<PAGE>
Page 1 of 11 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
MARLTON TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.10 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
879517 10 0
-----------
(CUSIP Number)
Stephen M. Goodman, Esquire
Morgan, Lewis & Bockius LLP
One Logan Square
Philadelphia, PA 19103-6993
215-963-5224
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
December 31, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
Page 2 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Stanley D. Ginsburg
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF, 00
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 288,192 shares
SHARES ______________________________________________________________
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 1,809,000 shares
REPORTING ________________________________________________________________
PERSON
WITH 9 SOLE DISPOSITIVE POWER
740,442 shares
______________________________________________________________
10 SHARED DISPOSITIVE POWER
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,097,192 shares
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.9%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 3 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ira Ingerman
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) [ ]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF, 00
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 455,292 shares
SHARES ______________________________________________________________
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 1,809,000 shares
REPORTING ________________________________________________________________
PERSON
WITH 9 SOLE DISPOSITIVE POWER
735,642 shares
______________________________________________________________
10 SHARED DISPOSITIVE POWER
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,264,292 shares
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
32.3%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 4 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Lawrence Schan
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) [ ]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
PF, 00
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 100 shares
SHARES ______________________________________________________________
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 1,809,000 shares
REPORTING ________________________________________________________________
PERSON
WITH 9 SOLE DISPOSITIVE POWER
904,600 shares
______________________________________________________________
10 SHARED DISPOSITIVE POWER
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,809,000 shares
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.8%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 4 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DMS Store Fixtures Shareholders Trust
________________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) [ ]
________________________________________________________________________________
3 SEC USE ONLY
________________________________________________________________________________
4 SOURCE OF FUNDS*
AF
________________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
________________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
________________________________________________________________________________
7 SOLE VOTING POWER
NUMBER OF 1,809,000 shares
SHARES ______________________________________________________________
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING ________________________________________________________________
PERSON
WITH 9 SOLE DISPOSITIVE POWER
0
______________________________________________________________
10 SHARED DISPOSITIVE POWER
0
________________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,809,000 shares
________________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
________________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.8%
________________________________________________________________________________
14 TYPE OF REPORTING PERSON*
00
________________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 6 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
Reference is made to Schedule 13D previously filed under date of June 15,
1992 by Stanley D. Ginsburg and Ira Ingerman relating to the common stock, $.10
par value (the "Common Stock"), of Marlton Technologies, Inc. (the "Company"),
as amended by Amendment No. 1 filed separately by Mr. Ginsburg and Mr. Ingerman
under date of August 7, 1995 and by Amendment No. 2 filed separately by Mr.
Ginsburg, Mr. Ingerman and Lawrence Schan (together, the "DMS Principals") under
date of July 25, 1997. This Amendment No. 3 is being filed by each of the DMS
Principals and the DMS Store Fixtures Shareholders Trust ("Trust")
(collectively, the "Filing Persons") as a result of the acquisition of DMS Store
Fixtures, L.P. ("DMS") by the Company (the "Acquisition") and the formation of
the Trust. The Filing Persons hereby amend the Schedule 13D as follows:
Item 2. Identity and Background.
(a) This statement is being filed by Stanley D. Ginsburg, Ira Ingerman,
Lawrence Schan and the Trust.
(b) Mr. Ginsburg's address is Sutton Terrace, Apartment 1016, 50 Belmont
Avenue, Bala Cynwyd, PA 19004. Mr. Ingerman's address is 1320 Centennial Road,
Narberth, PA 19072. Mr. Schan's address is 250 King Manor Drive, King of
Prussia, PA 19406. The Trust's address is Attn: Ira Ingerman, 250 King Manor
Drive, King of Prussia, PA 19406.
(c) The principal occupation of Messrs. Ginsburg and Ingerman is, either
directly or indirectly through entities owned by them, real estate investment
and investment in operating companies. Mr. Ginsburg is also co-Chairman and
Chief Executive Officer of DMS Store Fixtures, Corp. ("New DMS"), a wholly owned
subsidiary of the Company. Mr. Ingerman also is the co-Chairman and Chief
Financial Officer of New DMS. The principal occupation of Mr. Schan is President
and Chief Operating Officer of New DMS. The sole purpose of the Trust is to hold
and vote the shares of Common Stock contributed to the Trust by the DMS
Principals in accordance with the terms of the DMS Store Fixtures Shareholders
Trust Agreement.
