<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Fiscal Year Ended November 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Transition Period from _____ to _____
Commission File number 0-11631
JUNO LIGHTING, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2852993
- ------------------------------- ------------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
1300 S. Wolf Road
P.O. Box 5065
Des Plaines, Illinois 60017-5065
Registrant's telephone number, including area code: (847) 827-9880
---------------------------------
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
Common Share Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___.
Indicate 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. Yes X No__.
Aggregate market value of voting stock held by non-affiliates of the registrant,
based upon the price of the stock as reported by the National Association of
Securities Dealers Automated Quotations System, on March 15, 1999: $373,537,688
At March 15, 1999, 18,597,027 shares of common stock were outstanding.
Documents Incorporated by Reference: None
<PAGE> 2
The undersigned registrant hereby amends its Form 10-K for the fiscal
year ended November 30, 1998, as follows:
PART III, Items 10-12 are hereby amended as follows:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
INFORMATION CONCERNING DIRECTORS AND OFFICERS
There are currently five directors on the Board of Directors ("Board")
of Juno Lighting, Inc. (the "Company"). The directors are divided into three
classes; the term of office of one class expires at each Annual Meeting of
Stockholders. The persons listed below as nominees to be elected as directors
have been recommended by the Board and, if elected, will serve for a term ending
at the 2002 Annual Meeting of Stockholders or until their successors are elected
and qualified.
The names of the nominees, along with the names of the other directors
whose terms continue after the meeting, together with certain additional
information, are set forth below. Additional information includes business
experience during the last five years and other directorships currently held
with corporations whose securities are registered under Section 12 of the
Securities Exchange Act of 1934 and certain other corporations. To the knowledge
of the Company, there are no family relationships between any director or
executive officer and any other director or executive officer. None of the
directors has been involved in any legal proceedings of the nature described in
Item 401(f) of Regulation S-K.
NOMINEES
George M. Ball.................Age 64. Director since 1991.
Term expires 1999. Member of Compensation, Stock
Option and Audit Committees.
Business experience during the last five years:
Chairman, Philpott, Ball & Co., an investment
banking firm, from January, 1991 to the
present.
Other Directorships: B.B. Walker Company and Edo
Corporation
Thomas W. Tomsovic.............Age 57. Vice President, Operations. Director
since 1986.
Term expires 1999.
Business experience during the last five years:
Vice President, Operations of the Company.
Other Directorships: None
-2-
<PAGE> 3
OTHER DIRECTORS
Allan Coleman..................Age 73. Director since 1983.
Term expires 2000. Member of Compensation, Stock
Option and Audit Committees.
Business experience during the last five years:
Chairman, Coleman International, Inc., an
international trading company, from August,
1994 to present; and Chairman, Coleman Cable
Systems, Inc., a manufacturer of electric wire
and cable, from January, 1989 to August, 1994.
Other Directorships: None
Robert S. Fremont..............Age 74. Chairman of the Board and Chief Executive
Officer. Director since 1976.
Term expires 2001. Member of Stock Option
Committee.
Business experience during the last five years:
Chairman of the Board and Chief Executive
Officer since December 1, 1994. President of
the Company from 1976 to November 30, 1994.
Other Directorships: None
Julius Lewis...................Age 67. Secretary. Director since 1983.
Term expires 2001. Member of Compensation, Stock
Option and Audit Committees.
Business experience during the last five years:
Partner, Sonnenschein Nath & Rosenthal, outside
legal counsel for the Company.
Other Directorships: None
Information regarding the executive officers of the Company is set
forth on pages 9 and 10 in Part I of the Form 10-K filed with the Commission on
February 25, 1999, and is incorporated herein by reference.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the Company's outstanding common
stock ("Common Stock"), to file reports of ownership and changes in ownership of
such securities with the Securities and Exchange Commission (the "SEC").
Officers, directors and greater-than-10% beneficial owners are required to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely upon a review of the copies of the forms furnished to the Company, and/or
written representations from certain reporting persons that no other reports
were required, the Company believes that all Section 16(a) filing requirements
applicable to its officers, directors and 10% beneficial owners during or with
respect to the year ended November 30, 1998 were met, with the exception that
Company executive officer Charles Huber reported one transaction in a
Section 16(a) filing, that was due on April 10, 1998, three days late because of
an administrative oversight.
-3-
<PAGE> 4
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following Summary Compensation Table includes individual
compensation information regarding all compensation awarded to, earned by, or
paid during the fiscal years ended November 30, 1998, 1997 and 1996 to the
Company's Chief Executive Officer, Mr. Fremont and the four other most highly
compensated executive officers in the fiscal year ended November 30, 1998 in all
capacities in which they served during the years in which they have been
executive officers.
As reflected in the following table, Mr. Fremont and the four other
most highly paid executive officers of the Company currently participate in the
Company's 401(k) Plan. In addition, the named executives participate in, and
(except for Mr. Fremont) have received grants under, the Company's Stock Option
Plans, effective July 18, 1983 (the "1983 Stock Option Plan") and December 2,
1993 (the "1993 Stock Option Plan"). No option grants were made to any of such
named executive officers in the fiscal year ended November 30, 1998.
<TABLE>
<CAPTION>
====================================================================================================================================
SUMMARY COMPENSATION TABLE
====================================================================================================================================
Annual Long-Term
Compensation Compensation
- ------------------------------------------------------------------------------------------------------------------------------------
Awards
Name & Options All Other
Principal Position Year Salary Bonus (# of Shares) Compensation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert S. Fremont
Chairman of the Board 1998 $504,400 $ -- -- $ 21,479(F2)
and Chief Executive 1997 504,400 -- -- 17,504(F3)
Officer 1996 504,000 -- -- 30,000(F4)
- ------------------------------------------------------------------------------------------------------------------------------------
Glenn R. Bordfeld 1998 $186,539(F5) $23,491 -- $ 12,000
President and Chief 1997 176,154 -- -- 9,750
Operating Officer 1996 166,346 -- -- 9,750
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas W. Tomsovic 1998 $230,000 $23,491 -- $ 12,000
Vice President, 1997 220,000 -- -- 9,750
Operations 1996 210,000 -- -- 9,750
- ------------------------------------------------------------------------------------------------------------------------------------
George J. Bilek 1998 $186,539 $23,491 -- $ 12,000
Vice President, Finance 1997 176,154 -- -- 9,750
and Treasurer 1996 165,481 -- -- 9,750
- ------------------------------------------------------------------------------------------------------------------------------------
Charles F. Huber 1998 $190,721 $23,491 -- $ 12,000
Vice President, Corporate 1997 180,077 -- -- 9,750
Development 1996 169,471 -- -- 9,750
====================================================================================================================================
</TABLE>
(F1) Includes the Company's matching and discretionary contributions under
the 401(k) Plan. Amounts are included without regard to vesting of any
Company discretionary contributions.
(F2) Includes $9,479 for miscellaneous personal expenses.
-4-
<PAGE> 5
(F3) Includes $7,754 for miscellaneous personal expenses.
(F4) Includes $20,250 for miscellaneous personal expenses.
(F5) Mr. Bordfeld became the Company's President and Chief Operating Officer
on January 19, 1999.
STOCK OPTION PLAN EXERCISES AND YEAR-END VALUE TABLE
The following table discloses, for each of the executive officers
listed, information regarding stock options exercised during, or held at the end
of, the fiscal year ended November 30, 1998 pursuant to the Company's 1983 and
1993 Stock Option Plans.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
===================================================================================================================================
TOTAL VALUE OF
TOTAL NUMBER OF UNEXERCISED IN-THE-MONEY
UNEXERCISED OPTIONS HELD OPTIONS HELD AT FISCAL YEAR
NUMBER OF AT FISCAL YEAR END (F1) (F1)(F2)
SHARES ACQUIRED -----------------------------------------------------------------------
NAME ON EXERCISE Value Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Fremont -- $0 0 0 $0 $0
- -----------------------------------------------------------------------------------------------------------------------------------
G. Bordfeld 12,000 45,250 4,000 4,000 25,375 35,750
- -----------------------------------------------------------------------------------------------------------------------------------
T. Tomsovic -- 0 16,000 4,000 91,125 35,750
- -----------------------------------------------------------------------------------------------------------------------------------
G. Bilek -- 0 16,000 4,000 91,125 35,750
- -----------------------------------------------------------------------------------------------------------------------------------
C. Huber -- 0 16,000 4,000 91,125 35,750
===================================================================================================================================
</TABLE>
(F1) All options outstanding at the end of the fiscal year ended November
30, 1998, are incentive stock options and were granted at 100% of
the fair market value of the Company's Common Stock on the date of
the grant. For all such options, up to 20% of the shares covered by
each option may be purchased commencing on the first anniversary of
the date of the grant and the amount increases by 20% on each
anniversary thereafter. Such options will expire at various dates
between December 9, 2003 and October 19, 2008. For incentive stock
options granted after December 31, 1986, the aggregate fair market
value of Common Stock with respect to which Incentive Stock Options
become exercisable for the first time by any individual grantee
during any calendar year may not exceed $100,000.
(F2) Total value of options is based on the difference between the fair
market value of Company Common Stock of $23.375, as of November 30,
1998, and the exercise price per share of the options.
COMPENSATION OF DIRECTORS
-5-
<PAGE> 6
Directors who are not employees of the Company are compensated at the
rate of $1,000 per Board of Directors meeting attended.
