this Agreement and shall continue following such
expiration or termination, non-exclusive, royalty free and without geographic
limitation.
3.6 Licensee agrees to take no action with respect to the Technical Information
furnished to it by Licensor under this Agreement or the Coatings produced
employing the same which would be illegal under U.S. laws or regulations
relating to the export of technical data, as communicated to it from time to
time by Licensor. Licensee agrees to indemnify and hold harmless Licensor and
to assume responsibility for any penalty imposed upon it or upon Licensor by any
legally constituted public authority arising in any manner out of or in
connection with any act or omission of Licensee hereunder causing non-compliance
with such laws and regulations.
SECTION 4
TRADEMARKS
4.1 Licensor hereby grants to Licensee, during the term of this Agreement,
*** license under Licensor's rights under the common law or by registration
to use the Licensed Trademarks on and in connection with its sale of the
Coatings in the Territory provided that the Coatings meet Licensor's then
current standards and requirements as more fully set forth herein.
4.2 Licensee recognizes that the favorable reputation and goodwill associated
with the Licensed Trademarks are dependent for their preservation upon the
proper use of the Licensed Trademarks, upon the proper manufacture of the
Coatings, and upon the maintenance of the standard quality of the Coatings
produced by Licensee hereunder. Licensee thus agrees that it will not use, or
knowingly consent to the use of, any Licensed Trademark (including, without
limitation, on any label or product literature) except in accordance with the
standards and requirements which from time to time are furnished by Licensor.
Licensor reserves the right to modify such standards and requirements at any
time. Licensee agrees, upon request by
***confidential - intentionally omitted and filed separately with the Securities
and Exchange Commission (the "SEC").
Licensor, to promptly deliver to Licensor samples of the Coatings and all labels
and other items to which it applies the Licensed Trademarks.
4.3 Licensee agrees that it will use the Licensed Trademarks and Licensor's
product names and numbers on all Coatings manufactured and sold by Licensee
under this Agreement.
5<PAGE>
4.4 During the term of this Agreement and thereafter, Licensee will not use, or
knowingly consent to the use of, any trademark, tradename or commercial name, on
or in connection with the Coatings or other products of Licensee, which
trademark, tradename or commercial name is similar in sound, appearance or
meaning to any Licensed Trademark or any other trademark, tradename or
commercial name employed by Licensor or other companies affiliated with
Licensor.
4.5 Licensee acknowledges that the Licensed Trademarks are the exclusive
property of Licensor. Licensee agrees to take all actions requested by
Licensor, at the expense of Licensor, to assist Licensor in maintaining the
Licensed Trademarks and the ownership thereof by Licensor.
4.6 Licensee shall include or cause to be included, by means of imprint,
lithography or label, the legend "Manufactured under license from Devoe Coatings
Company, Division of Grow Group, Inc." on all containers of the Coatings
manufactured by Licensee under this Agreement.
SECTION 5
PAYMENT
5.1 Licensee will pay to Licensor, as an initial fee for the Technical
Information licensed hereunder and furnished in or from the United States,
simultaneously with the execution of this Agreement, the sum of ***
dollars in United States currency, no part of which sum shall be refundable in
any event.
5.2 In addition to the *** dollars payment specified in Subsection 5.1
above, Licensee shall pay to Licensor during the term of this Agreement a
running royalty for the Technical Information licensed hereunder and furnished
in or from the United States of *** of Licensee's Net Sales of the
Coatings and Reformulated Coatings manufactured by Licensee, for sale to third
parties, regardless of the end uses for which the Coatings and Reformulated
Coatings are sold, where sold, or the trademark, if any, under which sold.
Licensee shall also pay to Licensor during the term of this Agreement a running
royalty for the Technical Information licensed hereunder and furnished in or
***confidential - intentionally omitted and filed separately with the Securities
and Exchange Commission (the "SEC").
from the United States of *** of the Net Sales value of all Coatings and
Reformulated Coatings manufactured by Licensee for its and its affiliates
internal use (such coatings shall, for royalty purposes hereunder, have a Net
Sales value equal to the Net Sales price of similar or identical coatings sold
to unrelated parties).
5.3 Under this Agreement, a royalty shall be due when the Coating produced by
Licensee is used or is sold (as determined at the time when it is billed, or if
not billed, when it is shipped or otherwise delivered). Coatings and
Reformulated Coatings which are scrapped, so as not to be used for their normal
or intended purpose, or which are used in mere routine testing, are not subject
to royalty. Royalties paid hereunder on Coatings or Reformulated Coatings
6<PAGE>
returned by the customer, for which full credit is allowed, shall be credited on
future royalty payments hereunder, but shall not be otherwise recoverable.
5.4 For the first Contract Year only, Licensee shall pay running royalties to
Licensor only, if, and to the extent that they exceed *** dollars in
United States currency. If the running royalties to be paid by Licensee to
Licensor for any subsequent Contract Year do not equal a minimum of ***
dollars in United States currency, Licensee shall pay to Licensor with its
royalties payable for the last three-month period of each such Contract Year a
sum sufficient to bring the total of all royalty payments for such Contract Year
to the aforesaid minimum amount.