(d) None of the Filing Persons have been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
last five years.
(e) During the last five years, none of the Filing Persons were a party to
a civil proceeding of a judicial or administrative body as a result of which
proceeding any of the Filing Persons were or are subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws.
(f) Each of DMS Principals is a United States citizen. The Trust was
established under the laws of the Commonwealth of Pennsylvania.
Item 3. Source and Amount of Funds or Other Consideration.
On December 31, 1997, pursuant to the Purchase Agreement (the "Purchase
Agreement") dated as of July 18, 1997 between the DMS Principals, Equivest
Development, Inc. III ("Equivest"), DMS Store Fixtures, Inc., DMS G.P., Inc. and
the Company, the Company acquired all of the limited and general
<PAGE>
Page 7 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
partnership interests in DMS in exchange for $14,500,000 in cash (the "Cash
Consideration") and 2,000,000 shares of Common Stock (the "Stock
Consideration"). An additional 250,000 shares of Common Stock are issuable if
New DMS achieves at least $12,500,000 in pre-tax earnings over a five-year
period (the "Additional Stock Consideration"). If earned, Mr. Schan will receive
50% of the Additional Stock Consideration and Messrs. Ginsburg and Ingerman will
each receive 25% of the Additional Stock Consideration. Of the shares issued
under the Purchase Agreement, the Trust received an aggregate of 1,809,000
shares of the Stock Consideration (452,500 shares contributed by each of Messrs.
Ginsburg and Ingerman and 904,500 shares contributed by Mr. Schan), as more
fully described in Item 6, and the remaining 191,000 shares of Stock
Consideration were received by DMS employees who entered into a Shareholders
Agreement dated December 30, 1997 (the "Shareholders Agreement"), as more fully
described in Item 6. The ultimate distribution of the Stock Consideration among
the DMS Principals is dependent on the continued employment of the DMS
Principals by DMS following the Acquisition, as described in Item 6.
The Cash Consideration from the Acquisition was allocated in following
manner: 14.53% to Equivest, 17.735% to each Messrs. Ginsburg and Ingerman and
50% to Mr. Schan. Messrs. Ginsburg and Ingerman each own 50% of Equivest.
Item 4. Purpose of Transaction.
The shares of Common Stock acquired in the Acquisition and those shares of
Common Stock previously held by certain of the Filing Persons are being held for
investment purposes. Subject to the terms of the Trust, depending upon market
conditions and each Filing Person's perception of the attractiveness of holding
Common Stock as an investment, the Filing Persons may determine to sell all or a
material portion of their shares of Common Stock, or to acquire additional
shares of Common Stock or other securities of the Company, in each case, in the
open market, in privately negotiated transactions or otherwise.
Subject to the foregoing, the Filing Persons have no plans or proposals
that relate to or would result in any of the events described in subparagraphs
(a) through (i) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Of the 1,809,000 shares of Common Stock held by the Trust, 452,250 shares
were contributed by Mr. Ginsburg, 452,250 shares were contributed by Mr.
Ingerman and 904,500 were contributed by Mr. Schan. By virtue of the provisions
of the Trust (see Item 6), Messrs. Ginsburg, Ingerman and Schan have shared
voting power with respect to the 1,809,000 shares held by the Trust. In
addition, Mr. Ginsburg directly owns 288,192 shares of Common Stock, Mr.
Ingerman directly owns 283,392 shares of Common Stock and Mr. Schan directly
owns 100 shares of Common Stock. Also, Mr. Ingerman has sole voting power over
the 171,900 shares held by him as custodian under the Shareholder Agreement as
described in Item 6.
As a result of the foregoing, Mr. Ginsburg may be deemed to beneficially
own 2,097,192 shares (29.9% of the shares of Common Stock outstanding); Mr.
Ingerman may be deemed to beneficially own 2,264,292 shares (32.3% of the shares
of Common Stock outstanding); Mr. Schan may be deemed to beneficially own
1,809,100 shares (25.8% of the shares of Common Stock outstanding) and the Trust
may be deemed to beneficially own 1,809,000 shares (25.8% of the shares of
Common Stock outstanding). The Filing Persons
<PAGE>
Page 8 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
collectively may be deemed to beneficially own 2,552,584 shares (36.4% of the
shares of Common Stock outstanding). All percentages are calculated based upon
7,017,414 shares of Common Stock outstanding as of December 31, 1997.