SUMMARY OF CHANGE IN CONTROL BENEFIT ARRANGEMENTS
The Board has approved and the Company has entered into agreements
with the following named executive officers of the Company: Glenn R. Bordfeld,
Thomas W. Tomsovic, George J. Bilek and Charles W. Huber. These agreements
provide for severance and other benefits in the event of a change of control of
the Company and in the event of certain terminations of employment under
employment contracts beginning upon the change of control and ending upon six
months notice from the Company, but no earlier than December 31, 2000. Some
benefits would be provided immediately upon the change of control. Severance
benefits for termination of employment after the change of control would be
payable only if an executive's employment is terminated by the Company without
"cause" or by the executive for "good reason". For this purpose, good reason
includes material adverse changes in duties, reduction in salary, or a required
move of more than 40 miles. "Cause," for these purposes, means commission of
certain felonies, substance abuse, and serious misconduct or neglect in the
course of duties.
At the time of a change of control, the principal benefits that would
be provided include (i) an employment contract with (A) a 5% minimum annual base
salary increase, (B) no adverse change in duties, (C) no required move of more
than 40 miles, and (D) participation in benefit and welfare plans; (ii) a
transaction bonus of $150,000; (iii) a performance bonus based on projected
operating income for the year of the change of control, prorated for the portion
of the year elapsed prior to a change of control, and multiplied by 115%; and
(iv) all unvested stock options would become vested and exercisable.
The principal benefits that would be provided as severance benefits
upon termination by the executive for good reason or by the Company other than
for cause or disability include (i) a lump sum payment equal to the greater of
(x) six months' base salary or (y) the base salary through December 31, 2000;
(ii) a payment equal to forfeited retirement benefits, if any; and (iii)
continuation of medical, dental, life insurance, and other fringe benefits for
the greater of (x) six months or (y) until December 31, 2000. In addition, the
agreements provide reimbursement of legal fees for an executive's good faith
enforcement of the agreements, regardless of whether the executive prevails. The
benefits are capped at the maximum amount payable without triggering excise tax
under the golden parachute provisions of the Internal Revenue Code.
In general, a "change of control" is one or more of the following
events: (i) the acquisition by any person of 20% or more of the Company Common
Stock or the shares of the Company entitled to vote representing 20% or more of
the combined voting power of all Company shares entitled to vote; (ii) the
occurrence of certain changes in the composition of the Board not approved by
the incumbent board; (iii) the stockholder approval of certain mergers or
similar transactions with respect to which the those who were the respective
beneficial owners of the Company Common Stock and shares of the Company entitled
to vote prior to such merger or transaction do not beneficially own more than
80% of, respectively, the common stock and the combined voting power of the
shares entitled to vote of the surviving corporation; or (iv) the stockholder
approval of the sale or disposition of all or substantially all of the Company's
assets.
The foregoing is only a summary, and it is qualified in its entirety
by reference to the form of Change of Control Benefits Agreement attached hereto
as Exhibit 10.8.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
-6-
<PAGE> 7
Mr. Fremont is a member of the Board and an executive officer of the
Company. Mr. Lewis is a Board member and an officer of the Company but not an
executive officer. Mr. Coleman and Mr. Ball are members of the Board but are not
executive officers or officers of the Company. Other than the Compensation
Committee members and Mr. Fremont, who attends meetings of the Compensation
Committee at the request of the Compensation Committee and makes recommendations
regarding the compensation level of executive officers other than himself, no
current or former officer or employee of the Company or its subsidiaries
participated in the deliberations of the Board concerning executive compensation
during the fiscal year ended November 30, 1998. Mr. Lewis is a partner of the
law firm of Sonnenschein Nath & Rosenthal, which provided legal services to the
Company in the fiscal year ended November 30, 1998, and Mr. Ball is the Chairman
of Philpott, Ball & Co., an investment banking firm which provided investment
banking services to the Company in such fiscal year.
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE REPORTS ON EXECUTIVE
COMPENSATION
The Company's executive compensation policy is designed to maintain a
competitive compensation program in order to attract and retain well qualified
management and to provide management with the incentive to accomplish the
Company's financial and operating objectives. Compensation for executives
generally consists of cash compensation in the form of annual base salary and
performance-based bonuses, and long-term incentive compensation in the form of
stock options.
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors and, with respect to stock
options and stock appreciation rights ("SARs") under the Company's Stock Option
Plans, by the Stock Option Committee. The Stock Option Committee has four
members (consisting of the CEO and three outside directors), and in fiscal 1998
met together once. The Compensation Committee has three members (consisting of
the three outside directors), and in fiscal 1998 met once.
In setting cash compensation levels for executive officers (including
the CEO), the Compensation Committee considers the performance of the Company
and of the individual officer, including the assumption of new duties by the
officer. While the Company's overall financial performance, particularly
operating income, is taken into account, base salaries for executive officers
are primarily determined by the Compensation Committee's subjective assessment
of the executive's individual performance. The Compensation Committee does not
set target bonuses or target performance goals in setting cash compensation
levels for executive officers.
In addition to base salary, the Compensation Committee has an
incentive bonus plan applicable to the following officers of the Company: Thomas
W. Tomsovic, Glenn R. Bordfeld, George J. Bilek, Charles F. Huber, Scott L.
Roos, and Joel W. Chemers. The incentive bonus plan provided for the payment of
cash bonuses to these executives pursuant to a formula based on increases in
operating income of the Company. The Company paid bonuses earned in fiscal 1998
pursuant to this plan to Thomas W. Tomsovic, Glenn R. Bordfeld, George J. Bilek,
Charles F. Huber, and Joel W. Chemers.
In determining the salary to be paid to the CEO in any fiscal year,
in addition to the factors set forth above, which are applicable to all
executive officers, the Compensation Committee also compares base salaries of
chief executive officers of other companies of similar size and engaged in
manufacturing businesses to that of the Company's CEO and considers the
performance of the Company's Common Stock.
-7-
<PAGE> 8
Some, but not all, of the companies used for salary comparison purposes are
companies listed in the NASDAQ Electrical Component Index for which cumulative
total return information is provided in the "Performance Graph" section below.
Although the Compensation Committee takes into account all of the factors
described above in determining an appropriate base salary for Mr. Fremont, it
does not engage in any particular weighing of these factors (other than the
emphasis placed on individual performance). The success of the Company in
meeting its financial goals is not one of the factors that the Compensation
Committee considers in determining the CEO's base salary. It should be noted
that Mr. Fremont does not participate in Compensation Committee discussions or
decisions regarding his compensation.
Pursuant to the authority delegated by the Board of Directors, the
Stock Option Committee is responsible for granting and administering stock
options and SARs under the Company's Stock Option Plans. Stock options and SARs
are designed to align the interests of executives with those of the
stockholders. No member of the Stock Option Committee (including Mr. Fremont) is
eligible to receive stock options or SARs.
Under the Company's 1993 Stock Option Plan, stock options have been
awarded to certain key employees, including the Company's executive officers.
All currently outstanding stock options were granted with an exercise price
equal to the market price of the Common Stock on the date of grant and vest over
a period of time. This approach is designed to encourage the creation of
stockholder value over the long term since the full benefit of the compensation
package generally cannot be realized unless stock price appreciation occurs over
a number of years. The Stock Option Committee determines the size of awards of
stock options and SARs to executives based on similar factors as are used to
determine base salaries.
In addition to salary, stock options and SARs, the Company's
compensation package includes Company matching and discretionary contributions
to a 401(k) plan, medical and life insurance, and other benefits.
Finally, the Compensation Committee reviews the possible effect on
the Company of the limitations on deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code. The Compensation Committee does not
believe that such section will be applicable to the Company in the foreseeable
future but will review the Company's compensation practices as circumstances
warrant.
COMPENSATION & AUDIT STOCK OPTION COMMITTEE
COMMITTEES
Julius Lewis Robert S. Fremont
Allan Coleman Julius Lewis
George M. Ball Allan Coleman
George M. Ball
-8-
<PAGE> 9
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN
AMONG JUNO LIGHTING, INC., NASDAQ STOCK MARKET INDEX
(U.S. COMPANIES) AND NASDAQ ELECTRICAL COMPONENT
STOCK INDEX(F1)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Juno NASDAQ Stock NASDAQ Electrical
Fiscal Year Lighting, Inc. Market Index (U.S.) Component Index
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
11/30/93 100.00 100.00 100.00
- -------------------------------------------------------------------------------------------------------------------
11/30/94 87.95 100.20 112.38
- -------------------------------------------------------------------------------------------------------------------
11/30/95 78.88 142.87 207.24
- -------------------------------------------------------------------------------------------------------------------
11/30/96 78.61 174.91 322.20
- -------------------------------------------------------------------------------------------------------------------
11/30/97 99.59 217.89 378.58
- -------------------------------------------------------------------------------------------------------------------
11/30/98 123.11 267.19 469.62
===================================================================================================================
</TABLE>
(F1) Cumulative return assumes reinvestment of dividends. This table
assumes $100.00 was invested in Juno Common Stock, the NASDAQ Stock
Market Index (U.S.) and the NASDAQ Electrical Component Index on
November 30, 1993.
The stock price performance depicted in the foregoing performance graph is not
necessarily indicative of future price performance. This performance graph shall
not be deemed to be incorporated by reference in any filing by the Company under
the Securities Act of 1933 or the Securities Exchange Act of 1934.
-9-
<PAGE> 10
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 15, 1999, the number and
percentage of outstanding shares of Common Stock beneficially owned by each
person known to the Company to be the beneficial owner of more than five percent
of the outstanding shares of Common Stock.
<TABLE>
<CAPTION>
=============================================================================================================
SHARES
BENEFICIALLY PERCENTAGE OF
NAME AND ADDRESS OWNED SHARES OUTSTANDING
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Harris Associates L.P.