5.5 Within 45 days after the end of each consecutive three-month period of each
Contract Year, Licensee shall furnish to Licensor, signed and sworn to by an
officer of Licensee, a royalty report stating for all constituents of the
Coatings and Reformulated Coatings subject to royalty payment hereunder, the
gross sales and Net Sales, in local currency, of each said coating sold or used
by Licensee during such period. Each royalty report shall be accompanied by the
royalty payment due for such period in United States currency, converted from
local currency at the most favorable exchange rate to Licensor prevailing in
major Venezuelan banks on the last day of the period to which such payment
relates. Licensor shall have the right, but not the obligation, to accept
Venezuelan currency, in lieu of United States currency, should the royalty
payment by Licensee to Licensor be prevented indefinitely or delayed more than
six months by exchange control regulations of said government.
***confidential - intentionally omitted and filed separately with the Securities
and Exchange Commission (the "SEC").
7<PAGE>
5.6 Licensee shall keep complete records of all of its use of and sales of the
Coatings and Reformulated Coatings. Licensor shall have access to Licensee's
books, records, and accounts at all reasonable times during the term of this
Agreement and for a period of 180 days after the expiration or termination of
this Agreement for the purpose of auditing and otherwise assuring compliance
with the terms of this Agreement. Licensee shall, at the request of Licensor,
obtain from the independent auditor which regularly audits the books of
Licensee, said auditor's statement certifying the accuracy of the royalty
reports to be provided hereunder, for a period of up to two years preceding each
such request.
5.7 All payments to be made by Licensee to Licensor hereunder shall be
disbursed without any deduction for taxes or similar levies imposed by any
legally constituted public authority in the Territory or elsewhere, except to
the extent that Licensor is able to and does obtain a credit against its taxes
in the United States for such deductions. Licensee will obtain and provide
Licensor on a timely basis with the original tax receipt and any other
documentation necessary for Licensor to obtain credit against its taxes in the
United States for any deduction made from any payment hereunder.
5.8 Upon expiration or termination of this Agreement for any reason, the
royalty report and corresponding payment covering the terminal period hereunder
shall also include the Coatings and Reformulated Coatings produced by Licensee
under this Agreement but not used or sold as of said termination, using as a Net
Sales price for royalty calculations the average Net Sales price for each of the
Coatings and Reformulated Coatings sold by Licensee during the 12 months
immediately preceding such expiration or termination.
5.9 Any payment not made by Licensee to Licensor when due hereunder shall bear
interest, until paid, from a date 10 days after Licensee's payment is due, at a
rate equal to the prime rate charged by Chemical Bank, New York, New York, on
the date such payment is due, plus three percentage points.
SECTION 6
CONFIDENTIALITY
Licensee agrees both a) during the term of this Agreement (including any
extensions) and b) during an additional period of time equal to the initial term
of this Agreement (10 years) plus any extension periods (if any) thereof (5
years per extension), even if this Agreement is terminated prior to the end of
the initial or any extended term, to maintain in confidence 1) all
8<PAGE>
Technical Information furnished to it under this Agreement, 2) the terms of this
Agreement except to the extent disclosure to Licensee's attorneys, accountants
and other professional advisors is necessary and 3) all technical information
relative to the Coatings and Reformulated Coatings which Licensee develops or
acquires during the term of this Agreement and which constitutes a modification
of or improvement upon the Technical Information relative to the D & R Coatings
furnished by Licensor to Licensee hereunder. Licensee further agrees to
obligate all personnel of Licensee to adhere to the obligation of
confidentiality to the extent that the Technical Information was not known to
and was not the property of Licensee as evidenced by Licensee's written records
at the time of receipt, or is not lawfully obtained from some other source
having an unrestricted right of use and a legal right of disclosure. The
obligation of confidentiality under this Section 6 shall not apply to technical
information which is or becomes public knowledge through no fault of Licensee.
The provisions of this Section 6 shall survive the expiration or termination of
this Agreement.
SECTION 7
INDEMNITY
7.1 In the mutual interest of eliminating to the maximum extent possible the
risk of incurring complaints concerning the performance of the Coatings, the
parties hereto acknowledge the importance of Licensee (it being the primary
contact with purchasers and users of the Coatings in the Territory) always
communicating to such purchasers and users complete and accurate information
regarding usage and proper application of the Coatings and proper preparation of
surfaces to which the Coatings are to be applied. Accordingly, except as to
substandard performance of the Coatings causally connected to defects in
Technical Information furnished by Licensor to Licensee, Licensee shall
indemnify and hold harmless Licensor against all claims, demands and liabilities
of whatever kind and nature, including costs and expenses (including attorneys'
fees) of defending against the same, arising in any manner out of or in
connection with Licensee's manufacture, packaging, sale or use of the Coatings.
7.2 Licensee shall provide prompt written notice to Licensor of all claims,
demands, suits, actions or proceedings which are made or brought against
Licensee by reason of Licensee's manufacture, packaging, sale or use of the
Coatings.
7.3 In the event that Licensee maintains any insurance against either
substantive liability under Subsection 7.1 or contractual assumptions of this
indemnity obligation, Licensee shall effect Licensor to be added as a named
insured in all policies evidencing any such insurance.
9<PAGE>
7.4 The provisions of this Section 7 shall survive the expiration or
termination of this Agreement.
SECTION 8
TERM AND TERMINATION
8.1 This Agreement shall become effective on the Effective Date and shall run
for an initial term of ten (10) Contract Years. This Agreement shall, after the
initial term of ten (10) years, be renewed for successive terms of five (5)
years upon the mutual agreement in writing of Licensee and Licensor.
8.2 Licensor may terminate this Agreement:
(a) If Licensee defaults in the payment of any royalties when due or in
the performance of any other term or condition of this Agreement to be performed
by it and such default is not cured within 30 days after notice in writing by
Licensor, such termination to be effective at the expiration of such 30-day
period.
