SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from _________ to ___________
Commission file number 0-18109
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BCAM INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 13-3228375
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1800 Walt Whitman Road, Melville, New York 11747
- ------------------------------------------------
(Address of principal executive offices)
(516) 752-3550
---------------------------
(Issuer's telephone number)
Not applicable
----------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 ___
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes ___ No ___
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: 15,954,733
----------
Transitional Small Business Disclosure Format (check one): Yes ____ No X
<PAGE>
FORM 10-QSB
BCAM INTERNATIONAL, INC.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheet--June 30, 1997 (Unaudited)................3
Condensed Consolidated Statements of Operations - Three Months
and Six Months ended June 30, 1997 and 1996 (Unaudited).....................4
Condensed Consolidated Statements of Cash Flows - Six Months Ended
June 30, 1997 and 1996 (Unaudited)..........................................5
Notes to Condensed Consolidated Financial Statements - June 30, 1997
(Unaudited).................................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.........................................8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.....................................11
SIGNATURES....................................................................12
INDEX OF EXHIBITS.............................................................13
2
<PAGE>
<TABLE>
<CAPTION>
BCAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
JUNE 30, 1997
<S> <C>
Current assets:
Cash and cash equivalents $ 240,964
Accounts receivable, less allowance for doubtful accounts of $11,245 73,796
Inventory 26,158
Prepaid expenses and other current assets 719,725
------------------
Total current assets 1,060,643
Property, plant, and equipment, at cost:
Furniture and fixtures 220,318
Equipment 586,421
Leasehold improvements 50,519
------------------
857,258
Less accumulated depreciation and amortization (695,725)
------------------
161,533
Other assets, principally patents and capitalized software
(net of accumulated amortization of $103,600) 337,190
------------------
Total assets $ 1,559,366
==================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 203,715
Accrued expenses and other current liabilities 190,343
------------------
Total current liabilities 394,058
Other liabilities 4,289
Commitments and contingencies -
Acquisition preferred stock, par value $.01 per share:
Authorized 750,000 shares, no shares issued or outstanding -
Common shareholders' equity:
Common stock, par value $.01 per share; authorized 40,000,000 shares,
16,717,915 shares issued and 15,954,733 shares outstanding 167,179
Paid-in surplus 16,002,908
Deficit (14,109,968)
------------------
2,060,119
Less 763,182 treasury shares (899,100)
------------------
1,161,019
------------------
Total liabilities and shareholders' equity $ 1,559,366
==================
See accompanying notes
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
BCAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
------------------------------------- ---------------------------------
1997 1996 1997 1996
--------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C>
Net revenue $ 215,861 108,226 $ 287,232 $ 210,721
Costs and expenses:
Direct costs of revenue 71,178 4,543 150,349 49,288
Selling, general and administrative 618,091 567,659 1,027,026 1,075,315
Research, development and engineering 22,368 19,333 30,477 46,560
--------------- ------------------ --------------- ---------------
Total operating expenses 711,637 591,535 1,207,852 1,171,163
--------------- ------------------ --------------- ---------------
Net loss from operations (495,776) (483,309) (920,620) (960,442)
Interest income, net 5,339 16,722 11,942 41,534
--------------- ------------------ --------------- ---------------
Net loss $ (490,437) $ (466,587) $ (908,678) $ (918,908)
=============== ================== =============== ===============
Net loss per share $ (0.03) $ (0.03) $ (0.06) $ (0.06)
=============== ================== =============== ===============
Weighted average number of common
shares outstanding 15,954,733 14,859,211 15,682,634 14,858,222
=============== ================== =============== ===============
See accompanying notes
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
BCAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30
------------------------------------------
1997 1996
------------------ -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (908,678) $ (918,908)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation 33,984 72,840
Amortization 12,837 -
Accrued interest on held to maturity securities - 7,172
Changes in operating assets and liabilities:
Accounts receivable (51,259) (21,850)
Inventory (26,158) -
Prepaid expenses and other current assets (386,248) 116,210
Other assets (121,492) (77,821)
Accounts payable, accrued expenses and sundry liabilities 108,993 (139,033)
Other liabilities - 4,707
------------------ -----------------
Net cash (used in) operating activities (1,338,021) (956,683)
------------------ -----------------
INVESTING ACTIVITIES
Loss from sale of equipment 3,331 -
Proceeds from sale of equipment 3,000 -
Purchase of equipment (8,060) -
Proceeds from sale of held to maturity securities - 1,500,000
------------------ -----------------
Net cash (used in) provided by investing activities (1,729) 1,500,000
------------------ -----------------
FINANCING ACTIVITIES
Net proceeds from short-term debt - 400,000
Net proceeds from sale of common stock 1,075,000 -
Net proceeds from exercise of options - 18,440
Payment of stock registration and issuance costs (20,630) (59,219)
------------------ -----------------
Net cash provided by financing activities 1,054,370 359,221
------------------ -----------------
(Decrease) increase in cash and cash equivalents (285,380) 902,538
Cash and cash equivalents at beginning of period 526,344 701,686
================== =================
Cash and cash equivalents at end of period $ 240,964 $ 1,604,224
================== =================
See accompanying notes
</TABLE>
5
<PAGE>
BCAM International, Inc.
BCAM INTERNATIONAL, INC.
("THE COMPANY")
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three-month and six-month period ended June 30, 1997
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1997. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the year ended December 31, 1996.
2. PER SHARE DATA
Net loss per share has been computed on the basis of the weighted average
number of common shares outstanding for each of the periods presented. Common
stock equivalents have been excluded since their effect is antidilutive.
3. INCOME TAXES
The Company accounts for income taxes in accordance with Financial
Accounting Standards Board ("FASB") Statement No. 109, "Accounting for Income
Taxes". The Company has not reflected a benefit for income taxes in the
accompanying Condensed Consolidated Statements of Operations for the three
months and six months ended June 30, 1997 and the three months and six months
ended June 30, 1996, since the future availability of net operating loss
carryforwards have been offset in full by valuation allowances in accordance
with FASB Statement No. 109.
4. PRIVATE PLACEMENT
On January 15, 1997, the Company offered a minimum of 400,000 units, each
consisting of one share of the Company's common stock and a non-redeemable Class
AA warrant which entitled the holder to purchase one share of the Company's
Common Stock at a price of $1.10 per share, until March 31, 1999. The proceeds
were to be used for the advancement of various technologies as well as for
working capital. The offering was completed on March 28, 1997, and the Company
sold 1,075,000 units for $1,075,000. On May 14, 1997 the Company changed the
conversion price of the Class AA warrants from $1.10 per share to $ .65 per
share and extended the expiration date from March 31, 1999 to March 31, 2002.
6
<PAGE>
5. STOCK PURCHASE AGREEMENT
On March 19, 1997 the Company entered into an agreement with Drew Shoe
Corporation ("Drew") to purchase all of the common stock of Drew for
approximately $5,000,000. This commitment is contingent upon the Company
obtaining the necessary financing to fund the purchase. The Company does not
have any obligations under this agreement should management be unable to obtain
this financing.
6. SUBSEQUENT EVENTS
On July 24, 1997, the Company completed an offering of 150 shares of
Redeemable Convertible Preferred Stock in BCA Services Inc.(a wholly owned
subsidiary of BCAM International, Inc.), the proceeds of which were used for
working capital purposes. The first tranche was in the amount of $500,000 and 50
Redeemable Convertible Preferred Stock Shares were issued. Two additional
tranches of $500,000 each are available to the Company to draw down on, one up
to sixty(60) days after the Company's registration statement is declared
effective, and another one up to sixty(60) days after the second tranche is
drawn down.
On July 23, 1997, the Company reached an agreement with Drew to extend the
deadline for the closing of the Drew Shoe Acquisition, as outlined in the
Purchase Agreement, from March 28, 1997 to September 15, 1997, for $25,000 for
each of the two partners, with the total of $50,000 to be credited to the
purchase price at the closing.
The Company is in process of arranging the funding for the acquisition of
Drew and, in conjunction with this effort, the following has occurred:
On July 8, 1997 (modified on August 11, 1997), the Company received a
commitment from Coleman and Company to work to consummate a private placement
offer for a minimum of $3.5 Million and a maximum of $5.0 Million in Convertible
and Redeemable Acquisition Preferred Stock, the shares of which will be
convertible into shares of the Company's Common Stock. In conjunction with this
equity funding, the Company expects that a group, including its largest
shareholder, will purchase $1.0M of additional Preferred Stock, under
substantially the same terms and conditions as the Coleman offer, bringing the
total of the expected funding to between $4.5M to $6.0M. The proceeds are
expected to be used for the acquisition of Drew and other working capital needs.
On June 18, 1997, the Company received a commitment letter from Coast
Business Credit to provide up to $6.5M in asset-based financing under a
revolving line of credit to be secured by substantially all of the assets of
Drew and to be guaranteed by BCAM International. The proceeds are expected to be
used for the acquisition of Drew and for operating capital for Drew.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The June 30, 1997 Form 10-QSB represents the second quarterly report after
the Form 10-KSB and Form 10-KSB/A for the year ended December 31, 1996. The
10-QSB should be read in conjunction with the aforementioned document, and
represents a comparison between the quarter ended June 30, 1997 and the quarter
ended June 30, 1996.