Two North LaSalle Street, Suite 500
Chicago, Illinois 60602-3790................................ 1,742,700(F1) 9.37%
- -------------------------------------------------------------------------------------------------------------
National Rural Electric Cooperative
Association
4301 Wilson Blvd.
Arlington, Virginia 22203................................... 1,340,000(F2) 7.21%
- -------------------------------------------------------------------------------------------------------------
LENS Investment Management, LLC
1200 G Street, N.W., Suite 800
Washington, D.C. 30005..................................... 1,214,908(F3) 6.53%
- -------------------------------------------------------------------------------------------------------------
Royce & Associates, Inc., Royce Management
Company and Charles M. Royce
1414 Avenue of the Americas
New York, New York 10019.................................... 975,800(F5) 5.25%
- -------------------------------------------------------------------------------------------------------------
Bank One Corporation
One First National Plaza
Chicago, Illinois 60670..................................... 945,800(F4) 5.09%
=============================================================================================================
</TABLE>
(F1) Harris Associates L.P. ("Harris") beneficially owns 1,742,700 shares,
has shared power to vote or direct the votes of such shares, has sole
power to dispose or direct the disposition of 581,400 shares and has
shared power to dispose or direct the disposition of 1,161,300 shares
of which 1,085,000 shares are owned by the Oakmark Fund, an
investment trust whereby Harris serves as investment advisor.
(F2) National Rural Electric Cooperative Association beneficially owns
1,340,000 shares, has sole power to vote or direct the vote and
dispose or direct the disposition of such shares.
(F3) LENS Investment Management, LLC ("LENS") beneficially owns 1,214,908
shares, has sole power to vote or direct the vote and dispose or
direct the disposition of 835,236 shares. Ram Trust Services, Inc.
("RAM") has sole power to vote or direct the vote and dispose or
direct the disposition of 375,147 shares. Mr. Robert B. Holmes, a
client of LENS, has sole power to vote or direct the vote and dispose
or direct the disposition of
-10-
<PAGE> 11
2,800 shares. As a result of Mr. Holmes' participation in the
management and ownership of LENS, Mr. Holmes and LENS may be deemed
to be acting in concert and to have beneficial ownership of each
others' shares within the meaning of Section 13(d) of the 1934
Securities Exchange Act ("1934 Act"). Mr. John B. Goodrich, an
employee of RAM and a client of LENS, has sole power to vote and
dispose or direct the disposition of 1,725 shares. As a result of Mr.
Goodrich's status as an employee of RAM and his participation in the
ownership of RAM and in LEN'S activities relating to the shares of
Common Stock, Mr. Goodrich and LENS may be deemed to be acting in
concert and to have beneficial ownership of each others' shares
within the meaning of Section 13(d) of the 1934 Act.
(F4) Bank One Corporation ("Bank One") beneficially owns 945,800 shares
and has sole power to vote or direct the vote of 882,250 of such
shares. Bank One has sole power to dispose or to direct the
disposition of 922,300 shares and shared power to dispose or to
direct the disposition of 18,000 shares.
(F5) Royce & Associates, Inc. ("Royce") beneficially owns 949,100 shares,
has sole power to vote or direct the vote and dispose or to direct
the disposition of such shares. Royce Management Company ("RMC")
beneficially owns 26,700 shares, has sole power to vote or direct the
vote and dispose or to direct the disposition of such shares. Mr.
Royce may be deemed to be a controlling person of Royce and RMC, and,
as such, may be deemed to beneficially own the shares, beneficially
owned by Royce and RMC. Mr. Royce disclaims beneficial ownership of
such shares.
DIRECTORS' AND EXECUTIVE OFFICERS' STOCK OWNERSHIP
The following table sets forth, as of March 15, 1999, the number and
percentage of outstanding shares of Common Stock beneficially owned by each
director, each of the executive officers named in the Summary Compensation Table
and all executive officers and directors as a group. The persons named hold sole
voting and investment power with respect to the shares of Common Stock listed
below, except as otherwise indicated.
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<PAGE> 12
<TABLE>
<CAPTION>
==========================================================================================
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME OWNED OUTSTANDING
==========================================================================================
<S> <C> <C>
Robert S. Fremont (F1)............................... 619,856 3.33%
- ------------------------------------------------------------------------------------------
Glenn R. Bordfeld (F4)(F5)........................... 10,400 *
- ------------------------------------------------------------------------------------------
Thomas W. Tomsovic (F1)(F2).......................... 16,000 *
- ------------------------------------------------------------------------------------------
Julius Lewis (F3).................................... 4,000 *
- ------------------------------------------------------------------------------------------
Allan Coleman (F3)................................... 2,000 *
- ------------------------------------------------------------------------------------------
George M. Ball (F3).................................. 2,500 *
- ------------------------------------------------------------------------------------------
George J. Bilek (F4)(F6)............................. 26,350 *
- ------------------------------------------------------------------------------------------
Charles F. Huber (F4)(F7)............................ 20,800 *
- ------------------------------------------------------------------------------------------
All Directors and Executive Officers
as a group (F8).................................. 703,006 3.78%
==========================================================================================
</TABLE>
(F1) Executive Officer and Director
(F2) Represents 16,000 shares which Mr. Tomsovic has the right to acquire
within 60 days of March 15, 1999.
(F3) Director
(F4) Executive Officer
(F5) Includes 4,000 shares which Mr. Bordfeld has the right to acquire
within 60 days of March 15, 1999.
(F6) Includes 16,000 shares which Mr. Bilek has the right to acquire
within 60 days of March 15, 1999.
(F7) Includes 16,000 shares which Mr. Huber has the right to acquire
within 60 days of March 15, 1999.
(F8) Includes 53,000 shares which five executive officers have the right
to acquire within 60 days of March 15, 1999.
* Less than 1%
-12-
<PAGE> 13
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized on March 26, 1999.
JUNO LIGHTING, INC.
By: /s/ George J. Bilek
-------------------------------------
George J. Bilek
Vice President, Finance and Treasurer
-13-
<PAGE> 14
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
1 Certificate of Incorporation, as amended, of Juno
Lighting, Inc. filed as Exhibit 3.1 to the Company's
Report on Form 10-Q (SEC File No. 0-11631) for the quarter
ended May 31, 1987.
2 Agreement and Plan of Recapitalization and Merger dated as
of March 26, 1999 among Fremont Investors I, LLC, Jupiter
Acquisition Corp., and the Company, which includes (i) as
Exhibit A thereto the form of 1999 Stock Award and
Incentive Plan, (ii) as Exhibit B thereto the form of
Amended and Restated Certificate of Incorporation of the
Company and (iii) as Exhibit C thereto the form of
Management Services Agreement between Fremont Partners,
L.L.C. and the Company, filed as Exhibit 2 to the
Company's Current Report on Form 8-K (SEC File No.
0-11631) filed with the Securities and Exchange Commission
on March 29, 1999.
3.1(a) Amendment to Certificate of Incorporation of Juno
Lighting, Inc. filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-K (SEC File No. 0-11631) for the
fiscal year ended November 30, 1990.
3.2 By-Laws of Juno Lighting, Inc., as amended, filed as
Exhibit 3.2 to the Company's Annual Report on Form 10-K
(SEC File No. 0-11631) for the fiscal year ended November
30, 1987.
3.2(a) Amendment to By-Laws of Juno Lighting, Inc. filed as
Exhibit 3.1 to the Company's quarterly report on Form 10-Q
(SEC File No. 0-11631) for the quarter ended May 31, 1991.
10.1 Juno Lighting, Inc. 1993 Stock Option Plan, as amended,
filed as Exhibit 10.1 to the Company's quarterly report on
Form 10-Q (SEC File No. 0-11631) for the quarter ended May
31, 1994.
10.2 Loan Agreement dated as of December 1, 1991 by and between
Juno Lighting, Inc. and the Indiana Development Finance
Authority. Filed as Exhibit 10.1 to the Company's Annual
Report on Form 10-K (SEC File No. 0-11631) for the fiscal
year ended November 30, 1992.
10.2(a) Trust Indenture dated as of December 1, 1991 by and
between the Indiana Development Finance Authority and
First Wisconsin Trust Company, as Trustee, with respect to
Industrial Development Revenue Bonds, Series 1991 (Juno
Lighting, Inc. Project). Filed as Exhibit 10.1(a) to the
Company's Annual Report on Form 10-K (SEC File No.
0-11631) for the fiscal year ended November 30, 1992.
10.3(a) Agreement among Juno Lighting, Inc., the City of Des
Plaines and American National Bank and Trust Company of
Chicago. Filed as Exhibit 10.1 to the Company's
Registration Statement on Form S-1, made effective
September 1, 1983 (Registration No. 2-85267).
10.4 Juno Lighting, Inc. 1983 Stock Option Plan, as amended,
filed as Exhibit 10.1 to the Company's Annual Report on
Form l0-K (SEC File No. 0-11631) for the fiscal year ended
November 30, 1983.
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10.4(a) First Amendment to the Juno Lighting, Inc. 1983 Stock
Option Plan dated April 9, 1986, filed as Exhibit 10.2(a)
to the Company's Annual Report on Form 10-K (SEC File No.
0-11631) for the fiscal year ended November 30, 1986.
10.4(b) Third Amendment to the Juno Lighting, Inc. 1983
Stock Option Plan dated May 6, 1987, filed as Exhibit
10.2(b) to the Company's Annual Report on Form 10-K (SEC
File No. 0-11631) for the fiscal year ended November 30,
1987.
10.4(c) Fourth Amendment to the Juno Lighting, Inc. 1983 Stock
Option Plan dated September 24, 1987, filed as Exhibit
10.2(c) to the Company's Annual Report on Form 10-K (SEC
File No. 0-11631) for the fiscal year ended November 30,
1987.