(b) If any proceedings in bankruptcy or in reorganization or for the
appointment of a receiver or trustee or any other proceedings under any
insolvency law or law for the relief of debtors shall be instituted by or
against Licensee and such proceedings are not set aside or vacated by a court of
competent jurisdiction within 90 days after such proceedings are instituted, or
if Licensee shall assign its property or a substantial part thereof for the
benefit of creditors, effective 90 days after notice by Licensor, given any time
after such proceedings are instituted or the assignment is made.
(c) On written notice in the event of governmental expropriation or
nationalization, in whole or in part, of any of the assets of Licensee which
relate to activities of Licensee contemplated by this Agreement.
(d) On written notice in the event of any change in the ownership or
control of Licensee, or if a competitor of Licensor takes any ownership position
in Licensee.
(e) On written notice if Licensee wrongfully uses or wrongfully discloses
any of the Technical Information.
(f) On written notice if any one or more of the provisions of this
Agreement are held invalid, illegal or unenforceable in any respect.
10<PAGE>
8.3 Licensee may terminate this Agreement:
(a) If Licensor defaults in the performance of any material term or
condition of this Agreement to be performed by it, and such default is not cured
within 60 days after notice in writing by Licensee, such termination to be
effective at the expiration of such 60-day period.
(b) If any proceedings in bankruptcy or in reorganization or for the
appointment of a receiver or trustee or any other proceedings under any
insolvency law or law for the relief of debtors shall be instituted by or
against Licensor and such proceedings are not set aside or vacated by a court of
competent jurisdiction within 90 days after such proceedings are instituted, or
if Licensor shall assign its property or a substantial part thereof for the
benefit of creditors, effective 90 days after notice by Licensee, given any time
after such proceedings are instituted or the assignment is made.
8.4 The rights of termination under Subsections 8.2 and 8.3 are not exclusive
of any other remedies or means of redress to which the non-defaulting party may
be lawfully entitled, it being intended that all such remedies shall be
cumulative and not exclusive.
8.5 Upon expiration or termination of this Agreement, regardless of the party
invoking termination provisions or the basis on which the Agreement is
terminated, Licensee shall pay to Licensor, within 45 days after the date of
expiration or termination, all royalties and any other payments that have
accrued prior to such expiration or termination, required to be paid under this
Agreement.
8.6 Upon expiration or termination of this Agreement, Licensee shall make no
further use in any manner of the Technical Information furnished to it by
Licensor under this Agreement, including, but not limited to, manufacturing,
sales, licensing or sublicensing, and the rights granted by Licensor to Licensee
hereunder for Licensee's use of the Licensed Trademarks shall terminate to the
same extent. Licensee shall return all originals and all copies of the
Technical Information to Licensor and shall furnish a statement signed by an
authorized officer of Licensee certifying that all Technical Information has
been returned to Licensor and no copies have been retained by Licensee.
11<PAGE>
SECTION 9
SAVINGS
9.1 If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
9.2 The provisions of Subsection 9.1 notwithstanding, it shall be a condition
precedent to the validity of this Agreement that there is not any law existing
as of the date hereof which would have the force or effect of rendering
inoperative to any degree or in any manner the termination provisions set forth
within Subsections 8.2 and 8.3 or the provisions of Section 6 or Subsection 8.6.
9.3 Should any duly constituted governmental body having jurisdiction or
authority over either party enact, subsequent to the date hereof, any law
vitiating the rights of either party under the provisions of Section 6, or
Subsections 8.2, 8.3 or 8.6, the party so affected shall then have the right to
terminate this Agreement at any time before the effectiveness of such law, by
giving prior written notice to the other. In the event any such law is
effective immediately upon enactment or made retroactive to an earlier date, the
party so affected shall then have the right to immediately terminate this
Agreement simultaneously with or preceding the effective date of such law.
SECTION 10
CONFLICT OF INTEREST
10.1 In order to prevent commingling and/or unauthorized disclosure, Licensee
agrees during the term of this Agreement or any extension thereof, not to
execute any other agreement for the licensing from a third party of technology
used to manufacture coatings similar to the Coatings without the prior written
consent of Licensor, which consent shall not unreasonably be withheld.
10.2 Licensor and Licensee each represent to the other that this Agreement will
not constitute interference or conflict of interest with any of its present
agreements, working relationships or undertakings with any third party or
parties, and that this Agreement will not be so affected thereby. Each
covenants to the other that, for the duration of this Agreement or any extension
thereof, it will not enter into any agreements, working relationships or
undertakings which would give rise to interference or conflict of interest in
connection with this Agreement or any extension thereof without the prior
written consent of the other party, which such consent shall not be unreasonably
withheld.
SECTION 11
ASSIGNMENT AND SUBLICENSE
All grants made by Licensor under this Agreement are non- assignable and
are for the sole and exclusive use of Licensee, and Licensee shall not assign,
sell, transfer or sublicense the within grants or any part thereof without the
express written consent of Licensor. Any provision to the contrary
notwithstanding, there shall be no restriction upon Licensor's right to assign
and transfer this Agreement to its parent or any subsidiary or affiliate, or to
12<PAGE>
any party in connection with a merger or consolidation involving Licensor or a
sale of that portion of Licensor's business in connection with which this
Agreement is utilized.