RESULTS OF OPERATIONS
Net revenue is recognized when products are shipped, or is based on the
percentage of completion method as costs are incurred. No significant
obligations remain outstanding and collection of the accounts receivable, in
management's estimation, is deemed probable.
Net revenue increased by $107,635, to $215,861, during the three months
ended June 30, 1997, as compared to the same period in 1996. The increase was
due to $47,828 of revenue from sales of the HumanCAD(R) division's MQPro(TM)
software, which was launched in April 1997, an increase in Product Assessment
and Redesign revenue of $39,535, and an increase of $22,500 in Intelligent
Surface Technology ("IST") revenue. Net revenue increased by $76,511, to
$287,232, during the six months ended June 30, 1997, as compared to the same
period in 1996. The increase was primarily due to $54,876 of revenue from sales
of MQPro(TM) software.
Direct costs include salaries, product costs, equipment purchases for
contracts, consulting fees and certain other costs. Gross profit may fluctuate
from period to period. Factors influencing fluctuations include the nature and
volume of services provided to individual customers which affect contract
pricing, the Company's success in estimating contract costs (principally
professional time), the timing of hiring new professionals, who may require
training before gaining experience, efficiencies and meeting customer demands.
Direct costs in total increased by $66,635, to $71,178, in the quarter
ended June 30, 1997, and by $101,061, to $150,349, in the six months ended June
30, 1997, as compared to the same periods in 1996. The first six months of 1996
reflect lower direct costs because of a credit of $148,960, due to the
elimination of a reserve no longer deemed necessary. Excluding this
non-recurring item, direct costs were $18,575 lower in the three months ended
June 30 and $47,899 lower in the six months ended June 30 than the comparable
periods in 1996.
8
<PAGE>
As a result of the above, gross profit, as set forth in the table below,
increased by $41,000 for the quarter ended June 30, 1997, and decreased by
$24,550 for the six months ended June 30, 1997, as compared to the comparable
periods in 1996.
<TABLE>
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Net revenue $215,861 $108,226 $287,232 $210,721
Direct costs 71,178 4,543 150,349 49,288
---------- ---------- --------- ---------
Gross profit $144,683 $103,683 $136,883 $161,433
Gross profit % 67% 96% 48% 77%
</TABLE>
Selling, general and administrative expenses increased by $50,432, to
$618,091, for the three months ended June 30, 1997, and decreased by $48,289, to
$1,027,026, for the six months ended June 30, 1997, as compared to the same
periods in 1996. Included in these figures were $252,675 of costs in the six
months ended June 30, 1997, of which $212,512 was incurred in the second
quarter, in connection with the launch of the HumanCAD(R) division's MQPro(TM)
software. Offsetting this was a reduction in expenses relating to the Company's
Ergonomic Consulting Services business of $162,080 in the three months ended
June 30 and $300,964 in the six months ended June 30, primarily in the areas of
legal costs, salaries and benefits, consulting costs, reporting and exchange
fees and insurance premiums.
Research, development and engineering costs increased by $3,035 for the
quarter ended June 30, 1997 and decreased by $16,083 for the six months ended
June 30, 1997 from the same periods in 1996.
Net interest income decreased by $11,383 for the three months ended June
30, 1997, and by $29,592 for the six months ended June 30, 1997, compared to the
periods ended June 30, 1996. This was due to a decrease in assets available for
investment.
Net loss, as a result of the above, for the three months and six months
ended June 30, 1997, was $490,437 and $908,678, respectively, as compared to a
net loss of $466,587 and $918,908 for the comparable period in 1996.
There was no tax benefit for the three months or six months ended June 30,
1997 and the three months or six months ended June 30, 1996. Losses which have
increased the future availability of the net operating loss carryforward have
been offset by valuation allowances.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents and held-to-maturity securities were $240,964 as of
June 30, 1997, compared to $526,344 as of December 31, 1996. Net cash used in
operating activities, mainly to cover the net loss, was $1,338,021 for the six
month period ended June 30, 1997. Financing activities, primarily the proceeds
from a private placement completed on March 28, 1997 provided $1,054,370 in cash
for the six month period ended June 30, 1997.
Working capital was $666,585 as of June 30, 1997, compared to $597,293 as
of December 31, 1996. The increase of $69,292 or 11.6% in working capital was
primarily attributable to the proceeds from the private placement, reduced by
the net loss incurred in the six months ended June 30, 1997.
The Company expects that its working capital, together with revenue from
operations, and the proceeds from future private placements, will be more than
sufficient to meet any liquidity and capital requirements for the remainder of
1997.
On March 19, 1997, the Company entered into an agreement with the owners of
Drew Shoe Corporation ("Drew") whereby, the Company will purchase all of the
Common Stock of Drew for approximately $5,000,000 subject to financing. Drew, of
Lancaster Ohio, is a 125 year-old leading designer, manufacturer and distributor
of medical footwear and orthotic products. Drew represents an opportunistic and
synergistic vehicle for the Company to incorporate IST into medical footwear and
orthotic products, for diabetics, arthritics, and the aging population.
The Company has committed to spend $230,000 during the remainder of 1997
for the development of the Microvalve, which is a necessary component relating
to certain applications of the IST.
.
PREPAID EXPENSES AND OTHER CURRENT ASSETs
Prepaid Expenses and Other Current Assets were $719,725 compared with
$333,477 on December 31, 1996. During the six month period the Company
accelerated (1) its acquisition related activities and (2) its marketing
activities related to the launching of MQPro on March 10, 1997. The impact of
the launch related activities, including marketing and product packaging,
occurred primarily in the second quarter of the Company's fiscal year. On March
28, 1997, the Company signed a Stock Purchase Agreement to acquire Drew Shoe.
Spending associated with the acquisition is expected to be included in the
balance sheet of the subsidiary and amortized, beginning the month after the
acquisition is concluded. Should the acquisition not occur, expenses associated
with the acquisition will be expensed in the third quarter of the current fiscal
year. Expenses associated with the launching of MQPro are being amortized over
the remainder of the current fiscal year.
10
<PAGE>
PART II. OTHER INFORMATION
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(A) EXHIBITS.
---------
10.53 Employment Agreement dated January 1, 1997, between
Michael Strauss and the Company
10.54 Employment Agreement dated January 1, 1997, between
Robert Wong and the Company
10.55 Consulting Agreement dated April 7, 1997, between
Masthead Management and the Company
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
-------------------
No reports were filed on Form 8-K during the six month period
ended June 30, 1997.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BCAM INTERNATIONAL, INC.
Dated: August 11, 1997 By: /s/ Michael Strauss
--------------- --------------------
Michael Strauss
Chairman of the Board of Directors
Chief Executive Officer
Dated: August 11, 1997 By: /s/ Robert P. Wong
--------------- ------------------
Robert P. Wong
Vice Chairman of the Board of Directors
Chief Technology Officer
Acting Chief Financial Officer
12
<PAGE>
INDEX OF EXHIBITS
-----------------
Exhibit No. Exhibit
- ----------- -------
10.53 Employment Agreement dated January 1, 1997, between
Michael Strauss and the Company
10.54 Employment Agreement dated January 1, 1997, between
Robert Wong and the Company
10.55 Consulting Agreement dated April 7, 1997, between
Masthead Management and the Company
27 Financial Data Schedule
13
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of January 1, 1997, by and
between BCAM INTERNATIONAL, INC., a New York corporation (the "Company"), with
offices at 1800 Walt Whitman Road, Melville, New York 11747 and MICHAEL STRAUSS
(the "Executive"), residing at Seven Sherwood Gate, Oyster Bay Cove, New York
11771.
WHEREAS, the Company wishes to continue the employment of the Executive
as of January 1, 1997, upon the terms and conditions set forth in this
Agreement; and
WHEREAS, the Executive is willing to continue to serve in the employ of
the Company as of January 1, 1997, upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements hereinafter set forth, the Company and the Executive
agree as follows:
1. Employment and Duties. The Company hereby employs the Executive to
render full-time exclusive services to the Company during the Term (as defined
in Section 2 hereof) as President, Chief Executive Officer, Chief Operating
Officer and Chairman of the Board of Directors of the Company. The Company
agrees that the Executive shall have such power and authority as should
reasonably be required to fulfill all duties in an efficient manner. The Company
agrees that the Company's headquarters, where the Executive will be performing
his duties, shall remain in Nassau or Suffolk Counties, within a twenty (20)
mile radius of the Company's present headquarters. The Executive hereby accepts
such employment and agrees to devote his full time, attention and best efforts
exclusively to performing the duties described above. During the Term of this
Agreement, the Company will use its best efforts to have the Executive elected
to the Board of Directors of the Company and its subsidiaries, and elected
Chairman of the Board of Directors. In the event the Executive is employed with
the Company until December 31, 2000, the Company will discuss the possibility of
a renewable employment agreement with terms (including base compensation) at
least as favorable to the Executive as in effect on December 30, 1999.