10.4(d) Fifth Amendment to the Juno Lighting, Inc. 1983 Stock
Option Plan dated December 13, 1988, filed as Exhibit
10.2(d) to the Company's Annual Report on Form 10-K (SEC
File No. 0-11631) for the fiscal year ended November 30,
1988.
10.5 Agreement dated as of July 1, 1984 among Juno Lighting,
Inc., the City of Des Plaines, Illinois and American
National Bank and Trust Company of Chicago. Filed as
Exhibit 10.1(b) to the Company's Registration Statement on
Form S-1, made effective December 13, 1984 (Registration
No. 2-94147).
10.6 Juno Lighting, Inc. 401(K) Plan, Amended and Restated
effective December 1, 1987, executed June 1, 1994.
10.6(a) Juno Lighting, Inc. 401(K) Trust, effective December 1,
1985, executed June 1, 1994.
10.6(b) Amendment to Juno Lighting, Inc. 401(K) Plan, effective
September 1, 1994, executed September 12, 1994.
10.7 Juno Lighting, Inc. Rights Agreement dated as of August 3,
1989 between Juno Lighting, Inc. and the First National
Bank of Chicago, as Rights Agent, filed as Exhibit 1 to
the Company's Current Report on Form 8-K (SEC File No.
0-11631) filed with the Securities and Exchange Commission
on August 9, 1989.
10.7(a) First Amendment to Juno Lighting, Inc. Rights Agreement
dated as of June 17, 1991 between Juno Lighting, Inc. and
The First National Bank of Chicago, as Rights Agent, filed
as Exhibit 10.5(a) to the Company's Annual Report on Form
10-K (SEC File No. 0-11631) for the fiscal year ended
November 30, 1991.
10.7(b) Second Amendment to Juno Lighting, Inc. Rights Agreement
dated as of June 17, 1991 between Juno Lighting, Inc. and
The First Chicago Trust Company of New York, as successor
Rights Agent to The First National Bank of Chicago, filed
as Exhibit 1 to the Company's Current Report on Form 8-K
(SEC File No. 0-11631) filed with the Securities and
Exchange Commission on July 17, 1991.
10.7(c) Third Amendment to Juno Lighting, Inc. Rights Agreement
dated as of March 26, 1999 between Juno Lighting, Inc. and
The First Chicago Trust Company, as successor Rights
Agent, filed as Exhibit 10.7(c) to the Company's Current
Report on Form 8-K (SEC File No. 0-11631) filed with the
Securities and Exchange Commission on March 29, 1999.
10.8 Form of Change of Control Benefits Agreement
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11.1 * Computations of Net Income Per Common Share.
16.1 The information has been previously reported in a Form 8
dated May 21, 1992 filed by the Company with the
Securities and Exchange Commission on May 22, 1992 (SEC
File No. 0- 11631).
21.1 * Subsidiaries of the Registrant.
23.1 * Consent of PricewaterhouseCoopers LLP.
99 Press Release dated March 26, 1999.
* Previously filed on February 25, 1999 with the Company's Form 10-K for the
fiscal year ended November 30, 1998.
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<PAGE> 1
EXHIBIT 10.8
JUNO LIGHTING, INC.
CHANGE OF CONTROL BENEFITS AGREEMENT
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I. PURPOSES AND SUMMARY............................................................................... 1
1.1 Purposes.................................................................................................... 1
1.2 Summary of Contractual Protections.......................................................................... 1
ARTICLE II. CERTAIN DEFINITIONS................................................................................ 2
2.1 "Accrued Obligations"....................................................................................... 2
2.2 "Agreement Term"............................................................................................ 2
2.3 "Article"................................................................................................... 2
2.4 "Beneficial Owner".......................................................................................... 2
2.5 "Cause"..................................................................................................... 2
2.6 "Change of Control"......................................................................................... 2
2.7 "Code"...................................................................................................... 3
2.8 "Disability"................................................................................................ 3
2.9 "Effective Date"............................................................................................ 3
2.10 "Employer".................................................................................................. 3
2.11 "Extended Severance Period"................................................................................. 3
2.12 "Good Reason"............................................................................................... 3
2.13 "Guaranteed Base Salary".................................................................................... 3
2.14 "Imminent Change of Control Date"........................................................................... 3
2.15 "IRS"....................................................................................................... 4
2.16 "1934 Act".................................................................................................. 4
2.17 "Notice of Nonrenewal"...................................................................................... 4
2.18 "Notice of Termination"..................................................................................... 4
2.19 "Plans"..................................................................................................... 4
2.20 "Policies".................................................................................................. 4
2.21 "Post-Change Period"........................................................................................ 4
2.22 "SEC"....................................................................................................... 4
2.23 "Section"................................................................................................... 4
2.24 "Subsidiary"................................................................................................ 4
2.25 "Termination Date".......................................................................................... 4
2.26 "Voting Securities"......................................................................................... 4
ARTICLE III. POST-CHANGE PERIOD PROTECTIONS..................................................................... 5
3.1 Position and Duties......................................................................................... 5
3.2 Compensation................................................................................................ 5
3.3 Stock Options............................................................................................... 7
3.4 Change of Control Transaction Bonus......................................................................... 7
3.5 Change of Control Performance Bonus......................................................................... 7
ARTICLE IV. TERMINATION OF EMPLOYMENT.......................................................................... 8
4.1 Disability.................................................................................................. 8
4.2 Death....................................................................................................... 9
4.3 Cause....................................................................................................... 9
</TABLE>
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
(CONTINUED)
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<S> <C>
4.4 Good Reason................................................................................................. 10
ARTICLE V. OBLIGATIONS OF THE COMPANY UPON TERMINATION........................................................ 10
5.1 By the Executive for Good Reason or by the Employer Other Than for Cause or Disability...................... 10
5.2 By the Employer for Cause................................................................................... 12
5.3 By the Executive Other Than for Good Reason................................................................. 12
5.4 By the Employer for Disability.............................................................................. 12
5.5 Upon Death.................................................................................................. 12
ARTICLE VI. NON-EXCLUSIVITY OF RIGHTS.......................................................................... 13
6.1 Waiver of Other Severance Rights............................................................................ 13
6.2 Other Rights................................................................................................ 13
ARTICLE VII. PARACHUTE CAP...................................................................................... 13
7.1 Parachute Cap............................................................................................... 13
ARTICLE VIII. EXPENSES AND INTEREST.............................................................................. 14
8.1 Legal Fees and Other Expenses............................................................................... 14
8.2 Interest.................................................................................................... 14
ARTICLE IX. NO SET-OFF OR MITIGATION........................................................................... 14
9.1 No Set-off by Company....................................................................................... 14
9.2 No Mitigation............................................................................................... 14
ARTICLE X. CONFIDENTIALITY ................................................................................... 15
10.1 Confidentiality............................................................................................. 15
10.2 Remedy...................................................................................................... 15
ARTICLE XI. MISCELLANEOUS...................................................................................... 15
11.1 No Assignability............................................................................................ 15
11.2 Successors.................................................................................................. 15
11.3 Payments to Beneficiary..................................................................................... 16
11.4 Non-alienation of Benefits.................................................................................. 16
11.5 Severability................................................................................................ 16
11.6 Amendments.................................................................................................. 16
11.7 Notices..................................................................................................... 16
11.8 Counterparts................................................................................................ 17
11.9 Governing Law............................................................................................... 17
11.10 Captions.................................................................................................... 17
11.11 Tax Withholding............................................................................................. 17
11.12 No Waiver................................................................................................... 17
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11.13 Entire Agreement............................................................................................ 17
11.14 Notice of Nonrenewal........................................................................................ 17
</TABLE>
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<PAGE> 5
JUNO LIGHTING, INC.
CHANGE OF CONTROL BENEFITS AGREEMENT
THIS AGREEMENT dated as of March 22, 1999, is made between JUNO
LIGHTING, INC., a Delaware corporation having its principal place of business in
Des Plaines, Illinois (the "Company"), and __________ (the "Executive"), a
resident of __________.
ARTICLE I.
PURPOSES AND SUMMARY
1.1 Purposes. The Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its stockholders
to assure that the Company and its Subsidiaries will have the continued service
of the Executive, despite the possibility or occurrence of a Change of Control
of the Company. The Board believes it is imperative to reduce the distraction of
the Executive that would result from the personal uncertainties caused by a
pending or threatened Change of Control, to encourage the Executive's full
attention and dedication to the Company and its Subsidiaries, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the expectations of the Executive will be satisfied and are
competitive with those of similarly-situated corporations. This Agreement is
intended to accomplish these objectives.
1.2 Summary of Contractual Protections. The following is a summary of the
principal contractual protections for the Executive provided under this
Agreement. Each of them is more fully described in this Agreement below. Each of
them is subject to the specific provisions of this Agreement below. Only the
Sections of this Agreement most relevant to the particular protection are cited
in this summary Section 1.2.
(a) A Change of Control transaction bonus in the amount of $150,000
is paid. This bonus is paid within thirty (30) days after a Change of
Control. See Section 3.4.
(b) A prorated performance bonus is paid for the period in which a
Change of Control occurs, based on annualizing performance, prorating the
bonus for the period prior to the Change of Control, and increasing the
amount of the prorated bonus so determined by fifteen percent (15%). That
bonus is paid within thirty (30) days after a Change of Control. See
Section 3.5.
(c) All unvested options are vested upon the Change of Control,
subject to pooling restrictions. See Section 3.3.
(d) Executive is employed under the agreement after the Change of
Control until at least December 31, 2000. Thereafter, the agreement may be
terminated on six months' advance notice. See Sections 3.1 and 3.2.