SECTION 12
FORCE MAJEURE
Any delays in or failure by either party hereto in performance hereunder
(other than the payment of monies due hereunder) shall be excused if and to the
extent that such delays or failures are caused by occurrences beyond such
party's control, including, but not limited to, acts of God, decrees of
restraint of government, strikes or other labor disturbances, war, sabotage and
any other cause or causes, whether similar or dissimilar to those already
specified, which cannot be controlled by such party. Such performance shall be
so excused during the inability of the party to perform so caused, but for no
longer period, and the cause thereof shall be remedied with all reasonable
dispatch.
SECTION 13
MISCELLANEOUS
13.1 Licensee is an independent contractor and nothing contained in this
Agreement shall be construed to place the parties in the relationship of
partners, joint venture or agency and neither party shall have the power or
authority to obligate or bind the other. Licensee is not authorized to, and
shall not, make any commitment, representation or warranty for or on behalf of
Licensor or hold itself out or represent itself as an agent of Licensor.
13.2 All notices required to be given under this Agreement shall
be in writing, and shall be delivered personally, or by reputable courier
service, or by certified or registered mail, return receipt requested, addressed
to the party at its address set forth below, or at such other address as it
shall have theretofore specified by written notice similarly delivered:
13<PAGE>
Licensor: Devoe Coatings Company
Division of Grow Group, Inc.
4000 Dupont Circle
Louisville, KY 40207
Attention: President
with a copy to:
Grow Group, Inc.
200 Park Avenue
New York, NY 10166
Attention: Law Department
Licensee: Montana, C.A.
Calle Hans Neumann, Edificio Corimon
Los Cortijos de Lourdes
Caracas, Venezuela
Attention: Presidente
with copies to:
Montana, C.A.
Calle Hans Neumann, Edificio Corimon
Los Cortijos de Lourdes
Caracas, Venezuela
Attention: Gerente General
and
Corimon, C.A. S.A.C.A.
Apdo. 3654
Caracas, 1010-A, Venezuela
Attention: Consultor Juridico
13.3 The validity, performance, construction and effect of this Agreement shall
be governed by the laws of the State of New York, USA for the determination of
any controversy whatsoever arising under or in connection with this Agreement.
Any legal action or proceeding with respect to this Agreement or any matters
arising out of or in connection with this Agreement or otherwise, and any action
for enforcement of any judgment in respect thereof shall, at the option of the
Licensor, be brought exclusively in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, Licensee hereby accepts for itself and
in respect of its property, generally and unconditionally, the jurisdiction of
the aforesaid courts and appellate courts thereof. Licensee irrevocably
consents to
14<PAGE>
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, or by recognized international express courier or delivery
service, to Licensee at its address referred to in Subsection 13.2 hereof. In
addition, Licensee hereby designates CT Corporation System, 1633 Broadway, New
York, New York, 10019 as Licensee's agent for service of process, and service
upon Licensee shall be deemed to be effective upon service of CT Corporation
System as aforesaid or of its successor designated in accordance with the
following sentence. Licensee may designate another corporate agent or law firm
reasonably acceptable to Licensor and located in the Borough of Manhattan, City
of New York, as successor agent for service of process upon 30-days prior
written notice to Licensor. Licensee irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or otherwise
brought in the courts referred to above and hereby further irrevocably waives
and agrees, to the extent permitted by applicable law, not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum. Nothing herein shall affect the right of
any party hereto to serve process in any other manner permitted by law.
13.4 This Agreement shall be binding upon the successors or permitted assigns
of either party hereto.
13.5 The subject headings of the Sections of this Agreement are included for
purposes of convenience only, and shall not affect the construction or
interpretation of any of its provisions.
13.6 This Agreement constitutes the entire understanding between the parties
with respect to the subject matter hereof and may be amended only by a document
in writing subscribed by authorized signatories of the parties.
15<PAGE>
13.7 The failure of either party to insist, in any one or more instances, upon
a strict performance of any of the terms or conditions of this Agreement, or the
waiver by either party of any term, condition or right hereunder, or of any
default by the other party, shall not be deemed or construed to be a waiver by
such party of any such term, condition, right or default in any other instance.
IN WITNESS WHEREOF, the parties hereto have caused this Coatings
License Agreement to be executed by their respective officers duly authorized
thereunto, as of the date first above written.
GROW GROUP, INC.
By: /s/ Joseph M. Quinn Date: 4/21/93
________________________ _________
Joseph Quinn
Executive Vice President
MONTANA, C.A.
By: /s/ Arthur W. Broslat Date: 4/21/93
________________________ __________
Name: Arthur W. Broslat
_________________
Title: President
_________________
State of NEW YORK )
)ss.
County of NEW YORK)
On the 21st day of April, 1993 before me personally came
Joseph M. Quinn to me known, who, being by me duly sworn, did depose and say
that he resides in Prospect, Kentucky; that he is the Exec. Vice President of
Grow Group, Inc., the corporation described in and which executed the above
instrument; and that he signed his name thereto by order of the board of
directors of said corporation.
/s/ Corinne Loreto
___________________
Notary Public
16<PAGE>
State of NEW YORK )
) ss.
County of NEW YORK)
On the 21st day of April, 1993 before me personally came
Arthur W. Broslat to me known, who, being by me duly sworn, did depose and say
that he resides in Caracas, Venezuela; that he is the President of Montana,
C.A., the corporation described in and which executed the above instrument; and
that he signed his name thereto by order of the board of directors of said
corporation.