Of the shares beneficially owned by the Filing Persons, Mr. Ginsburg has
sole voting power with respect to 288,192 shares, shared voting power with
respect to 1,809,000 shares and sole investment power with respect to 740,442
shares; Mr. Ingerman has sole voting power with respect to 455,292 shares,
shared voting power with respect to 1,809,000 shares and sole investment power
with respect to 735,642 shares; Mr. Schan has sole voting power with respect to
100 shares, shared voting power with respect to 1,809,000 shares and sole
investment power with respect to 904,600 shares; and the Trust has sole voting
power with respect to 1,809,000 shares.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
A. DMS Store Fixtures Shareholders Trust Agreement.
On December 31, 1997, the Trust received 1,809,000 shares of Common Stock
as a result of the Acquisition (904,500 shares of Common Stock by Mr. Schan and
452,250 shares of Common Stock by each of Messrs. Ingerman and Ginsburg) to the
Trust. The DMS Principals will contribute any Additional Stock Consideration to
the Trust. The Trust has a term expiring March 31, 2003.
The Trust was established pursuant to the DMS Store Fixtures Shareholders
Trust Agreement (the "Trust Agreement"). The Trust provides that each of the DMS
Principals will be vested in the shares he contributed to the Trust in five
equal annual increments. In the event that any DMS Principal were to cease being
employed by the Company without the consent of the Company or were to be
terminated by the Company for cause (as defined in the Trust Agreement), prior
to December 31, 2002, such person will be entitled to receive only those shares
that have vested at that time, and all unvested shares of Common Stock will be
divided pro rata among the remaining DMS Principals. Prior to vesting, the DMS
Principals may not sell, transfer or otherwise convey the Common Stock that they
contributed to the Trust; however, vested shares may be distributed to the DMS
Principal who contributed such shares and be transferred by such DMS Principal
upon the his request and with the consent of the other DMS Principals who have
beneficial ownership in the Trust at the time of the request.
The Common Stock held in the Trust will be voted by the unanimous consent
of the DMS Principals who have a beneficial ownership in the trust at the time
of the vote. Mr. Ingerman, as trustee under the Trust, will vote the shares held
by the Trust in the manner agreed upon by the DMS Principals, or, in the absence
of unanimous agreement as to how to vote, will abstain from voting the Shares
held by the Trust.
The Trust will terminate prior to the expiration of its term in the event
that (i) the Company and each of the DMS Principals then employed by DMS agree
to terminate the Trust or (ii) the Company ceases to exist pursuant to a merger,
consolidation, recapitalization, reorganization or dissolution. The Trust
provides that each of the DMS Principals will have the right to receive his
allocable share of the Stock Consideration and any Additional Stock
Consideration upon the dissolution of the Trust provided that such DMS Principal
<PAGE>
Page 9 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
remains (with certain permitted exceptions such as death or disability or
termination of employment without cause) an employee of the Company as of the
date of such dissolution.
The duration and vesting terms of the Trust may only be amended by the DMS
Principals with the Company's prior written consent.
The foregoing summary of the Trust Agreement is qualified in its entirety
by reference to the Trust Agreement dated December 31, 1997 attached hereto as
Exhibit B.
B. DMS Employee Shareholders Agreement
In contemplation of the Acquisition, certain employees of DMS (the "DMS
Employees") received 171,900 shares of Common Stock (the "DMS Employee Shares")
in exchange for shares of DMS Store Fixtures, Inc. that they received as a bonus
prior to the Acquisition. Each of the DMS Employees entered into the
Shareholders Agreement pursuant to which Mr. Ingerman serves as custodian of the
DMS Employee Shares and has been granted a proxy to vote the DMS Employee
Shares. The Shareholders Agreement will be in effect until March 31, 2003.
Under the Shareholders Agreement, the DMS Employees will be vested in their
shares, if they remain employed by New DMS at the expiration of the term of the
Shareholders Agreement (with certain permitted exceptions such as death or
disability or termination of employment without cause, as defined in the
Shareholders Agreement) and the performance targets (the "Performance Targets")
are met. In the event that any of the DMS Employees were to cease being employed
by New DMS without the consent of New DMS or were to be terminated by New DMS
for cause, as defined in the Shareholders Agreement, prior to the expiration of
the term of the Shareholders Agreement, all unvested shares allocable to those
DMS Employees will not vest and will be forfeited. Additionally, if the
Performance Targets are not met, the DMS Employees unvested shares will be
forfeited. Under the Performance Targets, all of the shares will vest if the
increase in gross revenue for the year ending December 31, 2002 of New DMS is at
least $15,000,000 greater than the gross revenue of DMS for the year ended
December 31, 1997. If the increase in gross revenue for the same period is
greater than $11,000,000 but less than $15,000,000, a percentage of the shares
will vest, as detailed on Schedule A of the Shareholders Agreement.