<PAGE> 6
(e) Executive is paid a severance benefit of the greater of six
months' base salary or base salary for the period from the Termination Date
to December 31, 2000, if (prior to the date the Agreement is terminated)
the Company terminates the executive's employment without "Cause" or the
Executive resigns because of the Company's breach of the Agreement. See
Section 5.1, and also the definitions of "Cause" and "Good Reason" in
Sections 4.3 and 4.4.
ARTICLE II.
CERTAIN DEFINITIONS
When used in this Agreement, the terms specified below shall have the
following meanings:
2.1 "Accrued Obligations" -- see Section 5.2.
2.2 "Agreement Term" means the period commencing on the date of this
Agreement and ending on the date which is six (6) months following the date of
this Agreement (the "Expiration Date"); provided, however, that if an Imminent
Change of Control Date occurs before the Expiration Date, then the Agreement
Term shall automatically extend to a date which is six (6) months after the date
of the Imminent Change of Control Date, as further extended under the terms of
this sentence should any Imminent Change of Control Date occur prior to the
expiration of the Agreement Term as from time to time so extended; and provided
further, that if a Change of Control occurs before the Expiration Date, the
Expiration Date shall automatically be extended to the last day of the Extended
Severance Period.
2.3 "Article" means an article of this Agreement.
2.4 "Beneficial Owner" means such term as defined in Rule 13d-3 of the SEC
under the 1934 Act.
2.5 "Cause" -- see Section 4.3(b).
2.6 "Change of Control" means, except as otherwise provided below, the
occurrence of any of the following:
(a) any person (as such term is used in Rule 13d-5 of the SEC under
the 1934 Act) or group (as such term is defined in Section 13(d) of the
1934 Act), other than a Subsidiary or any employee benefit plan (or any
related trust) of the Company or a Subsidiary, becomes the Beneficial Owner
of 20% or more of the common stock of the Company or of Voting Securities
representing 20% or more of the combined voting power of all Voting
Securities of the Company;
(b) within a period of 24 months or less, the individuals who, as of
any date, constitute the Board (the "Incumbent Directors") cease for any
reason to constitute at least 75% of the members of the Board unless at the
end of such period, at least 75% of the individuals then
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<PAGE> 7
constituting the Board were either Incumbent Directors or nominated upon
the recommendation of at least 75% of the Incumbent Directors or other
directors so nominated.
(c) approval by the stockholders of the Company of any of the
following:
(1) a merger, reorganization or consolidation ("Merger")
with respect to which the individuals and entities who were the
respective Beneficial Owners of the stock and Voting Securities of
the Company immediately before such Merger do not, after such
Merger, beneficially own, directly or indirectly, more than 80% of,
respectively, the common stock and the combined voting power of the
Voting Securities of the corporation resulting from such Merger in
substantially the same proportion as their ownership immediately
before such Merger, or
(2) the sale or other disposition of all or substantially
all of the assets of the Company.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
2.8 "Disability" -- see Section 4.1(b).
2.9 "Effective Date" means the first date on which a Change of Control
occurs during the Agreement Term. Despite anything in this Agreement to the
contrary, if the Company terminates the Executive's employment before the date
of a Change of Control, and if the Executive reasonably demonstrates that such
termination of employment (a) was at the request of a third party who had taken
steps reasonably calculated to effect the Change of Control or (b) otherwise
arose in connection with or anticipation of the Change of Control, then
"Effective Date" shall mean the date immediately before the date of such
termination of employment.
2.10 "Employer" means the Company if the Executive at the relevant time is
employed by the Company or, if at the relevant time the Executive is employed by
a Subsidiary, such Subsidiary.
2.11 "Extended Severance Period" means the period commencing on the
Effective Date and ending on the latest of (a) June 30, 2001, (b) the one-year
anniversary of a Change of Control, or (c) the last day of the Post-Change
Period.
2.12 "Good Reason" -- see Section 4.4(b).
2.13 "Guaranteed Base Salary" -- see Section 3.2(a).
2.14 "Imminent Change of Control Date" means any date on which occurs (a) a
presentation to the Company's stockholders generally or any of the Company's
directors or executive officers of a proposal or offer for a Change of Control,
or (b) the public announcement (whether by advertisement, press release, press
interview, public statement, SEC filing or otherwise) of a proposal or offer for
a
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<PAGE> 8
Change of Control, or (c) the lapse of a 6-month period following a prior
Imminent Change of Control Date if the proposal or offer triggering such prior
Imminent Change of Control Date remains effective and unrevoked on such date.
2.15 "IRS" means the Internal Revenue Service.
2.16 "1934 Act" means the Securities Exchange Act of 1934.
2.17 "Notice of Nonrenewal" -- see Section 11.14.
2.18 "Notice of Termination" means a written notice given in accordance
with Section 11.7 which sets forth (a) the specific termination provision in
this Agreement relied upon by the party giving such notice, (b) in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under such termination provision and (c) if the
Termination Date is other than the date of receipt of such Notice of
Termination, the Termination Date.
2.19 "Plans" means plans, programs, policies or practices of the Company or
any of its Subsidiaries.
2.20 "Policies" means policies, practices or procedures of the Company or
any of its Subsidiaries.
2.21 "Post-Change Period" means the period commencing on the Effective Date
and ending on the later of December 31, 2000 or the date specified in a Notice
of Nonrenewal received pursuant to Section 11.14.
2.22 "SEC" means the Securities and Exchange Commission.
2.23 "Section" means, unless the context otherwise requires, a section of
this Agreement.
2.24 "Subsidiary" means a corporation as defined in Section 424(f) of the
Code with the Company being treated as the employer corporation for purposes of
this definition; provided that the determination of Subsidiary status shall be
made in the case of a Change of Control, at the time of the occurrence of the
event constituting a Change of Control, and in the case of an event relating to
employment status or benefits, at the time such event occurs.
2.25 "Termination Date" means the date of receipt of the Notice of
Termination or any later date specified in such notice (which date shall be not
more than 90 days after the giving of such notice), as the case may be;
provided, however, that if the Executive's employment is terminated by reason of
death or Disability, then the Termination Date shall be the date of death of the
Executive or the Disability Effective Date (as defined in Section 4.1), as the
case may be.
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<PAGE> 9
2.26 "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.
ARTICLE III.
POST-CHANGE PERIOD PROTECTIONS
3.1 Position and Duties.
(a) During the Post-Change Period, (1) the Executive's position
(including offices, titles, reporting requirements and responsibilities),
authority and duties shall be at least commensurate in all material
respects with the most significant of those held by, exercised by and
assigned to the Executive at any time during the 90-day period immediately
before the Effective Date and (2) the Executive's services shall be
performed at the location where the Executive was employed immediately
before the Effective Date or any other location less than 40 miles from
such former location.
(b) During the Post-Change Period (other than any periods of
vacation, sick leave or disability to which the Executive is entitled), the
Executive agrees to devote the Executive's full attention and time to the
business and affairs of the Company and its Subsidiaries and, to the extent
necessary to discharge the duties assigned to the Executive in accordance
with this Agreement, to use the Executive's best efforts to perform
faithfully and efficiently such duties. During the Post-Change Period, the
Executive may (1) serve on corporate, civic or charitable boards or
committees, (2) deliver lectures, fulfill speaking engagements or teach at
educational institutions and (3) manage personal investments, so long as
such activities are consistent with the Policies of the Company at the
Effective Date and do not significantly interfere with the performance of
the Executive's duties under this Agreement. To the extent that any such
activities have been conducted by the Executive before the Effective Date
and were consistent with the Policies of the Company at the Effective Date,
the continued conduct of such activities (or activities similar in nature
and scope) after the Effective Date shall be deemed not to interfere with
the performance of the Executive's duties under this Agreement.
3.2 Compensation.
(a) Base Salary. During the Post-Change Period, the Company shall
pay or cause to be paid to the Executive an annual base salary in cash
("Guaranteed Base Salary"), which shall be paid in a manner consistent with
the Company's payroll practices in effect immediately before the Effective
Date at a rate at least equal to 12 times the highest monthly base salary
paid or payable to the Executive by the Company at any time within the
12-month period immediately before the Effective Date. During the
Post-Change Period, the Guaranteed Base Salary shall be reviewed and
increased at least annually, on such date and in such amount as shall be
substantially consistent with increases in base salary awarded to other
peer executives of the Company, but in no event later than each annual
anniversary of the Effective Date and in no event to a lesser
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<PAGE> 10
amount than 105% of the Guaranteed Base Salary previously in effect. Any
increase in Guaranteed Base Salary shall not limit or reduce any other
obligation of the Company to the Executive under this Agreement. After any
such increase, the Guaranteed Base Salary shall not be reduced and the term
"Guaranteed Base Salary" shall thereafter refer to the increased amount.
(b) Incentive, Savings and Retirement Plans. In addition to
Guaranteed Base Salary payable as provided in this Section, the Executive
shall be entitled to participate during the Post-Change Period in all
incentive (including long-term incentives), savings and retirement Plans
applicable to other peer executives of the Company or, if applicable, its
Subsidiaries, but in no event shall such Plans provide the Executive with
incentive (including long-term incentives), savings and retirement benefits
which, in any case, are less favorable, in the aggregate, in any material
respect, than the most favorable of those provided by the Company or, if
applicable, its Subsidiaries to the Executive or to peer executives under
such Plans as in effect at any time during the 90-day period immediately
before the Effective Date.
(c) Welfare Benefit Plans. During the Post-Change Period, the
Executive and the Executive's family and other eligible dependents shall be
eligible to participate in, and receive all benefits under, welfare benefit
Plans provided by the Company or, if applicable, its Subsidiaries
(including, without limitation, medical, prescription, dental, disability,
salary continuance, individual life, group life, dependent life, accidental
death and travel accident insurance Plans) and applicable to other peer
executives of the Company or, if applicable, its Subsidiaries and their
families, but in no event shall such Plans provide benefits which in any
case are less favorable, in the aggregate, in any material respect, than
the most favorable of those provided to the Executive or to peer executives
under such Plans as in effect at any time during the 90-day period
immediately before the Effective Date.