/s/ Corinne Loreto
___________________
Notary Public
17<PAGE>
APPENDIX A
LICENSED TRADEMARKS*
ABC DEVTHANE
BAR-OX ELASTOMER
BAR-RUST FLAKESHIELD
CATHA-COAT (Reg. No. 83,186) HSA
CATHA-SEAL HT
CHEMBAR KWIK-KOLOR
CHEMFAST KWIK-KURE
CHEM FIX MAXI-MIL
CHEMGARD NAPKO
CHEMGLASS NAVICOTE
CHEMLINE P-50
CHEM-TAR PRE-PRIME
CHEM-VY-KOTE PRUFCLAD
DEVALUM PRUFTHANE
DEVCHEM SEA ZONE
DEVCHLOR SEAM FIX
DEVFLEX SUPER FIX
DEVGLAS TANK FIX
DEVGRIP THIXOMASTIC
DEVGUARD 2-H
DEVMAT VYKING
DEVOE (Reg. No. 67,782) VY-KOTE
DEVPREP ZINCPRIME
DEVRAN (Reg. No. 83,188)
DEVTAR
*Only the Catha-Coat, Devoe and Devran trademarks are registered in Venezuela.
All other trademarks are registered in the United States and other
jurisdictions.
18<PAGE>
EXHIBIT 28
GROW GROUP, INC. EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
ANNUAL REPORT ON FORM 11-K
FOR THE YEARS ENDED JUNE 29, 1994 AND 1993<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [FEE REQUIRED].
For the fiscal year ended June 29, 1994
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
For the transition period from _________________ to ____________
Commission file number 1-4596
GROW GROUP, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
(A. Full title of the plan and the address of the plan if different from that
of the issuer named below).
_______________
Grow Group, Inc.
200 Park Avenue
New York, New York 10166
(B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office).
Page 1 of 19 pages
The Exhibit Index in on page 2<PAGE>
GROW GROUP, INC.
EMPLOYEE STOCK OWNERSHIP AND SAVINGS PLAN
Audited Financial Statements
and Schedules
Years ended June 29, 1994 and 1993
Contents
Report of Independent Auditors .................................... 3
Statements of Net Assets Held for the Benefit of Participants ..... 4
Statements of Changes in Net Assets Held for the
Benefit of Participants ......................................... 8
Notes to Financial Statements ..................................... 12
Schedules
Assets Held for Investment ........................................ 16
Series of Transactions in Excess of 5% of the
Current Value of Plan Assets .................................... 17
Exhibit 1 Consent of Independent Auditors ......................... 19
2<PAGE>
Report of Independent Auditors
Administrative Committee of Grow Group, Inc.
Employee Stock Ownership and Savings Plan
We have audited the accompanying statements of net assets held for the
benefit of participants of Grow Group, Inc. Employee Stock Ownership and
Savings Plan as of June 29, 1994 and 1993, and the related statements of
changes in net assets held for the benefit of participants for the years
then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the Plan's net assets available for the benefit
of participants at June 29, 1994 and 1993, and the changes in net assets
available for the benefit of participants for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of
assets held for investment as of June 29, 1994, and series of transactions
in excess of 5% of the current value of plan assets for the year then
ended, are presented for purposes of complying with the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974, and are not a required
part of the financial statements. The supplemental schedules have been
subjected to the auditing procedures applied in our audit of the 1994
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the 1994 financial statements taken as a whole.
ERNST & YOUNG LLP
November 18, 1994
3<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Net Assets Held for the
Benefit of Participants
June 29, 1994
_______________________________________
Money
Grow Stock Equity Market
Total Fund Fund Fund
_______________________________________
Assets
Cash
Investments, at fair value:
Common Stock of Grow Group, Inc.
(129,084 and 122,642 shares,
at cost of $1,476,422 and
$1,292,030, respectively) $ 2,242,835 $2,242,835
Merrill Lynch Capital Fund
(231,578 and 189,832 shares,
at cost of $6,242,775 and
$4,977,488, respectively) 6,425,474 6,425,474
Merrill Lynch USA Government
Reserve Fund (4,106,344 and
4,499,080 shares, at cost
of $4,106,344 and
$4,499,080, respectively) 4,106,344 $4,106,344
Dreyfus Capital Preservation
Fund (158,654 shares at a
cost of $158,654 in 1994) 158,654
Dreyfus Peoples Index Fund, Inc.
(8,964 shares at a cost of
$143,806 in 1994) 137,600
Galaxy U.S. Treasury Fund
(208,146 and 82,426 shares,
at a cost of $208,146 and
$82,426, respectively) 208,146 27,444 108,737 67,480
Loans receivable from
participants 517,521
Contributions receivable from
participants 195,211 16,708 115,251 38,966
Accrued investment income 1,823 65 68 1,676
_____________________________________________
Total assets 13,993,608 2,287,052 6,649,530 4,214,466
Liabilities
Refund of contributions 59,453 200 27,590 27,090
_____________________________________________
Net assets held for the
benefit of participants $13,934,155 $2,286,852 $6,621,940 $4,187,376
_____________________________________________
_____________________________________________
See notes to financial statements.
4<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Net Assets Held for the
Benefit of Participants
June 29, 1994
_______________________________________
Collective
Investment Index Loan
Fund Fund Fund
_______________________________________
Assets
Cash
Investments, at fair value:
Common Stock of Grow Group, Inc.
(129,084 and 122,642 shares,
at cost of $1,476,422 and
$1,292,030, respectively)
Merrill Lynch Capital Fund
(231,578 and 189,832 shares,
at cost of $6,242,775 and
$4,977,488, respectively)
Merrill Lynch USA Government
Reserve Fund (4,106,344 and
4,499,080 shares, at cost
of $4,106,344 and
$4,499,080, respectively)
Dreyfus Capital Preservation
Fund (158,654 shares at a
cost of $158,654 in 1994) $158,654
Dreyfus Peoples Index Fund, Inc.