2. Term. This Agreement shall become effective on January 1, 1997 (the
"Effective Date"). The Executive will be employed by the Company for a period of
three years commencing on the Effective Date and terminating on December 31,
1999, subject to the earlier termination at any time during the Executive's
period of employment, as hereinafter provided (the "Term").
3. Compensation.
(a) The Company shall pay the Executive a salary for the
services to be rendered by him pursuant to this Agreement at the annual rate of
$200,000; provided, however, on or before July 1, 1997, the Company's Board of
Directors will consider an increase in the annual rate by $25,000, such increase
to be retroactive to January 1, 1997 (the Executive's annual rate of payment is
herein called "Salary"). The Salary shall be payable in periodic installments
commencing after the Effective Date in accordance with the Company's regular
payroll practices as in effect from time to time. On January 1 of each year of
the Term, beginning with January 1, 1998, the Salary shall automatically
increase by an amount equal to the Salary then in effect multiplied by the
increase in the Consumer Price Index (New York area) from January 1 of the prior
year to January 1 of the then current year.
(b) The Executive shall be entitled to receive a bonus, which
amount for the period ending December 31, 1997 shall not exceed $100,000 nor be
less than $25,000. The amount of the bonus for the years ending December 31,
1998 and December 31, 1999 shall be agreed to by the Executive and the Company
by December 31, 1997, and be based upon mutually agreed to objectives for the
Executive.
(c) The provisions of Paragraphs 3(c)(i) and (ii) of the
Executive's prior Employment Agreement, dated as of February 16, 1995, with
respect to options are hereby confirmed, specifically:
"(i) The Executive shall receive, in addition to his
Salary, options to purchase at the fair market value on the date hereof [i.e.,
November 13, 1994] or on January 2, 1995, whichever is lower (mean of bid and
ask), an aggregate of 300,000 shares of common stock of the Company which shall
vest and become exercisable for 100,000 shares on January 2, 1996, for 100,000
shares on January 2, 1997, and for 50,000 shares on January 2, 1998 and 1999,
respectively, to the extent available under the Company's 1989 Stock Option Plan
(the "Plan") or if options are not available under the Plan, upon the terms and
subject to the conditions which shall be similar to the Plan options. The
Company will use its best efforts to seek shareholder approval of any options
that require such approval. All options granted to the Executive under the Plan
that are not vested on his date of termination shall be automatically cancelled.
The options granted hereunder shall be incentive stock options to the extent
they may qualify for such treatment.
(ii) The Executive has also been granted options to
purchase at the fair market value on February 16, 1995, an aggregate of 200,000
shares of common stock of the Company which shall vest and become exercisable
50,000 shares on February 16, 1996, 50,000 shares on February 16, 1997, 50,000
shares on February 16, 1998, and 50,000 shares on February 16, 1999 on terms and
conditions similar to those issued under the Plan. The Company will use its best
efforts to seek shareholder approval of any option that requires such approval.
All options granted pursuant to an option plan that are not vested on
termination of the Executive shall be automatically cancelled. The options
granted hereunder shall be incentive stock options to the extent they may
qualify for such treatment. All options described in (c)(1) and (ii) shall
provide that if there is a change of control in the Company, all options shall
vest and shall be exercisable immediately prior to the change of control."
(d) The Executive shall receive, in addition to his Salary and
any bonus, options to purchase at the fair market value on January 2, 1997, an
aggregate of the greater of (i) 1,000,000 shares of common stock of the Company
(such options called the "New Options"). The New Options shall vest and become
exercisable 33 1/3% of such shares on January 2, 1997, 33 1/3% of such shares on
January 2, 1998, and 33 1/3% of such shares on January 2, 1999, to the extent
available under the Plan, or if options are not available under the Plan, upon
the terms and subject to the conditions which shall be similar to the Plan
options. The Company will use its best efforts to seek shareholder approval of
any New Options that require such approval. All options (including New Options)
granted to the Executive under the Plan that are not vested on his date of
termination for Cause (defined herein) or upon the voluntary termination by the
Executive of his employment hereunder under circumstances not set forth in
Section 4(d), shall be automatically cancelled. The New Options granted
hereunder shall be incentive stock options to the extent they may qualify for
such treatment.
(e) The Executive shall be entitled to participate in and
receive the benefits under any pension plans or bonus plans of the Company or of
any subsidiary (i.e., Drew Shoe), whichever is more beneficial to the Executive,
and shall be included in, at no cost to Executive, the Company's health plan
(including hospitalization, medical and major medical), life, prescription drug,
accident and disability insurance plans or programs and any other employee
benefit or fringe benefit plans, perquisites or arrangements which the Company
makes available generally to other employees of the Company.
(f) The Executive shall be entitled to an automobile allowance
for the Term of this Agreement which shall be used for automobile expenses,
including lease payments, insurance, fuel, maintenance, registration and taxes.
(g) The Executive shall be entitled to five (5) weeks paid
vacation each year which shall accrue pursuant to the Company's vacation policy.
The Executive shall be entitled to carry two (2) weeks of unused vacation time
to any subsequent year without being paid for such vacation time, provided,
however, on termination by the Company pursuant to either Section 4(c) or 4(d)
hereof, the Executive shall also be paid for all unused vacation time.
(h) The Executive shall be entitled to reimbursement for all
reasonable travel and other expenses incurred by the Executive in connection
with his service under the Agreement.
4. Termination of Employment.
(a) (1) The Executive's employment hereunder shall terminate
automatically as of the date of his death of upon the Executive's becoming
eligible for benefits under the Company's long term disability plan as in effect
from time to time, or if no disability plan is in effect, upon the Executive
becoming permanently disabled as defined in the first sentence of Internal
Revenue Code Section 22(e)(3). In the event of death, the Executive's estate
shall have one (1) year from the date of his death to exercise any outstanding
and unexercised options. In the event the Executive is permanently disabled as
defined herein, he or his designee will have one (1) year to exercise any
outstanding and unexercised options.
(2) Upon termination of the Executive's employment
under circumstances described in Section 4(a)(1) above, the Company shall pay
and provide to the Executive (or, in the event of his death, to his surviving
spouse or such other beneficiary as the Executive may designate in writing, or
if there is neither, to his estate):
(i) his earned but unpaid Salary and bonus and accrued
vacation pay as of the date of termination of his employment with the Company;
(ii) the benefits, if any, to which he is entitled as a
former employee under the Company's employee benefit plans and programs and
compensation plans and programs in which he was a participant; and
(iii) any reimbursements due to him under Section 3(h).
(b) The Company may at any time at its option, immediately
terminate the Executive's employment for "Cause" (as hereinafter defined). In
the event of termination for Cause, the Executive shall receive the earned
Salary and benefits (except he shall not receive any bonus earned but not yet
paid) described in Sections 4(a)(2)(i), (ii) and (iii) and no other
compensation. For purposes of this Agreement, the term Cause means (i) any
conviction of the Executive of a felony under the laws of the United States or
any state thereof; or (ii) gross or willful misconduct of the Executive in
connection with the performance of his duties that has caused or is highly
likely to cause severe harm to the Company; or (iii) intentional dishonesty by
the Executive in the performance of his duties hereunder which has a material
adverse effect on the Company.
(c) The Company may terminate the Executive's employment in
its sole discretion for any reason on not less than one-hundred eighty (180)
days written notice to the Executive.
(d) The Executive may terminate his employment under
circumstances where the Company has committed, during a thirty (30) day period
after written notice has been delivered to the Company, a continuing material
breach of its obligations under this Agreement.
(e) In the event (1) termination by the Company pursuant to
Section 4(c), (2) termination by the Executive pursuant to Section 4(d) (which
includes the failure of the Company to elect the Executive the Chairman of its
Board of Directors), or (3) in the event the Company does not reach an agreement
with Executive to extend his employment after January 1, 2000, the Executive
shall receive (A) the Salary and benefits described in Sections 4(a) (2) (i),
(ii) and (iii), (B) payment of his then Salary in monthly installments for a
period of one (1) year after the date of termination, provided, however, so long
as the Company is willing to enter into an extension/renewal of this Agreement
for a period of at least three (3) years following January 1, 2000 on terms
substantially similar to the terms of this Agreement in effect on December 30,
1999, the Company shall not be obligated to pay the Executive his salary for
this additional one (1) year period if an agreement between the Company and the
Executive is not achieved.
(f) The Company and the Executive hereby stipulate that the
damages which may be incurred by the Executive following any such termination of
employment are not capable of accurate measurement as of the date first above
written and that such liquidated damages set forth above constitute reasonable
damages under the circumstances and the sole amounts due to the Executive, and
do not require mitigation by the Executive or are subject to set-off or
counterclaim by the Company.