(d) Fringe Benefits. During the Post-Change Period, the Executive
shall be entitled to fringe benefits and other executive perquisites in
accordance with the most favorable Plans applicable to peer executives of
the Company or, if applicable, its Subsidiaries, but in no event shall such
Plans provide fringe benefits and other executive perquisites which in any
case are less favorable, in the aggregate, in any material respect, than
the most favorable of those provided by the Company or, if applicable, its
Subsidiaries to the Executive or to peer executives under such Plans in
effect at any time during the 90-day period immediately before the
Effective Date.
(e) Expenses. During the Post-Change Period, the Executive shall be
entitled to prompt reimbursement of all reasonable employment-related
expenses incurred by the Executive upon the Company's (or Subsidiary's)
receipt of accountings in accordance with the most favorable Policies
applicable to peer executives of the Company or, if applicable, its
Subsidiaries, but in no event shall such Policies be less favorable, in the
aggregate, in any material respect, than the most favorable of those
provided by the Company or, if applicable, its Subsidiaries to the
Executive or to peer executives under such Policies in effect at any time
during the 90-day period immediately before the Effective Date.
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<PAGE> 11
(f) Office and Support Staff. During the Post-Change Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal secretarial
and other assistance in accordance with the most favorable Policies
applicable to peer executives of the Company or, if applicable, its
Subsidiaries, but in no event shall such Policies be less favorable, in the
aggregate, in any material respect, than the most
favorable of those provided by the Company or, if applicable, it
Subsidiaries to the Executive or to peer executives under such Policies in
effect at any time during the 90-day period immediately before the
Effective Date.
(g) Vacation. During the Post-Change Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable Policies
applicable to peer executives of the Company or, if applicable, its
Subsidiaries, but in no event shall such Policies be less favorable, in the
aggregate, in any material respect, than the most favorable of those
provided by the Company or, if applicable, its Subsidiaries to the
Executive or to peer executives under such Policies in effect at any time
during the 90-day period immediately before the Effective Date.
3.3 Stock Options.
In addition to the other benefits provided in this Section, on the
Effective Date, the Executive shall become fully vested in any and all
outstanding stock options granted to Executive for shares of common stock
of the Company; provided, however, that if in the judgment of the
Compensation Committee of the Board (i) use of pooling of interests
accounting methodology ("pooling") is material to the consummation of a
Change of Control, and (ii) the vesting of options would prevent the use of
pooling, such vesting shall not be required but the Company shall pay or
cause to be paid to the Executive, with respect to any such stock options
that are forfeited without having become vested, a lump sum cash payment in
an amount equal, as of an on the date such options are forfeited, to the
positive difference, if any, between the value of the shares of common
stock with respect to which non-vested options are forfeited (or, if
greater, the value received in connection with the Change of Control by a
holder of an equal number of shares of common stock), and the option
exercise price with respect to such shares; further provided, that if the
payment of such lump sum amount would, in the judgment of the Compensation
Committee of the Board, prevent the use of pooling, such lump sum amount
shall not be required to be paid, but the Company shall use its best
efforts to provide to the Executive benefits of equivalent value upon or as
soon as practicable after such forfeiture to the extent that providing such
benefits does not prevent the use of pooling.
3.4 Change of Control Transaction Bonus.
If Executive is employed by the Company or a Subsidiary immediately
before the Effective Date the Company shall pay or cause to be paid to
Executive not later than thirty (30) days after the Effective Date a single
lump sum in cash in the amount of one hundred fifty thousand dollars
($150,000).
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<PAGE> 12
3.5 Change of Control Performance Bonus.
If Executive is employed by the Company or a Subsidiary immediately
before the Effective Date and is then a participant in a bonus arrangement
which is based upon operating income of the Company (or other performance
measure) and approved by the Board or a committee of the Board ("Bonus
Plan"), the Company shall pay to Executive not later than thirty (30) days
after the Effective Date a single lump sum in cash determined by:
(1) taking the cumulative operating income (or other
performance measure) for the calendar months preceding the Effective Date
in the fiscal year or other applicable performance period in which the
Effective Date occurs (the "Bonus Year");
(2) annualizing the step (1) result to determine projected
operating income (or other performance measure) for the Bonus Year by
multiplying the step (1) result by a fraction (equal to or greater than
one), the numerator of which is the number of whole calendar months in the
Bonus Year and the denominator of which is the number of whole calendar
months in the portion of the Bonus Year preceding the Effective Date;
provided, however, that if the Effective Date occurs in the first calendar
month of a Bonus Year, the result of this step (2) shall be deemed to be
the actual operating income (or other performance measure) for the
preceding fiscal year or other applicable performance period;
(3) determining under the Bonus Plan the amount of the
bonus (if any) that would be payable for the Bonus Year based on the
projected operating income (or other performance measure) resulting from
step (2); and
(4) prorating the amount determined in step (3) by
multiplying such amount by a fraction, the numerator of which is the number
of days elapsed in the Bonus Year prior to the occurrence of the Change of
Control, and the denominator of which is 365; and
(5) multiplying the amount determined in step (4) by
one hundred fifteen percent (115%).
ARTICLE IV.
TERMINATION OF EMPLOYMENT
4.1 Disability.
(a) During the Post-Change Period, Executive's employment with the
Company and all its Subsidiaries may be terminated by the Employer upon the
Executive's Disability (as defined in Section 4.1(b)) by giving the
Executive or his legal representative, as applicable, (1) written notice in
accordance with Section 11.7 of the Employer's intention to terminate the
Executive's employment pursuant to this Section and (2) a certification of
the Executive's Disability by a
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physician selected by the Employer or its insurers and reasonably
acceptable to the Executive or the Executive's legal representative. The
Executive's employment shall terminate effective on the 30th day (the
"Disability Effective Date") after the Executive's receipt of such notice
unless, before the Disability Effective Date, the Executive shall have
resumed the full-time performance of the Executive's duties.
(b) "Disability" means any medically determinable physical or mental
impairment that has lasted for a continuous period of not less than six
months and can be expected to be permanent or of indefinite duration, and
that renders the Executive unable to perform the essential functions
required under this Agreement with or without reasonable accommodation.
4.2 Death. The Executive's employment shall terminate automatically upon
the Executive's death during the Post-Change Period.
4.3 Cause.
(a) During the Post-Change Period, the Employer may terminate the
Executive's employment for Cause.
(b) "Cause" means any of the following: (i) commission by the
Executive of any felony which includes as an element of the crime a
premeditated intention to commit the act, (ii) Executive's inability to
perform his duties due to habitual alcohol use or drug addiction, (iii)
serious misconduct involving dishonesty in the course of Executive's
employment, or (iv) the Executive's habitual neglect of his duties (other
than on account of disability) which habitual neglect materially adversely
affects the Executive's performance of duties and continues for 30 days
following Executive's receipt of notice from the Board of Directors of the
Company which specifically identifies the nature of the habitual neglect
and the duties that are materially adversely affected and states that, if
not cured, such habitual neglect constitutes grounds for termination
pursuant to this Section 4.3; except that Cause shall not mean:
(1) bad judgment or negligence other than habitual
neglect of duty;
(2) any act or omission believed by the Executive in good
faith to have been in or not opposed to the interest of the Company and its
Subsidiaries (without intent of the Executive to gain, directly or
indirectly, a profit to which the Executive was not legally entitled);
(3) any act or omission with respect to which a
determination could properly have been made by the Board or the board of
directors of the Employer that the Executive met the applicable standard of
conduct for indemnification or reimbursement under the Company's or
Employer's by-laws, any applicable indemnification agreement, or applicable
law, in each case in effect at the time of such act or omission; or
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(4) any act or omission with respect to which Notice of
Termination is given more than 12 months after the earliest date on which
any member of the board of directors of the Employer, not a party to the
act or omission, knew or should have known of such act or omission.
(c) Any termination of the Executive's employment by the Employer
for Cause shall be communicated to the Executive by Notice of Termination.
4.4 Good Reason.
(a) During the Post-Change Period, the Executive may terminate his
or her employment for Good Reason.
(b) "Good Reason" means any of the following:
(1) the assignment to the Executive of any duties
materially inconsistent with the Executive's position (including
offices, titles, reporting requirements or responsibilities),
authority or duties as contemplated by Section 3.1(a)(1), or any
other action by the Company or the Employer which results in a
material diminution or other material adverse change in such
position, authority or duties;
(2) the Employer's requiring the Executive to be based at
any office or location other than the location described in Section
3.1(a)(2);
(3) any failure by the Company to comply with any of the
provisions of Sections 3.2, 3.3, 3.4 or 3.5;
(4) any other material adverse change to the terms and
conditions of the Executive's employment; or
(5) any purported termination by the Employer of the
Executive's employment other than as expressly permitted by this
Agreement (any such purported termination shall not be effective for
any other purpose under this Agreement).
Any reasonable determination of "Good Reason" made in good faith by the
Executive shall be conclusive.
(c) Any termination of employment by the Executive for Good Reason
shall be communicated to the Employer and the Company by Notice of
Termination. A passage of time prior to delivery of Notice of Termination
or a failure by the Executive to include in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason shall
not waive any right of the Executive under this Agreement or preclude the
Executive from asserting such fact or circumstance in enforcing rights
under this Agreement.
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ARTICLE V.