(8,964 shares at a cost of
$143,806 in 1994) $137,600
Galaxy U.S. Treasury Fund
(208,146 and 82,426 shares,
at a cost of $208,146 and
$82,426, respectively) 4,485
Loans receivable from
participants $517,521
Contributions receivable from
participants 7,794 16,492
Accrued investment income 6 8
_____________________________________________
Total assets 166,454 158,585 517,521
Liabilities
Refund of contributions 4,573
_____________________________________________
Net assets held for the
benefit of participants $161,881 $158,585 $517,521
_____________________________________________
_____________________________________________
See notes to financial statements.
5<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Net Assets Held for the
Benefit of Participants
June 29, 1993
_____________________________
Grow Stock Equity
Total Fund Fund
_______________________________
Assets
Cash $ 82,298 $ 12,883 $ 69,415
Investments, at fair value:
Common Stock of Grow Group, Inc.
(129,084 and 122,642 shares,
at cost of $1,476,422 and
$1,292,030, respectively) $ 2,069,584 $2,069,584
Merrill Lynch Capital Fund
(231,578 and 189,832 shares,
at cost of $6,242,775 and
$4,977,488, respectively) 5,338,074 5,338,074
Merrill Lynch USA Government
Reserve Fund (4,106,344 and
4,499,080 shares, at cost
of $4,106,344 and
$4,499,080, respectively) 4,499,080
Dreyfus Capital Preservation
Fund (158,654 shares at a
cost of $158,654 in 1994)
Dreyfus Peoples Index Fund, Inc.
(8,964 shares at a cost of
$143,806 in 1994)
Galaxy U.S. Treasury Fund
(208,146 and 82,426 shares,
at a cost of $208,146 and
$82,426, respectively) 82,426 108 82,318
Loans receivable from
participants 306,844
Contributions receivable from
participants 130,790 13,106 68,244
Accrued investment income 3,844 537 1,866
____________________________________
Total assets 12,512,940 2,096,218 5,559,917
Liabilities
Refund of contributions 97,519 1,293 49,224
____________________________________
Net assets held for the
benefit of participants $12,415,421 $2,094,925 $5,510,693
____________________________________
____________________________________
See notes to financial statements.
6<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Net Assets Held for the
Benefit of Participants
June 29, 1993
_______________________________________
Money
Market Loan
Fund Fund
_______________________________________
Assets
Cash
Investments, at fair value:
Common Stock of Grow Group, Inc.
(129,084 and 122,642 shares,
at cost of $1,476,422 and
$1,292,030, respectively)
Merrill Lynch Capital Fund
(231,578 and 189,832 shares,
at cost of $6,242,775 and
$4,977,488, respectively)
Merrill Lynch USA Government
Reserve Fund (4,106,344 and
4,499,080 shares, at cost
of $4,106,344 and
$4,499,080, respectively) $4,499,080
Dreyfus Capital Preservation
Fund (158,654 shares at a
cost of $158,654 in 1994)
Dreyfus Peoples Index Fund, Inc.
(8,964 shares at a cost of
$143,806 in 1994)
Galaxy U.S. Treasury Fund
(208,146 and 82,426 shares,
at a cost of $208,146 and
$82,426, respectively)
Loans receivable from
participants $306,844
Contributions receivable from
participants 49,440
Accrued investment income 1,441
_____________________________________________
Total assets 4,549,961 306,844
Liabilities
Refund of contributions 47,002
_____________________________________________
Net assets held for the
benefit of participants $ 4,502,959 $306,844
_____________________________________________
_____________________________________________
See notes to financial statements.
7<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Changes in Net Assets
Held for the Benefit of Participants
Year Ended June 29, 1994
____________________________________________
Money
Grow Stock Equity Market
Total Fund Fund Fund
____________________________________________
Additions
Contributions from
employees $ 2,128,066 $ 217,021 $1,148,459 $668,548
Income from investments:
Dividend income 418,197 33,512 384,685
Interest income 239,339 565 1,511 207,190
Net realized and unrealized
appreciation (depreciation)
in fair value of
investments (30,196) 36,723 (60,712)
_____________________________________________
Total additions 2,755,406 287,821 1,473,943 875,738
Deductions
Withdrawals and
distributions (1,236,672) (177,859) (616,179) (442,634)
Interfund transfers, net 81,965 253,483 (748,687)
_____________________________________________
Total additions
(deductions) (1,236,672) (95,894) (362,696)(1,191,321)
_____________________________________________
Net additions
(deductions) 1,518,734 191,927 1,111,247 (315,583)
Net assets held for
the benefit of
participants at
beginning of year 12,415,421 2,094,925 5,510,693 4,502,959
_____________________________________________
Net assets held for
the benefit of
participants at
end of year $13,934,155 $2,286,852 $6,621,940 $4,187,376
_____________________________________________
_____________________________________________
See notes to financial statements.
8<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Changes in Net Assets
Held for the Benefit of Participants
Year Ended June 29, 1994
_______________________________________
Collective
Investment Index Loan
Fund Fund Fund
_______________________________________
Additions
Contributions from
employees $ 31,809 $ 62,229
Income from investments:
Dividend income
Interest income 2,388 18 $ 27,667
Net realized and unrealized
appreciation (depreciation)
in fair value of
investments (6,207)
________________________________________
Total additions 34,197 56,040 27,667
Deductions
Withdrawals and
distributions
Interfund transfers, net 127,684 102,545 183,010
_____________________________________________
Total additions
(deductions) 127,684 102,545 183,010
_____________________________________________
Net additions
(deductions) 161,881 158,585 210,677
Net assets held for
the benefit of
participants at
beginning of year - - 306,844
_____________________________________________
Net assets held for
the benefit of
participants at
end of year $161,881 $158,585 $517,521
_____________________________________________
_____________________________________________
See notes to financial statements.