At the termination of the Shareholders Agreement, all of the forfeited
shares will be allocated in the following manner: (i) if the Performance Targets
are met, all of the forfeited shares will be allocated to the DMS Principals and
the DMS Employees, pro rata in proportion to the Stock Consideration received by
such person and (ii) if the Performance Targets are not met, all of the
forfeited shares will be allocated among the DMS Principals in proportion to the
Stock Consideration received by such persons. The custodian has the discretion
at any time to reduce or eliminate the Performance Targets in his sole
discretion.
The foregoing summary is qualified in its entirety by reference to the
Shareholders Agreement dated December 30, 1997 attached hereto as Exhibit C.
<PAGE>
Page 10 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
Item 7. Material to be Filed as Exhibits.
Exhibit A - Purchase Agreement dated as of July 18, 1997 (incorporated by
reference to Amendment No. 2 to Schedule 13D).
Exhibit B - DMS Store Fixtures Shareholders Trust Agreement dated December
31, 1997.
Exhibit C- Shareholders Agreement dated December 30, 1997.
<PAGE>
Page 11 of 11 Pages
CUSIP NO. 879517 10 0
AMENDMENT NO. 3 TO SCHEDULE 13D
SIGNATURE
1. By the execution of this statement, or any amendment thereof, each of
Messrs. Ginsburg, Ingerman and Schan and the Trust hereto agree that such
statement or amendment shall be filed on behalf of each of them pursuant to
Section 13(d) of the Securities Exchange Act of 1934.
2. After reasonable inquiry and to the best of our knowledge and belief,
certify that the information set forth in this statement is true, complete and
correct.
/s/ Stanley D. Ginsburg
--------------------------------
Stanley D. Ginsburg
/s/ Ira Ingerman
--------------------------------
Ira Ingerman
/s/ Lawrence Schan
--------------------------------
Lawrence Schan
DMS STORE FIXTURES SHAREHOLDERS TRUST
By:/s/ Ira Ingerman
----------------
Ira Ingerman
Trustee
Date: January 8, 1998
<PAGE>
Exhibit B to Amendment No. 3 to Schedule 13D
DMS STORE FIXTURES SHAREHOLDERS TRUST AGREEMENT
DMS Store Fixtures Shareholders Trust Agreement (this
"Agreement") is made as of December 31, 1997 by and among Stanley D. Ginsburg
("Ginsburg"), Ira M. Ingerman ("Ingerman") and Lawrence Schan ("Schan").
Ginsburg, Ingerman and Schan are sometimes referred to collectively as the
"Shareholders" or individually as a "Shareholder."
WHEREAS, as a result of certain merger transactions (the
"Acquisition") contemplated in that certain Purchase Agreement dated as of July
18, 1997 by and among Ginsburg, Ingerman, Schan, Equivest Development, Inc. III,
DMS Store Fixtures, Inc., DMS G.P., Inc., and Marlton Technologies, Inc. (the
"Purchase Agreement"), the Shareholders, as shareholders of DMS Store Fixtures,
Inc. and DMS G.P., Inc. (together, the "Merging Companies"), shall be entitled
to receive, in exchange for the Merging Companies' partnership interests in DMS
Store Fixtures, L.P. ("DMS"), 1,809,000 shares of common stock (collectively the
"Shares") of Marlton Technologies, Inc. (the "Company") at the Closing and may
be able to receive an additional 250,000 Shares of Common Stock upon achievement
of certain performance targets (the "Additional Shares").