(g) In the event that a transaction or circumstance occurs or
eventuates, which reasonably may be construed as effecting or constituting a
clear and present probability of effecting a change in "control" of the Company,
then the Executive may elect by written notice to the Company, to treat any such
transaction or circumstance as a continuing material breach of this Agreement
and terminate his employment with the Company. It is agreed that, in such event,
Executive will suffer irreparable damage and harm which will be incapable or
very difficult of accurate estimation. Accordingly, in lieu of amounts that the
Executive would be entitled under Section 3 of this Agreement, the Company will
pay to the Executive, within three (3) days of such event, an amount equal to
299% of such Executive's base salary, such amount to be determined as defined in
Section 280G of the Internal Revenue Code. The term "control" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of the Company, whether through the ownership of
voting securities, by contract or otherwise.
5. Covenants and Representations.
(a) The Executive has not and unless authorized or instructed
in writing by the Company, the Executive shall not, except as required in the
conduct of the Company's business, disclose to others, or use, any of the
Company's inventions or discoveries or its secret or confidential information,
knowledge or data (oral, written, or in machine-readable form) which the
Executive may have obtained or will obtain during the course of or in connection
with the Executive's employment, including, without limitation, such inventions,
discoveries, information, knowledge, know-how or data relating to machines,
equipment, products, services, systems, software, research and/or development,
designs, compositions, formulae, processes, manufacturing procedures or business
methods, whether or not developed by the Executive, by others in the Company or
obtained by the Company from third parties, and irrespective of whether or not
such inventions, discoveries, information, knowledge, know-how or data have been
identified by the Company as secret or confidential, unless and until, and then
only to the extent that, such inventions, discoveries, information, knowledge,
know-how or data become available to the public otherwise than by the
Executive's act or omission.
(b) During the course of his employment by the Company the
Executive shall not, except as required in the conduct of the Company's
business, disclose to others, or use, any of the information relating to present
and prospective marketing, sales and advertising programs and agreements with
representatives or prospective representatives of the Company, present or
prospective sources of supply or any other business arrangements of the Company,
including but not limited to, customers, customer lists, costs, prices and
earnings, whether or not such information is developed by the Executive, by
others in the Company or obtained by the Company from third parties and
irrespective of whether or not such information has been identified by the
Company as secret or confidential, unless and until, and than only to the extent
that, such information becomes available to the public otherwise than by the
Executive's act or omission.
(c) (i) The Executive agrees to disclose immediately to the
Company or any persons designated by it and to assign to the Company at its
option, or its successors or assigns, all inventions made, discovered, conceived
or first reduced to practice by the Executive, solely or jointly with others, at
any time during the time while employed by the Company which inventions are
made, discovered or conceived either in the course or such employment, or with
the use of the Company's time, material, facilities or funds, or which relate to
or are suggested by any subject matter with which the Executive's employment by
the Company may bring the Executive into contact, or which relate to any
investigations or obligations undertaken by the Company; and the Executive
hereby grants and agrees to grant the right to the Company and its nominees to
obtain, for its own benefit and in its own name (entirely at its expense)
patents and patent applications including original, continuation, reissue,
utility and design patents, and applications, patents of addition, confirmation
patents, registration patents, petty patents, utility models, etc., and all
other types of patents and the like, and all renewals and extensions of any of
them for those inventions in any and all countries; and the Executive shall
assist the Company without further charge during the period of the Executive's
employment, through counsel designated by the Company to execute, acknowledge,
and deliver all such further papers, including assignments, applications for
Letters Patent (of the United States or of any foreign country), oaths,
disclaimers or other instruments and to perform such further acts, including
giving testimony or furnishing evidence in the prosecution or defense of
appeals, interferences, suits and controversies relating to any of the aforesaid
inventions, applications and patents as may be deemed necessary by the Company
or its nominees to effectuate the vesting or perfecting in the Company or its
nominees of all right, title and interest in and to said inventions,
applications and patents.
(ii) the Executive agrees to disclose immediately to
the Company or any persons designated by it and to assign to the Company, at its
option, or its successors or assigns, all works of authorship, including all
writings, manuals, computer programs, software and hardware, written or created
by the Executive solely or jointly with others, at anytime during the course of
his employment by the Company, which works are made or conceived either in the
course of such employment, or with the use of the Company's time, material,
facilities or funds, or which relate to or are suggested by any subject matter
with which the Executive's employment by the Company may bring the Executive
into contract or which relate to any investigations or obligations undertaken by
the Company; and the Executive hereby agrees that all such works are works made
for hire, of which the Company is the author and the beneficiary of all rights
and protections afforded by the law of copyright in any and all countries; and
the Executive will assist the Company without further charge during the term of
his employment, through counsel designated by the Company, to execute,
acknowledge, and deliver all such further papers, including assignments,
applications for copyright registration (in the United States or in any foreign
country), oaths, disclaimers or other instruments, and to perform such further
acts, including giving testimony or furnishing evidence in the prosecution or
defense of appeals, interferences, suits and controversies relating to any of
the aforesaid works, as may be deemed necessary by the Company or its nominees
to effectuate the vesting or perfecting in the Company or its nominees of all
rights and interest in and to said works and copies thereof, including the
exclusive rights of copying and distribution.
(d) As a matter of record, attached hereto as Exhibit A is a
complete list and brief description of all inventions, patented or unpatented,
which the Executive has made or conceived prior to his employment by the
Company, and which shall be excluded the terms from this Agreement, and as
Exhibit B, is a complete list and brief description of all works of authorship,
patented or unpatented, which the Executive has made or conceived prior to his
employment by the Company, which shall be excluded from the terms of this
Agreement. The Executive covenants that such lists are complete and accurate.
(e) (i) The Executive shall not during the "Non-Competition
Period," determined as hereinafter provided, engage in, represent or be
connected with, an officer, director, partner, employee, sales representative,
proprietor, consultant, associate, agent, co-venturer, or otherwise, any
business or activity competing with the business of the Company or its
subsidiaries or affiliates or any part thereof as conducted by them prior to the
termination of his employment in any geographic location where the Company
conducts business at the time of the termination of the employment. The term
"Non-Competition Period" as used herein means a period, immediately following
the termination of the employment of the Executive hereunder, of (A) 6 months,
or (B) a period shorter than 6 months if so designated by the Company by written
notice given to the Executive at least 20 days before the end of such shorter
period so designated by the Company.
(ii) The prohibitions in Subsection (i) of Section (e)
shall bind the Executive only so long as the Company pays him monthly, upon
demand, a sum at least equal to one hundred (100%) percent of the Executive's
monthly base pay at termination, as defined below, for each amount of such
unemployment during the Non-Competition Period. The term "monthly base pay"
means the Executive's monthly Salary, in all cases including bonus or other
extra compensation or benefits, and is subject to regular deductions for taxes,
social security payments, etc. If the Executive is being paid after his
termination of employment pursuant to the provisions of Subsection (c) and (d)
of Section 4, no payments are required to be made pursuant to this Subsection
(ii) of Section (e) so long as the payments under subsections (c) and (d) of
Section 4 are being made.
(f) (i) During the time employed by the Company, and for six
(6) months thereafter, the Executive shall not engage in business of the type
conducted by the Company with or solicit business of the type conducted by the
Company from any person, firm or entity which was a customer of the Company at
any time within two (2) years preceding the termination of his employment,
induce or attempt to induce any such customer of the Company to reduce its
business with the Company, solicit or attempt to solicit any employees of the
Company, to leave the employ of the Company or offer or cause to be offered
employment to any person who was employed by the Company at any time during the
two (2) years prior to the termination of his employment with the Company, while
employed by the Company, and for six (6) months thereafter, the Executive shall
also not engage in business of the type conducted by the Company with or solicit
business of the type conducted by the Company from any prospective customer of
the Company.
(ii) All computer software, computer programs, source
codes, object codes, magnetic tapes, printouts, samples, notes, records,
reports, documents, customer lists, photographs, catalogs and other writings,
whether copyrightable or not, relating to or dealing with the Company's business
and plans, and those of others entrusted to the Company which are prepared or
created by the Executive or which may come into his possession at any time
during his employment, are the property of the Company, and upon termination of
his employment, the Executive agrees to return all such computer software,
computer programs, source codes, object codes, magnetic tapes, printouts,
samples, notes, records, reports, documents, customer lists, photographs,
catalogs and writings and all copies thereof to the Company.
(g) If any of the rights or restrictions contained or provided
for in this Agreement shall be deemed top be unenforceable by reason of the
extent, duration or geographical scope, or other provisions hereof, or any other
provisions of this Agreement, the parties hereto contemplate that the court
shall reduce such extent, duration, geographical scope or other provisions and
enforce this Agreement in its reduced form for all purposes in the manner
contemplated hereby.
(h) The Executive agrees to cooperate with the Company with
respect to the Company obtaining life insurance on the life of the Executive
with the Company named as the beneficiary or disability insurance with respect
to Executive or both.
6. Indemnification and Attorneys' Fees. During the Term of his
employment and thereafter, the Company shall indemnify, hold harmless and defend
the Executive from all damages, claims, losses, and costs and expenses
(including reasonable attorney's fees) arising out of, in connection with, or
relating to all acts or omissions taken or not taken by him in good faith while
performing services for the Company, and shall further reimburse the Executive
for all expenses (including attorney's fees) incurred in enforcing the benefits
of this Agreement. If and to the extent that the Company maintains, at any time
during the Term, an insurance policy covering the other officers and directors
of the Company against lawsuits, the Company shall use its best efforts to cause
the Executive to be covered under such policy upon the same terms and conditions
as other similarly situated officers and directors during the Term and for a
period of at least five (5) years thereafter.