9<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Changes in Net Assets
Held for the Benefit of Participants
Year Ended June 29, 1993
______________________________
Grow Stock Equity
Total Fund Fund
______________________________
Additions
Contributions from
employees $ 1,658,211 $ 163,293 $ 827,197
Income from investments:
Dividend income 295,659 22,076 273,583
Interest income 161,483 827 2,353
Net realized and unrealized
appreciation (depreciation)
in fair value of
investments 704,478 527,230 177,248
__________________________________
Total additions 2,819,831 713,426 1,280,381
Deductions
Withdrawals and
distributions (621,060) (79,585) (90,505)
Interfund transfers, net (106,157) 629,614
__________________________________
Total additions
(deductions) (621,060) (185,742) 539,109
__________________________________
Net additions
(deductions) 2,198,771 527,684 1,819,490
Net assets held for
the benefit of
participants at
beginning of year 10,216,650 1,567,241 3,691,203
__________________________________
Net assets held for
the benefit of
participants at
end of year $12,415,421 $2,094,925 $5,510,693
__________________________________
__________________________________
See notes to financial statements.
10<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Statements of Changes in Net Assets
Held for the Benefit of Participants
Year Ended June 29, 1993
_______________________________________
Money
Market Loan
Fund Fund
_______________________________________
Additions
Contributions from
employees $ 667,721
Income from investments:
Dividend income
Interest income 131,242 $ 27,061
Net realized and unrealized
appreciation (depreciation)
in fair value of
investments
_____________________________________________
Total additions 798,963 27,061
Deductions
Withdrawals and
distributions (450,970)
Interfund transfers, net (471,508) (51,949)
_____________________________________________
Total additions
(deductions) (922,478) (51,949)
_____________________________________________
Net additions
(deductions) (123,515) (24,888)
Net assets held for
the benefit of
participants at
beginning of year 4,626,474 331,732
_____________________________________________
Net assets held for
the benefit of
participants at
end of year $ 4,502,959 $306,844
_____________________________________________
_____________________________________________
See notes to financial statements.
11<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Notes to Financial Statements
June 29, 1994
A. Significant Accounting Policies
The financial statements of Grow Group, Inc. Employee Stock Ownership and
Savings Plan (the "Plan") have been prepared on the accrual basis in
accordance with generally accepted accounting principles.
All costs of administration and fees are paid by the sponsor, Grow Group,
Inc. (the "Company").
Temporary investments are valued at cost which approximates fair value.
Common Stock of Grow Group, Inc. is valued at the market price on the last
business day of the Plan year. The fair value of the shares of the Merrill
Lynch Capital Fund, the Merrill Lynch USA Government Reserve Fund, Dreyfus
Capital Preservation Fund, Dreyfus Peoples Index Fund, Inc. and the Galaxy
U.S. Treasury Fund is based on the quoted redemption value on the last
business day of the Plan year. Securities transactions are accounted for
on the trade dates.
Net realized and unrealized appreciation (depreciation) in fair value of
investments included in the statements of changes in net assets held for
the benefit of participants includes investments bought, sold, as well as
held during the year.
B. Description of the Plan
As originally adopted, the Plan consisted of an Employee Stock Ownership
Program ("PAYSOP"), as well as a Savings Program ("Savings Program").
The PAYSOP was a payroll-based tax credit employee stock ownership program
under which the Company made discretionary contributions of up to 1/2 of 1%
of total remuneration, as defined in the Plan within the limits of the
Internal Revenue Code of 1986, as amended. The Tax Reform Act of 1986
eliminated the tax credit which had been available for employer
contributions to the PAYSOP. As a result, PAYSOP contributions were
suspended effective January 1, 1987. The PAYSOP contributions are fully
vested.
12<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Notes to Financial Statements (continued)
B. Description of the Plan (continued)
The Savings Program enables eligible employees to elect to defer, on a
before-tax basis, up to 16% (in increments of 1%), or such lower percentage
approved by the Administrative Committee, of their compensation (as
defined) through salary reduction contributions ("Salary Reduction
Contributions"), provided that the sum of such Salary Reduction
Contributions (and elective contributions by a participant to other plans)
may not exceed $9,240 (as adjusted to date by the Secretary of the
Treasury) per calendar year. Additionally, until June 30, 1987, eligible
employees had the option of making contributions, on a post-tax basis, of
up to an additional 10% of their compensation, as defined ("Additional
Contributions").
All amounts in employee accounts maintained under the Savings Program
(including Additional Contributions made prior to their suspension) may be
invested in one or more of the five funds described below. PAYSOP
contributions made prior to suspension remain invested in Grow Group, Inc.
Common Stock. All contributions are 100% vested. Participants in the
Savings Program can withdraw their before-tax contributions and earnings
through June 29, 1994 thereon from their respective accounts only if all
after-tax contributions and earnings thereon have been withdrawn and the
participant has reached age 59-1/2, has become permanently and totally
disabled, has suffered financial hardship or has terminated employment.
Withdrawals of Additional Contributions and earnings thereon can be made at
any time with notice.