WHEREAS, the Shareholders want to maximize their opportunity
to earn the Additional Shares and believe that they can do so by working
together as a team to enable DMS Store Fixtures, Inc., a subsidiary of the
Company ("New DMS"), to achieve the performance targets. The Shareholders
believe that the departure of any of the three Shareholders would have an
adverse effect on their opportunity to earn the Additional Shares and an adverse
effect on the value of the Shares and Additional Shares. The Shareholders wish
to provide an incentive to each other to help achieve the performance targets
over the five year earn-out period in order to earn the Additional Shares, and
they wish to compensate the remaining Shareholders, through a form of liquidated
damages, for the loss and reduction in value that they anticipate they may incur
if any one of the Shareholders leaves during the five year earn-out period. The
trust will also allow the Shareholders to vote as a group with respect to the
Shares held by the trust. The Shareholders therefore have voluntarily agreed to
deposit all the Shares that the Shareholders receive in exchange for the Merging
Companies' partnership interests in DMS, and any Additional Shares to be
received by the Shareholders as a result of the Acquisition, into a trust upon
the terms hereinafter provided.
WHEREAS, the Shares and Additional Shares that each
Shareholder contributes to the trust shall be credited to a separate account for
the Shareholder, and it is intended that such separate account shall be treated
as a "grantor trust" of which the Shareholder is the grantor for federal income
tax purposes under Section 677 of the Internal Revenue Code of 1986, as amended.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing premises and
of the mutual covenants and agreements herein contained, the parties hereto,
intending to be legally bound hereby, have agreed and do hereby agree with each
other as follows:
1. Creation of Trust. The Shareholders hereby create a trust
to be called the DMS Store Fixtures Shareholders Trust (the "Trust"), which
shall be governed in accordance with the terms of this Agreement.
2. Term of Trust. The Trust shall be in effect for five years
from the date hereof, except that the Trust shall terminate earlier if (i) the
Company and each of the Shareholders who at such time are employed by New DMS
agree to terminate the Trust or (ii) the Company ceases to exist pursuant to a
transaction contemplated by Sections 7.4 or 7.5 or otherwise.
3. Trustee. Ingerman shall act as the trustee of the Trust
(the "Trustee"). If Ingerman's employment with New DMS is terminated for any
reason, Ginsburg and Schan (or, if either of them is no longer employed by New
DMS, the one who is still employed by New DMS) shall choose a successor Trustee.
4. Deposit of Shares, Vesting.
4.1 Deposit of Shares. The Shareholders shall deposit
1,809,000 Shares with the Trustee, as follows: (a) Schan shall deposit 904,500
Shares and (b) Ingerman and Ginsburg shall each deposit 452,250 Shares, and the
Shareholders shall deposit the Additional Shares in the Trust if and when
issued. The certificates evidencing the Shares shall be delivered to the Trustee
as herein provided and shall be registered in the name of the Trust or shall be
endorsed or accompanied by duly executed stock powers and such other
assignments, certificates of authority and consent to transfer instruments as
may be reasonably requested by the Trustee in order to transfer record ownership
of the Shares to the Trust. All Shares shall be registered in the name of "DMS
Store Fixtures Shareholders Trust" and all certificates representing the Shares
shall contain a legend that such certificates are held subject to the provisions
of this Agreement. The Shares and Additional Shares that each Shareholder
contributes to the Trust shall be credited to a separate account under the Trust
for the Shareholder.
4.2 Administration of Shares. The Shares and Additional
Shares of each Shareholder shall be held in the Trust until termination of the
Trust, except as otherwise provided in this Agreement. At the termination of the
Trust, each Shareholder shall receive a distribution of the Shares and
Additional Shares then held in his account in the Trust. If a Shareholder
terminates employment with New DMS while the Trust is in existence, the
Shareholder's Shares and Additional Shares may be forfeited as described below:
-2-
<PAGE>
(a) No forfeiture shall occur if the Shareholder's
employment with New DMS occurs as a result of any of the following events (an
"Involuntary Termination Event"): (i) the Shareholder's death, (ii) termination
by New DMS of the Shareholder's employment under his Employment Agreement with
New DMS ("Employment Agreement") other than for cause ("Cause") pursuant to
Section 9.3 of his Employment Agreement, (iii) mutual separation of employment
by the Shareholder and New DMS other than for Cause, (iv) separation of
employment by the Shareholder as a result of a breach of his Employment
Agreement by New DMS, or (v) termination of employment of the Shareholder under
his Employment Agreement due to long-term disability. Promptly following an
Involuntary Termination Event, the Trustee shall take all such actions as may be
required to cause the terminated Shareholder or his estate to receive the Shares
and Additional Shares, if and when earned, of such Shareholder re-registered in
the name of the holder of the Trust Certificate without any further restrictions
on such Shares and Additional Shares pursuant to this Agreement.