7. Miscellaneous.
(a) Neither of the parties hereto shall have the right to
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party; provided, however, that this Agreement shall
inure to the benefit or and be binding upon the successors and assigns of the
Company upon any sale of all or substantially all of the Company's assets, or
upon any merger or consolidation of the Company with or into any other
corporation, all as though such successors and assigns of the Company and their
respective successors and assigns were the Company.
(b) This Agreement and the relationships of the parties in
connection with the subject matter of this Agreement shall be construed and
enforced according to the laws of the State of New York without giving effect to
the conflicts of laws rules thereof.
(c) This Agreement contains the full and complete agreement or
the parties relating to the employment of the Executive hereunder and supersedes
all prior agreements, arrangements or understandings, whether written or oral,
relating thereto. This Agreement may not be amended, modified or supplemented,
and no provision or requirement hereof may be waived, except by written
instrument signed by the Party to be charged.
(d) If any provision of this Agreement is held to be invalid
or unenforceable by any judgment of a tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and this
Agreement shall be carried out as nearly as possible according to its original
terms and intent.
(e) Except for applications for injunctive relief, any dispute
or question arising from this Agreement or its interpretation shall be settled
by arbitration in accordance with the commercial rules then in effect of the
American Arbitration Association. Hearings of the arbitrator(s) shall be held in
the county of Nassau, State of New York, unless the parties agree otherwise.
Judgment upon an award rendered by the arbitrator(s) may be entered in any court
of competent jurisdiction, including courts in the State of New York. Any award
so rendered shall be final and binding upon the parties hereto. All costs and
expenses of the arbitrator(s) shall be paid as determined by such arbitrator(s),
and all costs and expenses of experts, witnesses and other persons retained by
the parties shall be borne by them respectively, subject to the provisions of
Section 6 hereof. In the event that injunctive relief is requested, either of
the parties shall have the right to seek provisional remedies prior to an
ultimate resolution by arbitration, service of process to commence the
arbitration may be given as provided in Subsection (f) below.
(f) All notices which either party hereto is required or
permitted to give to the other will be given by certified mail or by personal
delivery, addressed to such other at the address referred to above, or at such
other place as either may from time to time designate by notice to the other in
writing. Three days after the date of mailing of any such notice and the date of
actual delivery if made by personal delivery will be deemed to be the date of
delivery thereof.
(g) No waiver by either party of any breach or nonperformance
of any provision or obligation of this Agreement shall be deemed to be a waiver
of any preceding or succeeding breach of the same or any other provision of this
Agreement.
(h) The enumeration and headings contained in this Agreement
are for convenience of reference only and are not intended to have any
substantive significance in interpreting this Agreement.
(i) Unless the context otherwise requires, whenever used in
this Agreement the singular shall include the plural, the plural shall include
the singular, and the masculine gender shall include the neuter or feminine
gender and vice versa.
(j) Whenever any determination is to be made or action to be
taken on a date specified in this Agreement, if such date shall fall upon a
Saturday, Sunday or a legal holiday, the date for such determination or action
shall be extended to the first business day immediately thereafter.
(k) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original document, but all
of which counterparts shall together constitute one and the same instrument.
This Agreement shall not be effective unless and until executed by all parties
hereto.
(l) Should any of the provisions of this Agreement require
judicial interpretation, it is agreed that the court or arbitrator interpreting
or construing this Agreement shall not apply a presumption that any provision
shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party
who itself or through its agents prepared the same, it being agreed that both
parties and their respective agents have participated in the preparation of this
Agreement.
(m) All provisions hereof which by their nature shall survive
the termination of the Executive's employment, including, without limitation,
the provisions in Section 5, shall survive the termination of the Executive's
employment.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
BCAM INTERNATIONAL, INC.
By:\s\ Glenn Santmire
---------------------
Authorized Board Member
\s\ Michael Strauss
--------------------
Michael Strauss
<PAGE>
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of January 1, 1997, by and
between BCAM INTERNATIONAL, INC., a New York corporation (the "Company"), with
offices at 1800 Walt Whitman Road, Melville, New York 11747 and ROBERT P. WONG
(the "Executive"), residing at 12 Cameron Drive, Huntington, New York 11743.
WHEREAS, the Company wishes to continue the employment of the Executive
as of January 1, 1997, upon the terms and conditions set forth in this
Agreement; and
WHEREAS, the Executive is willing to continue to serve in the employ of
the Company as of January 1, 1997, upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements hereinafter set forth, the Company and the Executive
agree as follows:
<PAGE>
1. Employment and Duties. The Company hereby employs the Executive to
render full-time exclusive services to the Company during the Term (as defined
in Section 2 hereof) as Vice Chairman, Chief Technology Officer of the Company.
The Company agrees that the Executive shall have such power and authority as
shall reasonably be required to fulfill all duties in an efficient manner. The
Company agrees that the Company's headquarters, where the Executive will be
performing his duties, shall remain in Nassau or Suffolk Counties, within a
twenty (20) mile radius of the Company's present headquarters. The Executive
hereby accepts such employment and agrees to devote his full time, attention and
best efforts exclusively to performing the duties of such office, and such other
duties appropriate to a senior executive officer as may be directed by the
Company's President and Chief Executive Officer. During the Term of this
Agreement, the Company will use its best efforts to have the Executive elected
to the Board of Directors of the Company and its subsidiaries, and elected Vice
Chairman of the Board of Directors. In the event the Executive is employed with
the Company until December 31, 1998, the Company will discuss the possibility of
a renewable employment agreement with terms (including base compensation) at
least as favorable to the Executive as in effect during the twelve (12) month
period prior to such date.
2. Term. This Agreement shall become effective on January 1, 1997 (the
"Effective Date"). The Executive will be employed by the Company for a period of
two years commencing on the Effective Date and terminating on December 31, 1998,
subject to the earlier termination at any time during the Executive's period of
employment, as hereinafter provided (the "Term").
3. Compensation.
(a) The Company shall pay the Executive a salary for the
services to be rendered by him pursuant to this Agreement at the annual rate of
$102,000; provided, however, on or before July 1, 1997, the Company's Board of
Directors will consider an increase in the annual rate by $25,000, such increase
to be retroactive to January 1, 1997 (the Executive's annual rate of payment is
herein called "Salary"). The Salary shall be payable in periodic installments
commencing after the Effective Date in accordance with the Company's regular
payroll practices as in effect from time to time. On January 1 of each year of
the Term, beginning with January 1, 1998, the Salary shall automatically
increase by an amount determined by multiplying the Salary then in effect by the
percentage increase in the Consumer Price Index (New York area) from January 1
of the prior year to January 1 of the then current year.
(b) The Executive shall be entitled to receive a bonus, which
amount for the period ending December 31, 1997 shall not exceed $70,000 nor be
less than $25,000. The amount of the bonus for the year ending December 31, 1998
shall be agreed to by the Executive and the Company by December 31, 1997, and be
based upon mutually agreed to objectives for the Executive.
(c) The grant of a total of 500,000 options to the
Executive as per the attached schedule is hereby confirmed.
(d) On or before July 1, 1997, the Executive shall receive, in
addition to his Salary and any bonus, options to purchase at the fair market
value on the date of grant 500,000 shares of common stock of the Company (such
options called the "New Options" shall vest and become exercisable for 50% of
such shares on the date of grant, and for 50% of such shares on January 2, 1998,
to the extent available under the Plan, or if options are not available under
the Plan, upon the terms and subject to the conditions which shall be similar to
the Plan options. The Company will use its best efforts to seek shareholder
approval of any New Options that require such approval. All options (including
New Options) granted to the Executive under the Plan that are not vested on his
date of termination for Cause (defined herein) or upon the voluntary termination
by the Executive of his employment hereunder under circumstances not set forth
in Section 4(d), shall be automatically cancelled. The New Options granted
hereunder shall be incentive stock options to the extent they may qualify for
such treatment.
(e) The Executive shall be entitled to participate in and
receive the benefits under any pension plans or bonus plans of the Company or of
any subsidiary (i.e., Drew Shoe), whichever is more beneficial to the Executive,
and shall be included in, at no cost to Executive, the Company's health plan
(including hospitalization, medical and major medical), life, prescription drug,
accident and disability insurance plans or programs and any other employee
benefit or fringe benefit plans, perquisites or arrangements which the Company
makes available generally to other employees of the Company.
(f) The Executive shall be entitled to an automobile allowance
for the Term of this Agreement which shall be used for automobile expenses,
including lease payments, insurance, fuel, maintenance, registration and taxes
and shall be promptly reimbursed for documented out-of-pocket expenses incurred
in the performance of the Executive's duties.
(g) The Executive shall be entitled to four (4) weeks paid
vacation each year which shall accrue pursuant to the Company's vacation policy.
The Executive shall be entitled to carry two (2) weeks of unused vacation time
to any subsequent year without being paid for such vacation time, provided,
however, on termination by the Company pursuant to either Section 4(c) or 4(d)
hereof, the Executive shall also be paid for all unused vacation time.