The Galaxy U.S. Treasury Fund invests in short-term highly liquid U.S.
Government and Agency obligations. All contributions flow through this
fund before being transferred to the investment choices of the
participants.
The Plan also provides that loans may be made to participants. These loans
are included in the Loan Fund. Loans may only be made to participants of
amounts, within specified limits, contained in their accounts under the
Savings Program.
13<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Notes to Financial Statements (continued)
B. Description of the Plan (continued)
Participants may elect to have their Savings Program contribution invested
in one or more of the following funds:
Grow Stock Fund - Invested in Grow Group, Inc. Common Stock purchased
in the open market.
Equity Fund - Invested in shares of Merrill Lynch Capital Fund. The
fund seeks to achieve the highest total investment return consistent
with prudent risk through a fully managed investment policy utilizing
equity, debt and convertible securities.
Money Market Fund - Invested in shares of Merrill Lynch USA Government
Reserve Fund. The objective is to seek preservation of capital,
current income and liquidity from investing in a diversified portfolio
of short-term marketable securities, including variable rate
securities, which are direct obligations of the U.S. Government and
repurchase agreements and purchase and sale contracts pertaining to
such securities.
Collective Investment Fund - Invested in shares of Dreyfus Capital
Preservation Fund. The fund seeks high current income and stability
of principal by investing in a portfolio consisting of guaranteed
investment contracts ("GICs") and other similar investments.
Index Fund - Invested in shares of Dreyfus Peoples Index Fund, Inc.
The fund seeks to provide investment results that correspond to the
price and yield performance of publicly traded common stocks in the
aggregate, as represented by the Standard & Poors 500 Composite Price
Index.
Company contributions under the PAYSOP provisions were made in the form of
cash or Company Common Stock. Cash contributions were used to purchase
Common Stock in the open market.
14<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Notes to Financial Statements (continued)
C. Tax Status
The Internal Revenue Service has ruled that the Plan qualifies under
Section 401(a) of the Internal Revenue Code (the "Code"), and its related
trust is, therefore, exempt from Federal income tax under Section 501(a) of
the Code. The Plan is operating in accordance with Internal Revenue
Service procedures which provide that a qualified plan need not be amended
to conform to the Tax Reform Act of 1986 and the tax acts thereafter, until
the last day of its first plan year beginning after December 31, 1993. The
Plan is operating in accordance with such acts, and plan amendments will
apply retroactively to the date when changes in the law under such acts are
effective. An employee will not be subject to Federal income tax on
contributions, when made, or on the earnings of the employee's account when
earned. Generally, an employee will be subject to Federal income tax on
distributions or withdrawals from employee accounts related to the PAYSOP
and Salary Reduction contributions and earnings on all contributions. The
Administrative Committee is not aware of any course of action or series of
events that might adversely affect the qualified status of the Plan.
15<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Assets Held for Investment
June 29, 1994
Number of
Description of Investment Shares/Units Cost Market Value
_______________________________________________________________________
Grow Group, Inc. Common Stock 129,084 $ 1,476,422 $ 2,242,835
Merrill Lynch Capital Fund 231,578 6,242,775 6,425,474
Merrill Lynch USA Government
Reserve Fund 4,106,344 4,106,344 4,106,344
Dreyfus Capital Preservation
Fund 158,654 158,654 158,654
Dreyfus Peoples Index Fund, Inc. 8,964 143,806 137,600
Galaxy U.S. Treasury Fund 208,146 208,146 208,146
Loans receivable from participants * 517,521 517,521
__________________________
$12,853,668 $13,796,574
__________________________
__________________________
*Detail list available upon request.
16<PAGE>
Grow Group, Inc.
Employee Stock Ownership and Savings Plan
Series of Transactions in Excess of 5% of the Current Value of Plan Assets
Year ended June 29, 1994
Cost
Units/ Purchase Selling of Net Gain
Description of Assets Shares Price* Price* Assets (Loss)
___________________________________________________________________________
Category (iii) - A series of
transactions with respect
to securities of the same
issue, which amount in the
aggregate to more than 5%
of the current value of
total plan assets:
Merrill Lynch USA
Government Reserve
Fund 2,575,307 $2,575,307 $2,575,307
2,968,043 $2,968,043 2,968,043
Merrill Lynch
Capital Fund 79,752 2,238,658 2,238,658
38,006 1,168,879 973,371 $195,508
Galaxy U.S.
Treasury Fund 6,874,298 6,874,298 6,874,298
6,748,578 6,748,578 6,748,578
Note - There were no category (i), (ii) or (iv) transactions during the
year ended June 29, 1994.
*Current value of asset on transaction date is equal to respective purchase
or selling price.
17<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of the Grow Group, Inc. Employee Stock Ownership
and Savings Plan has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
Grow Group, Inc. Employee Stock
Ownership and Savings Plan
(Name of Plan)
Date: December 21, 1994 By: /s/ Frank V. Esser
__________________________________
Frank V. Esser, Plan Administrator
and Member of the Administrative
Committee
18<PAGE>
EXHIBIT 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
No. 33-25755 (the Prospectus in which also relates to Registration
Statement No. 2-91262) on Form S-8 pertaining to the Grow Group, Inc.
Employee Stock Ownership and Savings Plan of our report dated November 18,
1994 on the financial statements of the Grow Group, Inc. Employee Stock
Ownership and Savings Plan included in this Annual Report (Form 11-K) for
the year ended June 29, 1994.
ERNST & YOUNG LLP
December 21, 1994
19<PAGE>