(b) If a Shareholder's employment with New DMS
terminates other than as a result of an Involuntary Termination Event while the
Trust is in existence, the Shareholder shall forfeit the following portion of
the Shares and Additional Shares of the Shareholder:
Date of Termination Forfeited Portion
------------------- -----------------
Before December 31, 1998 100%
On or after December 31, 1998 80%
but before December 31, 1999
On or after December 31, 1999 60%
but before December 31, 2000
On or after December 31, 2000 40%
but before December 31, 2001
On or after December 31, 2001 20%
but before December 31, 2002
On or after December 31, 2002 0%
As of any point in time, the Shares and Additional Shares that would be
forfeited if the Shareholder terminated employment according to the foregoing
table are referred to as the "Restricted Shares," and the Shares and Additional
Shares that would not be forfeited are referred to as the "Unrestricted Shares".
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<PAGE>
4.3 Sale of Unrestricted Shares. If a Shareholder desires
to sell any or all of his Unrestricted Shares that are held in the Trust, such
Shareholder shall notify the other Shareholders who then have a beneficial
interest in the Trust and request their permission to do so, and only after the
other Shareholders agree, may such Shareholder sell his Unrestricted Shares. The
Shareholder shall withdraw such Unrestricted Shares from the Trust before they
are sold. A Shareholder may not sell Restricted Shares held in the Trust.
4.4 Restricted Shares. If a Shareholder's employment with
New DMS terminates for any reason other than an Involuntary Termination Event
while the Trust is in existence, the Shareholder's then Restricted Shares shall
be forfeited according to the table in Section 4.2(b). The forfeited Shares
shall remain in the Trust in a separate account until the end of the term of the
Trust (as described in Section 2 above). Any cash dividends as described in
Section 7.1 or other dividends as described in Section 7.3 that are
distributable with respect to the forfeited Shares during the remaining term of
the Trust shall be paid proportionately to the Shareholders who are employed by
New DMS at the time the dividends are paid or who have had an Involuntary
Termination Event. At the end of the term of the Trust, the forfeited Shares
shall be divided proportionately among the Shareholders who are then employed by
New DMS or who have had an Involuntary Termination Event during the term of the
Trust, based on the Shares and Additional Shares then held in the Trust for each
such Shareholder or previously distributed pursuant to Section 4.2(a). The
forfeited Shares shall be considered Unrestricted Shares when they are allocated
to the accounts of such Shareholders.
4.5 Unregistered Shares. All Shares deposited in the Trust
have not been registered under the Securities Act of 1933 (the "Act") or any
state securities law, and may not be assigned, sold or transferred in violation
of such Act or any such laws. The Shares are subject to registration rights
pursuant to the terms of the Purchase Agreement, which may be exercised by the
Trustee on behalf of the Shareholders.
5. Issuance of Trust Certificates. In exchange for the Shares
delivered hereunder, the Trustee shall issue and deliver to each Shareholder a
certificate (the "Trust Certificate") or certificates, substantially in the form
attached hereto as Exhibit A, representing, in the aggregate, the number of
Shares deposited by that Shareholder. Trust Certificates shall evidence the
Shareholder's beneficial interest in the Trust and the Shares deposited with the
Trustee in accordance herewith. The holder of a Trust Certificate shall have all
rights of a holder of the Shares represented by the Trust Certificate except as
otherwise provided herein. If a Shareholder forfeits Shares pursuant to Section
4.4, the Shareholder's Trust Certificate shall be modified to reflect the number
of Shares forfeited (or it shall be surrendered if, all the Shareholder's Shares
are forfeited).
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<PAGE>
6. Powers and Duties of the Trustee.
6.1 Unanimous Voting. If the Shareholders are requested by
the Company to vote on any matter in connection with any meeting or consent in
lieu of meeting of Shareholders of the Company, the Trustee shall inform each
Shareholder who has a beneficial interest in the Trust about the vote and shall
solicit a decision from each such Shareholder on such vote. The Trustee must
vote all Shares as unanimously requested by such Shareholders, and if the
Shareholders cannot come to agreement as to how to vote, the Shares shall not be
voted at all.