OBLIGATIONS OF THE COMPANY UPON TERMINATION
5.1 By the Executive for Good Reason or by the Employer Other Than for
Cause or Disability. If Executive's Termination Date occurs during the
Post-Change Period on account of Employer's termination of Executive's
employment other than for Cause or Disability, or the Executive's termination of
employment for Good Reason, the Company shall immediately pay or cause to be
paid to the Executive, in addition to all vested rights arising from the
Executive's employment as specified in Article III a cash amount equal to the
sum of the following amounts:
(a) to the extent not previously paid, the Guaranteed Base
Salary and any accrued vacation pay through the Termination Date;
(b) all amounts previously deferred by or an accrual to the benefit
of the Executive under any nonqualified deferred compensation or pension
plan, together with any accrued earnings thereon, to the extent not yet
paid;
(c) to the extent not previously paid or provided, (1) the stock
option vesting or cash payment required by Section 3.3, (2) the Change of
Control transaction bonus required by Section 3.4, and (3) the Change of
Control performance bonus required by Section 3.5;
(d) an amount equal to the product of (A) the greater of one-half
(.5) or a fraction, the numerator of which is the number of whole and
fractional months remaining between the Termination Date and the last day
of the Post-Change Period and the denominator of which is 12, multiplied by
(B) the greater of the Guaranteed Base Salary or 12 times the highest
monthly base salary paid or payable at any time between the Effective Date
and the Termination Date;
(e) an amount equal to the sum of the value of the unvested portion
of the Executive's accounts or accrued benefits under any qualified plan
maintained by the Company or a Subsidiary as of the Termination Date;
(f) all fees and costs charged by the outplacement firm selected by
the Executive to provide outplacement services.
Until the six-month anniversary of any Termination Date occurring during the
Post-Change Period or such later date as any applicable Plan or Policy may
specify, the Company shall continue to provide to the Executive and the
Executive's family and other eligible dependents welfare benefits (including,
without limitation, medical, prescription, dental, disability, salary
continuance, individual life, group life, accidental death and travel accident
insurance plans and programs), fringe benefits and other executive perquisites
which are at least as favorable as the most favorable Plans and Policies
applicable to the Executive and other peer executives and their families and
other eligible dependents as of the Termination Date, but which are in no event
less favorable than the most favorable Plans and Policies applicable to the
Executive and other peer executives and their families and other eligible
dependents during the 90-day period immediately before the Effective Date. The
cost to Executive of
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such welfare benefits shall not exceed the cost of such benefits to the
Executive immediately before the Effective Date or, if less, the Termination
Date. Notwithstanding the foregoing, if the Executive is covered under any
medical, life, or disability insurance plan(s) provided by a subsequent
employer, then the amount of coverage required to be provided by the Employer
hereunder shall be reduced by the amount of coverage provided by the subsequent
employer's medical, life, or disability insurance plan(s). The Executive's
rights under this Section shall be in addition to, and not in lieu of, any
post-termination continuation coverage or conversion rights the Executive may
have pursuant to applicable law, including without limitation continuation
coverage required by Section 4980 of the Code or Part 6 of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
5.2 By the Employer for Cause. If Executive's Termination Date occurs
during the Post- Change Period on account of Employer's termination of the
Executive's employment for Cause, this Agreement shall terminate without further
obligation by the Company or any Subsidiary to the Executive, other than the
obligation immediately to pay the Executive in cash all amounts specified in
clauses (a) and (b) of the first sentence of Section 5.1 (such amounts
collectively, the "Accrued Obligations").
5.3 By the Executive Other Than for Good Reason. If the Executive's
Termination Date occurs during the Post-Change Period on account of Executive's
termination of his employment other than for Good Reason, Disability or death,
this Agreement shall terminate without further obligations by the Company or any
Subsidiary to the Executive, other than the obligation (i) immediately to pay
the Executive in cash the Accrued Obligations; and (ii) except to the extent
already timely paid or provided, immediately (A) to pay or provide to Executive
the stock option vesting or cash payment required by Section 3.3, (B) to pay to
Executive the Change of Control transaction bonus required by Section 3.4, and
(C) to pay to Executive the Change of Control performance bonus required by
Section 3.5.
5.4 By the Employer for Disability. If Executive's Termination Date occurs
during the Post- Change Period on account of Employer's termination of the
Executive's employment by reason of the Executive's Disability, this Agreement
shall terminate without further obligations to the Executive, other than
(a) the Employer's obligation (i) immediately to pay the Executive
in cash the Accrued Obligations; and (ii) except to the extent already
timely paid or provided, immediately (A) to pay or provide to Executive the
stock option vesting or cash payment required by Section 3.3, (B) to pay to
Executive the Change of Control transaction bonus required by Section 3.4,
and (C) to pay to Executive the Change of Control performance bonus
required by Section 3.5, and
(b) the Executive's right after the Disability Effective Date to
receive disability and other benefits at least equal to the greater of (1)
those provided under the most favorable disability Plans applicable to
disabled peer executives of the Employer in effect immediately before the
Termination Date or (2) those provided under the most favorable disability
Plans applicable to peer executives in effect at any time during the 90-day
period immediately before the Effective Date.
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5.5 Upon Death. If the Executive's employment is terminated by reason of
the Executive's death during the Post-Change Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than the obligation immediately to pay the
Executive's estate or beneficiary in cash (i) the Accrued Obligations; and (ii)
except to the extent already timely paid or provided, (A) the stock option
vesting or cash payment required by Section 3.3, (B) the Change of Control
transaction bonus required by Section 3.4, and (C) the Change of Control
performance bonus required by Section 3.5. Despite anything in this Agreement
to the contrary, the Executive's family and other eligible dependents shall be
entitled to receive benefits at least equal to the most favorable benefits
provided by the Employer to the surviving families and other eligible dependents
of peer executives of the Employer under Plans or Policies providing death
benefits, but in no event shall such Plans provide benefits which in any case
are less favorable, in the aggregate, than the most favorable of those provided
by the Employer with respect to the Executive under such Plans in effect at any
time during the 90-day period immediately before the Effective Date.
ARTICLE VI.
NON-EXCLUSIVITY OF RIGHTS
6.1 Waiver of Other Severance Rights. To the extent that payments are made
to the Executive pursuant to Section 5.1, the Executive hereby waives the right
to receive severance payments under any other Plan or agreement of the Company.
6.2 Other Rights. Except as provided in Section 6.1, this Agreement shall
not prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other Plans or Policies, and for which the
Executive may qualify, nor shall this Agreement limit or otherwise affect such
rights as the Executive may have under any other agreements with the Company or
any of its Subsidiaries. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any Plan and any other payment
or benefit required by law at or after the Termination Date shall be payable in
accordance with such Plan or applicable law except as expressly modified by this
Agreement.
ARTICLE VII.
PARACHUTE CAP
7.1 Parachute Cap. If it is determined (by the reasonable computation of
the Company's independent auditors, which determinations shall be certified by
such auditors and set forth in a written certificate ("Certificate") delivered
to the Executive) that any amount paid or deemed paid to the Executive pursuant
to this Agreement or otherwise, other than reimbursement of legal fees and
expenses pursuant to Article 8, (collectively, the "Payments") is or will become
subject to any excise tax under Section 4999 of the Code or any similar tax
payable under any United States federal, state, local or other law (such excise
tax and all such similar taxes collectively, "Excise Taxes"), then the aggregate
present value of such amount shall be reduced to an amount (expressed in present
value)
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which maximizes the aggregate present value thereof without causing any
portion thereof to be subject to Excise Taxes.
ARTICLE VIII.
EXPENSES AND INTEREST
8.1 Legal Fees and Other Expenses.
(a) If the Executive incurs legal, accounting and other fees or
other expenses in a good faith effort to obtain benefits under this
Agreement, regardless of whether the Executive ultimately prevails, the
Company shall reimburse the Executive on a monthly basis upon the written
request for such fees and expenses to the extent not reimbursed under the
Company's officers and directors liability insurance policy, if any. The
existence of any controlling case or regulatory law which is directly
inconsistent with the position taken by the Executive shall be evidence
that the Executive did not act in good faith.
(b) Reimbursement of legal fees and expenses shall be made monthly
upon the written submission of a request for reimbursement together with
evidence that such fees and expenses are due and payable or were paid by
the Executive. If the Company shall have reimbursed the Executive for legal
fees and expenses and it is later determined that the Executive was not
acting in good faith, all amounts paid on behalf of, or reimbursed to, the
Executive shall be promptly refunded to the Company.
8.2 Interest. If the Company or a Subsidiary does not pay any amount due to
the Executive under this Agreement within three days after such amount became
due and owing, interest shall accrue on such amount from the date it became due
and owing until the date of payment at a annual rate equal to the rate of
interest in effect from time to time during the period of such nonpayment for
outstanding funds on the Company's principal revolving credit loan, or if the
Company does not have a revolving credit loan, then at the prime rate of
interest in effect from time to time during the period of such nonpayment, as
reported from time to time in the Wall Street Journal.
ARTICLE IX.
NO SET-OFF OR MITIGATION
9.1 No Set-off by Company. The Executive's right to receive when due the
payments and other benefits provided for under this Agreement is absolute,
unconditional and subject to no set-off, counterclaim or legal or equitable
defense. Time is of the essence in the performance by the Company and its
Subsidiaries of their obligations under this Agreement. Any claim which the
Company or a Subsidiary may have against the Executive, whether for a breach of
this Agreement or otherwise, shall be brought in a separate action or proceeding
and not as part of any action or proceeding brought by the Executive to enforce
any rights against the Company or any Subsidiary under this Agreement.
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<PAGE> 19
9.2 No Mitigation. The Executive shall not have any duty to mitigate the
amounts payable by the Company or any Subsidiary under this Agreement by seeking
new employment following termination. Except as specifically otherwise provided
in this Agreement, all amounts payable pursuant to this Agreement shall be paid
without reduction regardless of any amounts of salary, compensation or other
amounts which may be paid or payable to the Executive as the result of the
Executive's employment by another employer.