(h) The Executive shall be entitled to reimbursement for all
reasonable travel and other expenses incurred by the Executive in connection
with his service under the Agreement.
4. Termination of Employment.
(a) (1) The Executive's employment hereunder shall terminate
automatically as of the date of his death or upon the Executive's becoming
eligible for benefits under the Company's long term disability plan as in effect
from time to time, or if no disability plan is in effect, upon the Executive
becoming permanently disabled as defined in the first sentence of Internal
Revenue Code ss.22(e)(3). In the event of death, the Executive's estate shall
have one (1) year from the date of his death to exercise any outstanding and
unexercised options. In the event the Executive is permanently disabled as
defined herein, he or his designee will have one (1) year to exercise any
outstanding and unexercised options.
(2) Upon termination of the Executive's employment
under circumstances described in Section 4(a)(1) above, the Company shall pay
and provide to the Executive (or, in the event of his death, to his surviving
spouse or such other beneficiary as the Executive may designate in writing, or
if there is neither, to his estate):
(i) his earned but unpaid Salary and bonus and accrued
vacation pay as of the date of termination of his employment with the Company;
(ii) the benefits, if any, to which he is entitled as a
former employee under the Company's employee benefit plans and programs and
compensation plans and programs in which he was a participant; and
(iii) any reimbursements due to him under Section 3(h).
(b) The Company may at any time at its option, immediately
terminate the Executive's employment for "Cause" (as hereinafter defined). In
the event of termination for Cause, the Executive shall receive the earned
Salary and benefits (except he shall not receive any bonus earned but not yet
paid) described in Sections 4(a)(2)(i), (ii) and (iii) and no other
compensation. For purposes of this Agreement, the term "Cause" means (i) any
conviction of the Executive of a felony under the laws of the United States or
any state thereof; or (ii) gross or willful misconduct of the Executive in
connection with the performance of his duties that has caused or is highly
likely to cause severe harm to the Company; or (iii) intentional dishonesty by
the Executive in the performance of his duties hereunder which has a material
adverse effect on the Company.
(c) The Company may terminate the Executive's employment in
its sole discretion for any reason on not less than one hundred eighty (180)
days written notice to the Executive.
(d) The Executive may terminate his employment under
circumstances where the Company has committed, during a thirty (30) day period
after written notice has been delivered to the Company, a continuing material
breach of its obligations under this Agreement including, but not limited to,
any policy or course of conduct which has the effect of causing or requiring the
Executive to report to, or be responsible to, any person other than the
Company's Chief Executive Officer.
(e) In the event (1) termination by the Company pursuant to
Section 4(c), (2) termination by the Executive pursuant to Section 4(d) (which
includes the failure of the Company to elect the Executive the Vice Chairman of
its Board of Directors), or (3) in the event the Company does not reach an
agreement with Executive to extend his employment after January 1, 1999, the
Executive shall receive (A) the Salary and benefits described in Sections
4(a)(2)(i), (ii) and (iii), (B) payment of his then Salary in monthly
installments for a period of six (6) months after the date of termination,
provided, however, so long as the Company is willing to enter into an
extension/renewal of this Agreement for a period of at least two (2) years
following January 1, 1999 on terms substantially similar to the terms of this
Agreement in effect on December 30, 1998, the Company shall not be obligated to
pay the Executive his Salary for this additional six month period if an
agreement between the Company and the Executive is not achieved.
(f) The Company and the Executive hereby stipulate that the
damages which may be incurred by the Executive following any such termination of
employment are not capable of accurate measurement as of the date first above
written and that such liquidated damages set forth above constitute reasonable
damages under the circumstances and the sole amounts due to the Executive, and
do not require mitigation by the Executive or are subject to set-off or
counterclaim by the Company.
(g) In the event that a transaction or circumstance occurs or
eventuates, which reasonably may be construed as effecting or constituting a
clear and present probability of effecting a change in "control" of the Company,
then the Executive may elect by written notice to the Company, to treat any such
transaction or circumstance as a continuing material breach of this Agreement
and terminate his employment with the Company. It is agreed that, in such event,
Executive will suffer irreparable damage and harm which will be incapable or
very difficult of accurate estimation. The term "control" means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of the Company, whether through the ownership of voting
securities, by contract or otherwise.
5. Covenants and Representations.
(a) The Executive has not and unless authorized or instructed
in writing by the Company, the Executive shall not, except as required in the
conduct of the Company's business, disclose to others, or use, any of the
Company's inventions or discoveries or its secret or confidential information,
knowledge or data (oral, written, or in machine-readable form) which the
Executive may have obtained or will obtain during the course of or in connection
with the Executive's employment, including, without limitation, such inventions,
discoveries, information, knowledge, know-how or data relating to machines,
equipment, products, services, systems, software, research and/or development,
designs, compositions, formulae, processes, manufacturing procedures or business
methods, whether or not developed by the Executive, by others in the Company or
obtained by the Company from third parties, and irrespective of whether or not
such inventions, discoveries, information, knowledge, know-how or data have been
identified by the Company as secret or confidential, unless and until, and then
only to the extent that, such inventions, discoveries, information, knowledge,
know-how or data become available to the public otherwise than by the
Executive's act or omission.
(b) During the course of his employment by the Company, the
Executive shall not, except as required in the conduct of the Company's
business, disclose to others, or use, any of the information relating to present
and prospective marketing, sales and advertising programs and agreements with
representatives or prospective representatives of the Company, present or
prospective sources of supply or any other business arrangements of the Company,
including but not limited to, customers, customer lists, costs, prices and
earnings, whether or not such information is developed by the Executive, by
others in the Company or obtained by the Company from third parties and
irrespective of whether or not such information has been identified by the
Company as secret or confidential, unless and until, and than only to the extent
that, such information becomes available to the public otherwise than by the
Executive's act or omission.
(c) (i) The Executive agrees to disclose immediately to the
Company or any persons designated by it and to assign to the Company at its
option, or its successors or assigns, all inventions made, discovered, conceived
or first reduced to practice by the Executive, solely or jointly with others, at
any time during the time while employed by the Company, which inventions are
made, discovered or conceived either in the course or such employment, or with
the use of the Company's time, material, facilities or funds, or which relate to
or are suggested by any subject matter with which the Executive's employment by
the Company may bring the Executive into contact, or which relate to any
investigations or obligations undertaken by the Company; and the Executive
hereby grants and agrees to grant the right to the Company and its nominees to
obtain, for its own benefit and in its own name (entirely at its expense)
patents and patent applications including original, continuation, reissue,
utility and design patents, and applications, patents of addition, confirmation
patents, registration patents, petty patents, utility models, etc., and all
other types of patents and the like, and all renewals and extensions of any of
them for those inventions in any and all countries; and the Executive shall
assist the Company without further charge during the period of the Executive's
employment, through counsel designated by the Company to execute, acknowledge,
and deliver all such further papers, including assignments, applications for
Letters Patent (of the United States or of any foreign country), oaths,
disclaimers or other instruments and to perform such further acts, including
giving testimony or furnishing evidence in the prosecution or defense of
appeals, interferences, suits and controversies relating to any of the aforesaid
inventions, applications and patents as may be deemed necessary by the Company
or its nominees to effectuate the vesting or perfecting in the Company or its
nominees of all right, title and interest in and to said inventions,
applications and patents.
(ii) the Executive agrees to disclose immediately to
the Company or any persons designated by it and to assign to the Company, at its
option, or its successors or assigns, all works of authorship, including all
writings, manuals, computer programs, software and hardware, written or created
by the Executive solely or jointly with others, at anytime during the course of
his employment by the Company, which works are made or conceived either in the
course of such employment, or with the use of the Company's time, material,
facilities or funds, or which relate to or are suggested by any subject matter
with which the Executive's employment by the Company may bring the Executive
into contract or which relate to any investigations or obligations undertaken by
the Company; and the Executive hereby agrees that all such works are works made
for hire, of which the Company is the author and the beneficiary of all rights
and protections afforded by the law of copyright in any and all countries; and
the Executive will assist the Company without further charge during the term of
his employment, through counsel designated by the Company, to execute,
acknowledge, and deliver all such further papers, including assignments,
applications for copyright registration (in the United States or in any foreign
country), oaths, disclaimers or other instruments, and to perform such further
acts, including giving testimony or furnishing evidence in the prosecution or
defense of appeals, interferences, suits and controversies relating to any of
the aforesaid works, as may be deemed necessary by the Company or its nominees
to effectuate the vesting or perfecting in the Company or its nominees of all
rights and interest in and to said works and copies thereof, including the
exclusive rights of copying and distribution.
(d) As a matter of record, attached hereto as Exhibit A is a
complete list and brief description of all inventions, patented or unpatented,
which the Executive has made or conceived prior to his employment by the
Company, and which shall be excluded the terms from this Agreement, and as
Exhibit B, is a complete list and brief description of all works of authorship,
patented or unpatented, which the Executive has made or conceived prior to his
employment by the Company, which shall be excluded from the terms of this
Agreement. The Executive covenants that such lists are complete and accurate.