6.2 Powers of Trustee. The Trustee shall have the
exclusive, full and unqualified right and power in his discretion, as long as
any Shares are subject to the provisions of this Agreement (i) subject to 6.1,
to vote all Shares, either in person or by proxy, for every purpose for which
the Shares may be voted according to the Company's Articles of Incorporation or
Bylaws, or to give written consent in lieu of voting thereon to any corporate
act of the Company, including, without limitation, the election of the directors
of the Company who may be elected by holders of the Common Stock, any amendment
or amendments of the Articles of Incorporation of the Company, the merger or
consolidation of the Company into or with any other corporation or corporations,
the sale of all or any part of the assets of the Company and the liquidation or
dissolution of the Company, (ii) to waive notice of any regular or special
meeting of stockholders of the Company, (iii) to call meetings of stockholders
and (iv) to exercise all shareholder's rights and powers with respect to the
Shares; provided, however, that if the Company shall be party to a merger,
consolidation or other transaction as a result of which the holders of the
Shares are entitled by law to surrender such Shares of stock and receive in
exchange therefor the fair market value thereof in cash, securities of another
issuer or property of any kind whatsoever, the Trustee will, as soon as the
Trustee is notified by the Company of the existence of such rights, notify each
Shareholder of the transaction and of the existence of such rights and take
appropriate steps to perfect and preserve such rights.
7. Dividends and Distributions.
7.1 Cash Dividends. The Trustee shall give the Company or
its dividend disbursing agent the names and addresses of the holders of the
Trust Certificates, which list shall set forth the number of Shares represented
by the Trust Certificates registered on the record date for any cash dividends,
and the Trustee shall request the Company to make distributions of cash
dividends, on behalf of the Trustee, directly to such registered holder of the
Trust Certificate or to any third party designated in writing by such holders.
In the event that any cash dividends are paid directly to the Trustee, the
Trustee shall promptly pay over such dividends to the then registered holders of
the Trust Certificates according to their respective interests at the record
date.
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<PAGE>
7.2 Stock Dividends. If any dividend or distribution in
respect of the Shares held by the Trustee is paid, in whole or in part, in
voting securities of the Company, the Trustee shall hold the certificates for
such shares which are received on account of such dividend and such shares shall
thereafter for all purposes be treated as part of the Shares, including without
limitation, with respect to forfeiture (i.e., stock dividends on Shares will
become Unrestricted Shares at the same time as the underlying Shares). The
holders of the Trust Certificates issued under this Trust Agreement on the date
for the determination of those stockholders of the Company entitled to receive
such dividend paid in Common Stock, shall be entitled to receive a Trust
Certificate evidencing such holders' pro rata share of the number of such shares
received as such dividend.
7.3 Dividends in Other Assets. If any dividend or
distribution in respect of the Shares held by the Trustee is paid, in whole or
in part, in assets of the Company not specified in subsections 7.1 and 7.2 of
this Section 7, the Trustee shall give the Company the names and addresses of
the then registered holders of the Trust Certificates, which shall set forth the
number of Shares represented by the Trust Certificates, and the Trustee shall
request the Company to make such distribution, on behalf of the Trustee,
directly to the registered holders of the Trust Certificates. In the event the
distributions are paid directly to the Trustee, the Trustee shall promptly pay
over such distributions to the registered holders of the Trust Certificates
according to their respective interests at the record date.
7.4 Mergers, etc. If, during the term hereof, the Company
shall merge with, or consolidate into, another corporation or corporations or
other business entity, and the Company shall not be the surviving corporation,
all voting securities representing any such corporation or other business entity
and other consideration received by the Trustee in exchange for or with respect
to the Shares as a result of such merger, consolidation, recapitalization or
reorganization shall be distributed to the holders of the Trust Certificates as
their interests shall appear, against surrender by such holders of any Trust
Certificates, which represented Shares which were surrendered by the Trustee
pursuant to the terms of such merger, consolidation, recapitalization or
reorganization.
7.5 Dissolution. If, during the term hereof, the Company
shall be dissolved or liquidated in such a manner as to entitle the holders of
Shares to liquidating dividends, the Trustee shall request all such dividends to
be distributed directly by the Company to the holders of the Trust Certificates
in proportion to their respective beneficial ownership in the Shares upon which
dividends are paid. In the event that such dividends are paid directly to the
Trustee, the Trustee shall promptly pay over such dividends to the holders of
the Trust Certificates according to their respective interests at the record
date.