ARTICLE X.
CONFIDENTIALITY
10.1 Confidentiality. Executive acknowledges that it is the policy of the
Company and its Subsidiaries to maintain as secret and confidential all valuable
and unique information and techniques acquired, developed or used by the Company
and its Subsidiaries relating to their business, operations, employees and
customers, which gives the Company and its Subsidiaries a competitive advantage
in the businesses in which the Company and its Subsidiaries are engaged
("Confidential Information"). Executive recognizes that all such Confidential
Information is the sole and exclusive property of the Company and its
Subsidiaries, and that disclosure of Confidential Information would cause damage
to the Company and its Subsidiaries. Executive agrees that, except as required
by the duties of his employment with the Company and/or its Subsidiaries and
except in connection with enforcing the Executive's rights under this Agreement
or if compelled by a court or governmental agency, he will not, without the
consent of the Company, disseminate or otherwise disclose any Confidential
Information obtained during his employment with the Company and/or its
Subsidiaries for so long as such information is valuable and unique.
10.2 Remedy. Executive and the Company specifically agree that, in the
event that Executive shall breach his obligations under this Article X, the
Company and its Subsidiaries will suffer irreparable injury and have no adequate
remedy for such breach, and shall be entitled to injunctive relief therefor, and
in particular, without limiting the generality of the foregoing, the Company and
its Subsidiaries shall not be precluded from pursuing any and all remedies they
may have at law or in equity for breach of such obligations; provided, however,
that such breach shall not in any manner or degree whatsoever limit, reduce or
otherwise affect the obligations of the Company and its Subsidiaries under this
Agreement, and in no event shall an asserted breach of the Executive's
obligations under this Article X constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.
ARTICLE XI.
MISCELLANEOUS
11.1 No Assignability. This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
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11.2 Successors. This Agreement shall inure to the benefit of and be
binding upon the Company, it Subsidiaries and their respective successors and
assigns. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it or cause it to be performed if no such succession had
taken place. Any successor to the business and/or assets of the Company which
assumes or agrees to perform this Agreement by operation of law, contract, or
otherwise shall be jointly and severally liable with the Company under this
Agreement as if such successor were the Company.
11.3 Payments to Beneficiary. If the Executive dies before receiving
amounts to which the Executive is entitled under this Agreement, such amounts
shall be paid in a lump sum to the beneficiary designated in writing by the
Executive, or if none is so designated, to the Executive's estate.
11.4 Non-alienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by the
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.
11.5 Severability. If any one or more articles, sections or other portions
of this Agreement are declared by any court or governmental authority to be
unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any article, section or other portion not so declared to be unlawful
or invalid. Any article, section or other portion so declared to be unlawful or
invalid shall be construed so as to effectuate the terms of such article,
section or other portion to the fullest extent possible while remaining lawful
and valid.
11.6 Amendments. Except as provided in Sections 2.2 and 11.7 hereof, this
Agreement shall not be altered, amended or modified except by written instrument
executed by the Company and Executive.
11.7 Notices. All notices and other communications under this Agreement
shall be in writing and delivered by hand or by first class registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
[NAME]
[STREET ADDRESS]
[CITY, STATE, ZIP CODE]
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If to the Company or the Employer:
Juno Lighting, Inc.
1300 South Wolf Road
Des Plaines, Illinois 60017-5065
Attention: Chief Executive Officer
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
11.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
11.9 Governing Law. This Agreement shall be interpreted and construed in
accordance with the laws of the State of Illinois without regard to its choice
of law principles.
11.10 Captions. The captions of this Agreement are not a part of the
provisions hereof and shall have no force or effect.
11.11 Tax Withholding. The Company may withhold from any amounts payable
under this Agreement any federal, state or local taxes that are required to be
withheld pursuant to any applicable law or regulation.
11.12 No Waiver. The Executive's failure to insist upon strict compliance
with any provision of this Agreement shall not be deemed a waiver of such
provision or any other provision of this Agreement. A waiver of any provision of
this Agreement shall not be deemed a waiver of any other provision, and any
waiver of any default in any such provision shall not be deemed a waiver of any
later default thereof or of any other provision.
11.13 Entire Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to its subject matter.
11.14 Notice of Nonrenewal. At any time following the Effective Date, the
Company may deliver a Notice of Nonrenewal to the Executive. Such Notice of
Nonrenewal shall specify the date as of which the Post-Change Period shall end,
which date shall not be earlier than the later of December 31, 2000 or the date
which is six months after the date the Executive receives the Notice of
Nonrenewal.
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IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the date first above written.
[EXECUTIVE'S NAME]
JUNO LIGHTING, INC.
By: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Title: Robert S. Fremont
Chairman and Chief Executive Officer
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EXHIBIT 99
JUNO LIGHTING, INC. ANNOUNCES $25.00 PER SHARE RECAPITALIZATION MERGER
WITH FREMONT PARTNERS AND REPORTS FIRST QUARTER SALES AND EARNINGS
March 26, 1999, Juno Lighting, Inc. ("Juno") (NASDAQ: JUNO) announced today
the signing of a merger and recapitalization agreement with an entity controlled
by Fremont Partners, L.P., Fremont Investors I, LLC ("Fremont"), providing for
the merger of Juno with Jupiter Acquisition Corp., a Delaware corporation formed
by Fremont.
The merger and recapitalization agreement provides that the owner of each
outstanding share of Juno common stock can elect either to receive $25.00 in
cash for that share or to retain that share, subject to proration as described
below; provided that an aggregate of 2,400,000 shares (approximately 12.9% of
the presently outstanding shares) must be retained by existing public
shareholders. If existing public shareholders elect to retain more than
2,400,000 of the outstanding shares, then the shares available will be prorated
among those electing to retain shares and cash will be paid for all other
shares. If holders elect to retain fewer than 2,400,000 of the outstanding
shares, the remaining available shares will be prorated among those electing
cash. Immediately following the merger, existing shareholders will hold an
approximate 39.5% fully diluted interest in Juno, not taking into account the
subsequent increase in the stated amount of the preferred stock referred to
below and the corresponding increase in the number of shares of common stock
issuable upon conversion of the preferred stock.
The merger and recapitalization agreement also provides for a simultaneous
purchase by Fremont of 1,060,000 newly issued convertible preferred shares of
Juno at a price of $100.00 per share or an aggregate initial stated amount of
$106,000,000. The preferred stock will generally have the right to receive
cumulative 2% quarterly dividends. These quarterly dividends will cause an
increase in the stated amount of the preferred stock for the first five years
following issuance; the dividends will become payable in cash thereafter. The
preferred stock will be convertible into a number of shares of common stock
derived by dividing the stated amount by the conversion price of $26.25 per
share, which is subject to adjustment in certain events. At any time beginning
on the ninth anniversary of the effective time of the merger, Juno may elect to
redeem the preferred stock at a price equal to the then stated amount plus any
accrued but unpaid dividends.
Juno's Board of Directors has unanimously recommended that shareholders
vote in favor of the transactions and has received a fairness opinion from
Juno's financial advisor, William Blair & Company, LLC. Upon completion of the
transaction, Juno expects to continue to operate as an independent public
company under its current name, and its headquarters are expected to remain in
Des Plaines, Illinois.
"This transaction provides public shareholders substantial value and a
significant premium to the market," stated Robert S. Fremont, Juno's chairman
and CEO. Mr. Fremont is not affiliated with Fremont.
Mark Williamson, Managing Director of Fremont Partners, L.P., said, "We are
very pleased to be associated with Juno Lighting and with its outstanding
management team and employees. The Company
<PAGE> 2
has a strong history of product leadership, growth and profitability and we look
forward to participating in the continuing development of this fine
organization."
The merger and recapitalization is subject to customary terms and
conditions, including the approval of Juno's shareholders and funding of
financing arrangements. It is currently contemplated that the transaction would
be submitted to shareholders for approval at Juno's annual meeting to be held as
soon as practicable. A commitment has been obtained from Bank of America for up
to $125 million in senior debt financing and an investment bank has been engaged
to arrange approximately $125 million of senior subordinated debt to finance the
transaction.
The merger and recapitalization agreement includes provisions prohibiting
Juno from soliciting another purchaser and provides for the payment of certain
fees and the reimbursement of expenses to Fremont in the event of a termination
of the merger agreement under certain circumstances.
Juno also announced today that for the first quarter ended February 28,
1999 sales increased 8% to $37,277,000 compared to $34,386,000 for the like
period in 1998. Net income for the first quarter of 1999 increased 26% to
$6,009,000 ($0.32 per common share on a basic and diluted basis), compared to
$4,766,000 ($0.26 per common share on a basic and diluted basis) for the like
period in 1998.
Juno is a specialist in the design, manufacturing, and marketing of
lighting fixtures for commercial and residential use.
Fremont Partners, L.P., and certain affiliated entities, is a private
equity fund headquartered in San Francisco with committed capital of $605
million. Fremont Partners, L.P. is part of the Fremont Group, a private
investment company with approximately $10 billion of assets under management.
Any offering of securities in connection with the merger and
recapitalization will be made only by means of a prospectus. This news release
shall not constitute an offer to sell or the solicitation of any offer to buy
the securities described above, nor shall there be any sale of these securities
in any state in which such offering, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such
state. This press release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which reflect Juno's
current judgment on certain issues. Because such statements apply to future
events, they are subject to risks and uncertainties that could cause the actual
results to differ materially. Important factors which could cause actual results
to differ materially are described in Juno's reports on Form 10-K and 10-Q on
file with the Securities and Exchange Commission.
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