(e) (i) The Executive shall not during the "Non-Competition
Period," determined as hereinafter provided, engage in, represent or be
connected with, an officer, director, partner, employee, sales representative,
proprietor, consultant, associate, agent, co-venturer, or otherwise, any
business or activity competing with the business of the Company or its
subsidiaries or affiliates or any part thereof as conducted by them prior to the
termination of his employment in any geographic location where the Company
conducts business at the time of the termination of the employment. The term
"Non-Competition Period" as used herein means a period, immediately following
the termination of the employment of the Executive hereunder, of (A) 6 months,
or (B) a period shorter than 6 months if so designated by the Company by written
notice given to the Executive at least 20 days before the end of such shorter
period so designated by the Company.
(ii) The prohibitions in Subsection (i) of Section (e)
shall bind the Executive only so long as the Company pays him monthly, upon
demand, a sum at least equal to one hundred (100%) percent of the Executive's
monthly base pay at termination, as defined below, for each amount of such
unemployment during the Non-Competition Period. The term "monthly base pay"
means the Executive's monthly Salary, in all cases including bonus or other
extra compensation or benefits, and is subject to regular deductions for taxes,
social security payments, etc. If the Executive is being paid after his
termination of employment pursuant to the provisions of Subsection (c) and (d)
of Section 4, no payments are required to be made pursuant to this Subsection
(ii) of Section (e) so long as the payments under subsections (c) and (d) of
Section 4 are being made.
(f) (i) During the time employed by the Company, and for six
(6) months thereafter, the Executive shall not engage in business of the type
conducted by the Company with or solicit business of the type conducted by the
Company from any person, firm or entity which was a customer of the Company at
any time within two (2) years preceding the termination of his employment,
induce or attempt to induce any such customer of the Company to reduce its
business with the Company, solicit or attempt to solicit any employees of the
Company, to leave the employ of the Company or offer or cause to be offered
employment to any person who was employed by the Company at any time during the
two (2) years prior to the termination of his employment with the Company, while
employed by the Company, and for six (6) months thereafter, the Executive shall
also not engage in business of the type conducted by the Company with or solicit
business of the type conducted by the Company from any prospective customer of
the Company.
(ii) All computer software, computer programs, source codes,
object codes, magnetic tapes, printouts, samples, notes, records, reports,
documents, customer lists, photographs, catalogs and other writings, whether
copyrightable or not, relating to or dealing with the Company's business and
plans, and those of others entrusted to the Company which are prepared or
created by the Executive or which may come into his possession at any time
during his employment, are the property of the Company, and upon termination of
his employment, the Executive agrees to return all such computer software,
computer programs, source codes, object codes, magnetic tapes, printouts,
samples, notes, records, reports, documents, customer lists, photographs,
catalogs and writings and all copies thereof to the Company.
(g) If any of the rights or restrictions contained or provided
for in this Agreement shall be deemed top be unenforceable by reason of the
extent, duration or geographical scope, or other provisions hereof, or any other
provisions of this Agreement, the parties hereto contemplate that the court
shall reduce such extent, duration, geographical scope or other provisions and
enforce this Agreement in its reduced form for all purposes in the manner
contemplated hereby.
(h) The Executive agrees to cooperate with the Company with
respect to the Company obtaining life insurance on the life of the Executive
with the Company named as the beneficiary or disability insurance with respect
to Executive or both.
6. Indemnification and Attorneys' Fees. During the Term of his
employment and thereafter, the Company shall indemnify, hold harmless and defend
the Executive from all damages, claims, losses, and costs and expenses
(including reasonable attorney's fees) arising out of, in connection with, or
relating to all acts or omissions taken or not taken by him in good faith while
performing services for the Company and shall further reimburse the Executive
for all expenses (including attorney's fees) incurred in enforcing the benefits
of this Agreement. If and to the extent that the Company maintains, at any time
during the Term, an insurance policy covering the other officers and directors
of the Company against lawsuits, the Company shall use its best efforts to cause
the Executive to be covered under such policy upon the same terms and conditions
as other similarly situated officers and directors during the Term and for a
period of at least five (5) years thereafter.
7. Miscellaneous.
(a) Neither of the parties hereto shall have the right to
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party, provided, however, that this Agreement shall
inure to the benefit or and be binding upon the successors and assigns of the
Company upon any sale of all or substantially all of the Company's assets, or
upon any merger or consolidation of the Company with or into any other
corporation, all as though such successors and assigns of the Company and their
respective successors and assigns were the Company.
(b) This Agreement and the relationships of the parties in
connection with the subject matter of this Agreement shall be construed and
enforced according to the laws of the State of New York without giving effect to
the conflicts of laws rules thereof.
(c) This Agreement contains the full and complete agreement or
the parties relating to the employment of the Executive hereunder and supersedes
all prior agreements, arrangements or understandings, whether written or oral,
relating thereto. This Agreement may not be amended, modified or supplemented,
and no provision or requirement hereof may be waived, except by written
instrument signed by the Party to be charged.
(d) If any provision of this Agreement is held to be invalid
or unenforceable by any judgment of a tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and this
Agreement shall be carried out as nearly as possible according to its original
terms and intent.
(e) Except for applications for injunctive relief, any dispute
or question arising from this Agreement or its interpretation shall be settled
by arbitration in accordance with the commercial rules then in effect of the
American Arbitration Association. Hearings of the arbitrator(s) shall be held in
the county of Nassau, State of New York, unless the parties agree otherwise.
Judgment upon an award rendered by the arbitrator(s) may be entered in any court
of competent jurisdiction, including courts in the State of New York. Any award
so rendered shall be final and binding upon the parties hereto. All costs and
expenses of the arbitrator(s) shall be paid as determined by such arbitrator(s),
and all costs and expenses of experts, witnesses and other persons retained by
the parties shall be borne by them respectively, subject to the provisions of
Section 6 hereof. In the event that injunctive relief is requested, either of
the parties shall have the right to seek provisional remedies prior to an
ultimate resolution by arbitration, service of process to commence the
arbitration may be given as provided in Subsection (f) below.
(f) All notices which either party hereto is required or
permitted to give to the other will be given by certified mail or by personal
delivery, addressed to such other at the address referred to above, or at such
other place as either may from time to time designate by notice to the other in
writing. Three days after the date of mailing of any such notice and the date of
actual delivery if made by personal delivery will be deemed to be the date of
delivery thereof.
(g) No waiver by either party of any breach or nonperformance
of any provision or obligation of this Agreement shall be deemed to be a waiver
of any preceding or succeeding breach of the same or any other provision of this
Agreement.
(h) The enumeration and headings contained in this Agreement
are for convenience of reference only and are not intended to have any
substantive significance in interpreting this Agreement.
(i) Unless the context otherwise requires, whenever used in
this Agreement the singular shall include the plural, the plural shall include
the singular, and the masculine gender shall include the neuter or feminine
gender and vice versa.
(j) Whenever any determination is to be made or action to be
taken on a date specified in this Agreement, if such date shall fall upon a
Saturday, Sunday or a legal holiday, the date for such determination or action
shall be extended to the first business day immediately thereafter.
(k) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original document, but all
of which counterparts shall together constitute one and the same instrument.
This Agreement shall not be effective unless and until executed by all parties
hereto.
(l) Should any of the provisions of this Agreement require
judicial interpretation, it is agreed that the court or arbitrator interpreting
or construing this Agreement shall not apply a presumption that any provision
shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party
who itself or through its agents prepared the same, it being agreed that both
parties and their respective agents have participated in the preparation of this
Agreement.
(m) All provisions hereof which by their nature shall survive
the termination of the Executive's employment, including, without limitation,
the provisions in Section 5, shall survive the termination of the Executive's
employment.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
BCAM INTERNATIONAL, INC.
By:\s\ Glenn Santmire
------------------------
Authorized Board Member
\s\ Robert Wong
-----------------
Robert Wong
<PAGE>
SCHEDULE
267,500 7/3/95
175,000 2/16/95
7,500 7/21/94
25,000 2/16/95
25,000 6/22/95
--------
TOTAL 500,000
<PAGE>
BCAM INTERNATIONAL INC.
MASTHEAD MANAGEMENT INC.
100 Richmond Street East
Suite 435
TORONTO, Ontario
M5C 2P9
Attention: Norman B. Wright, President
Dear Sir,
CONSULTING AGREEMENT AND TERMS OF ENGAGEMENT
The purpose of this letter is to set out the terms and conditions of a
Consulting Agreement between BCAM International Inc. (the "Company") and
Masthead Management Inc. ("Masthead").
1. CONSULTING ENGAGEMENT
The Company agrees to retain Masthead as a consultant to provide
management and executive services to the Company. For its part,
Masthead undertakes to provide these services to the Company, and
specifically to retain the services of Norman B. Wright ("Mr. Wright")
as its agent for that purpose.
In order to facilitate the provision of services as contemplated
hereby, the Company will procure that Mr. Wright be appointed as
President and Chief Executive Officer of the HumanCad Systems Division
of the Company, and he will also be appointed as a director of the
Company and be appointed to the office of Vice-Chairman of the Company.
It is acknowledged by both Masthead and Mr. Wright that his appointment
as a director of the Company and of any subsidiaries, is, together with
all other directors, subject to review by the shareholders of the
Company annually. Whilst the Company agrees to use its best endeavours
to ensure that Mr. Wright will hold the positions described, it is
neither a condition nor provision of the continued retainer of Masthead
that Mr. Wright should retain the offices or the directorship described
in the event that shareholders of the Company determine otherwise.
The consulting services to be provided by Masthead shall be provided
from its base in Toronto, Ontario, Canada, and neither Masthead nor Mr.
Wright shall be required to relocate to any other place except with
their respective consent and approval.
The services to be provided by Masthead shall include the procurement
of the services of Mr. Wright for a basic minimum of 200 business
/working days per year during the term of this Agreement.
2. TERM OF ENGAGEMENT
The appointment under this Agreement shall be for a term of two years
commencing on April 7, 1997, and expiring on April 7, 1999, unless
previously determined in the circumstances provided for below or unless
extended after that expiration date. Prior to April 7, 1999, the
Company and Masthead now express their mutual intent to negotiate
together in good faith for a subsequent renewal of the engagement for a
one year term, which extended term may, by mutual agreement, be renewed
again for further terms of one year or more or less as may be mutually
agreed between the parties.
3. NON-COMPETITION
The parties acknowledge that the Consulting Agreement entered into
hereby will oblige Masthead and Mr. Wright to provide their services
and devote their principal efforts to the Company's business, though it
does not provide the Company with exclusive rights to the services of
Masthead or of Mr. Wright. Masthead and Mr. Wright acknowledge that
they will be under a duty not to participate in competitive activities
such as the provision of facilities or services to any corporation or
business which is engaged in a competitive way with any of the
Company's operations.
4. FEES AND REMUNERATION AND EXPENSES
In consideration of the Agreement of Masthead to provide the services
described herein, the Company agrees to make the following payments and
grant the further considerations described below:-
(a) the Company will pay to Masthead a basic consulting fee at the
rate of US$125,000.00 per year, to be paid in twelve equal
monthly instalments, payable without deductions on the last
day of each calendar month;
(b) the Company will pay to Masthead a performance bonus on an
annual basis within 30 days of the end of the Company's fiscal
year. The amount of such bonus shall be fixed by the board of
directors of the Company acting upon recommendations from
Management and its Compensation Committee, provided that the
minimum amount of incentive bonus payable to Masthead in
respect of each of the first two years of the engagement will
be not less than US$25,000.00;
(c) the Company will require Masthead to maintain a motor vehicle
of appropriate quality to reflect the standing of Mr. Wright
in the Company'S hierarchy. In consideration of Masthead'S
agreement to provide such a vehicle, the Company will pay to
Masthead a non-accountable vehicle allowance of US$700.00 per
month and will also reimburse Masthead the cost of insurance
and maintenance of such vehicle upon delivery of properly
vouched evidence of expenditures on such account;
(d) the Company will reimburse Masthead with the costs of
maintaining an executive health plan for Mr. Wright including
US$300,000.00 Term Life Insurance, such reimbursement to be
made upon presentation of properly vouched evidence of
expenditures on this account;
(e) the Company will maintain an insurance policy for the
protection of its directors and officers and will procure that
Mr. Wright is included as a named insured on such policy;
(f) the Company will reimburse to Masthead all costs and expenses
incurred by Masthead and/or Mr. Wright in connection with the
provision of services under this Agreement including, but not
limited to promotion travel, long distance telephone, cellular
phone, copier costs, couriers and general petty disbursements,
as well as accommodation and related costs in respect of any
business conducted or services performed outside Toronto.
5. INCENTIVE STOCK OPTION PLAN
The Company has an Incentive Stock Option Plan, but is presently
engaged in a reorganization of its share capital and a refinancing. The
Company accordingly agrees to grant to Masthead (or, if necessary
pursuant to applicable provisions of the United States Internal Revenue
Code applicable to such Plans to Mr. Wright directly), incentive stock
options to purchase the equivalent of 500,000 common shares in the
capital of the Company as now presently (pre-reorganization)
structured. The exercise price of such options shall be equal per share
to the price per share being paid in the presently proposed refinancing
and such options shall all be exercisable within five years from the
date of vesting. Of the 500,000 options so granted, 250,000 shall vest
immediately upon commencement of the consulting arrangement
contemplated by this Agreement, and the remaining 250,000 shall vest on
the first day of the second year of the term of engagement.
<PAGE>
6. TERMINATION
This Agreement is for a fixed term of two years and subject to
extensions by mutual agreement thereafter. This agreement may be
terminated at any time by mutual agreement between the Company and
Masthead, provided that any such change shall not be effective or
binding unless recorded in writing and signed by both the Company and
Masthead.
Notwithstanding the fixed term of the engagement, the Company may
terminate the engagement of Masthead at any time for cause including
but not limited to any material breach of the provisions of this
Agreement by Masthead or any servant or agent of Masthead engaged by
Masthead to provide services hereunder. It is acknowledged by Masthead
that in the event that it fails to provide the services of Mr. Wright
for a period in excess of 40 working days total in any six month period
may, in the discretion of the Company, be considered sufficient cause
for the purposes of this provision.
7. CONFIDENTIAL INFORMATION AND NON-COMPETITION
(a) Both Masthead and Mr. Wright acknowledge that in their
respective positions as consultants and executive of the
Company, each of them will acquire information about certain
matters and things which are confidential to the Company and
which information is the exclusive property of the Company
including but without limiting the generality of the foregoing
the following:-
(i) customer lists;
(ii) pricing policies;
(iii) technology and technological information, whether
patented or not; (iv) market research and product development
information.
(b) Each of Masthead and Mr. Wright acknowledge that such
information as referred to in subclause (a) above could be
used to the detriment of the Company. Accordingly Masthead and
Mr. Wright undertake to treat confidentially all such
information, and agree not to disclose the same to any third
party, either during, or after its termination for whatever
reason.
(c) Each of Masthead and Mr. Wright acknowledge that, without
prejudice to all and any rights of the Company, an injunction
is the only effective remedy to protect the Company's rights
and property as set out in subclauses (a) and (b) above.
(d) Masthead and Mr. Wright acknowledge that as a consultant and
executive officer of the Company respectively, they will gain
a knowledge of the Company's technology and products and a
close working relationship with the Company's suppliers and
customers which knowledge and relationships would, if used
for competitive purposes or made available to a competitor,
injure the Company. Masthead and Mr. Wright therefore agree
that, for a period of not less than twelve months from the
date of termination of this Agreement for any reason or
cause, they will neither accept engagement or employment or
any other position with the intent of providing information
or services to any developer or manufacturer of products
competitive with those of the Company, nor solicit or accept
business with respect to products competitive with those of
the Company in any State or country in which the Company's
products have been marketed during the period of twenty-four
months prior to the date of such termination.
(e) The Company has established, and may amend from time to time,
a detailed Confidentiality and Non-Competition Agreement for
execution by all of its consultants and employees, which
document may include the foregoing provisions together with
further and more detailed provisions for the protection of the
Company's interests and property; Masthead and Mr. Wright may
be asked to execute a copy of such Agreement at the
commencement of the engagement, or subsequently, and to
execute and deliver copies of amended versions thereof, if
any, from time to time, and each of them undertakes to execute
the same as and when called upon to do so.
If the foregoing terms are accepted, please countersign and date the original
and the enclosed two copies of this letter at the foot where indicated.
I look forward to a long and mutually beneficial relationship.
Yours truly,
BCAM INTERNATIONAL INC.
\s\ Michael Strauss
- ----------------------
Per:
MASTHEAD MANAGEMENT INC. AND NORMAN
B. WRIGHT HEREBY CONFIRM ACCEPTANCE
OF THE FOREGOING TERMS.
MASTHEAD MANAGEMENT INC.
\s\ Norman B. Wright
----------------------
NORMAN B. WRIGHT
Dated: April 7 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the Condensed Consolidated Balance Sheet, Condensed
Consolidated Statements of Operations and Condensed Consolidated
Statements of Cash Flows, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000856143
<NAME> BCAM International, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1.000
<CASH> 240,964
<SECURITIES> 0
<RECEIVABLES> 73,796
<ALLOWANCES> 11,245
<INVENTORY> 26,158
<CURRENT-ASSETS> 1,060,643
<PP&E> 857,258
<DEPRECIATION> 695,725
<TOTAL-ASSETS> 1,559,366
<CURRENT-LIABILITIES> 394,058
<BONDS> 0
0
0
<COMMON> 167,179
<OTHER-SE> 993,840
<TOTAL-LIABILITY-AND-EQUITY> 1,559,366
<SALES> 0
<TOTAL-REVENUES> 287,232
<CGS> 0
<TOTAL-COSTS> 150,349
<OTHER-EXPENSES> 1,057,503
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (908,678)
<INCOME-TAX> 0
<INCOME-CONTINUING> (908,678)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (908,678)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