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<PAGE>
8. Liability.
8.1 No Liability. The Trustee shall not be liable for the
consequence of any vote cast or consent given and shall not incur any liability
to the holders of the Trust Certificate, except for willful misconduct
evidencing bad faith or gross negligence. The holders of the Trust Certificates
agree to indemnify the Trustee and hold the Trustee harmless from any and all
liabilities which they may incur as a result of carrying on the business of the
Trust, except for willful misconduct evidencing bad faith or gross negligence.
8.2 Interested Transactions. No contract or other
transaction between the Company and the Trustee, or any person, firm or
corporation in which the Trustee may be interested or with which any of them may
be affiliated or in any way related, shall be rendered invalid by the fact of
their being a party thereto, or being interested in or affiliated with or
related to such person, firm or corporation, and the Trustee and any such
person, firm or corporation are hereby relieved from any liability under any
such contract or pursuant to any such transaction resulting from the fact that
the Trustee, or any such person, firm or corporation, may be interested.
9. Filing of Agreement. An executed counterpart of the Trust
Agreement shall be filed at the principal office of the Company.
10. Termination. Upon the termination of the Trust hereunder,
each Shareholder who has a beneficial interest in the Trust shall surrender his
Trust Certificate, and the Trustee shall take all such action as may be required
to cause the Shareholder's Shares and any other securities that may have been
deposited in the Trust for the benefit of the Shareholder to be re-registered in
the name of the registered holder of the Trust Certificate.
11. Governing Law. This Trust shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without regard to principles of conflicts of law.
12. Third Party Beneficiary. The Shareholders acknowledge that
the Company shall be entitled, as a third party beneficiary, to the rights,
benefits and covenants contained herein; provided, that the Shareholders shall
be able to modify jointly and in writing all the provisions hereof, in their
sole discretion, except for Sections 2 and 4, which can only be modified with
the prior written agreement of the Company.
13. Transfer. The Shareholders may not transfer their rights
under this Trust to any third party, except, as part of estate planning, a
Shareholder, after having obtained the consent of the other Shareholders, may
assign his economic rights under this Trust to one or more family members or
trusts for the benefit of such family members, so long as such Shareholder
retains decision-making power with respect to all actions required to be taken
by a Shareholder under the terms of this Trust.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
TRUSTEE: SHAREHOLDERS:
/s/ Ira M. Ingerman /s/ Stanley D. Ginsburg
- ----------------------------- -------------------------------
Ira M. Ingerman Stanley D. Ginsburg
/s/ Ira M. Ingerman
--------------------------------
Ira M. Ingerman
/s/ Lawrence Schan
--------------------------------
Lawrence Schan
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<PAGE>
EXHIBIT A
No. _____________ ____________ Shares
Trust Certificate
This certifies that _____________________ is the beneficial
owner of ______ shares of Common Stock ("Common Stock") of Marlton Technologies,
Inc., a New Jersey corporation (the "Company"), which shares have been deposited
with the Trustee of the DMS Store Fixtures Shareholders Trust (the "Trust").
Upon the surrender of this certificate, when permitted by and in accordance with
the terms of the Trust, the registered holder hereof will be entitled to receive
a certificate representing the same number of shares of Common Stock. In
addition, the registered holder has the right, upon satisfaction of certain
conditions, to receive an additional _____ shares of Common Stock, which shares
shall be deposited with the Trustee and administered according to the terms of
the Trust.
This certificate is issued subject to, and the holders by
accepting the same consents to, all the terms of the Trust, copies of which are
on file at the principal office of the Company.
This certificate is transferable upon the books of the Trust
by the holders of record hereof, either in person or by attorney thereto duly
authorized only in accordance with the rules established for that purpose by the
Trust.
TRUST INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE SECURITIES
LAW, AND MAY NOT BE ASSIGNED, SOLD OR TRANSFERRED IN VIOLATION OF SUCH ACT OR
ANY SUCH LAWS AND MAY NOT OTHERWISE BE ASSIGNED, SOLD OR TRANSFERRED WITHOUT
COMPLYING WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE TRUST.
IN WITNESS WHEREOF, the Trustee has executed this Certificate
as of this ___ day of ________, 1997.
--------------------------------
Trustee
<PAGE>
Exhibit C to Amendment No. 3 to Schedule 13D
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement"), is entered into as of
December 30, 1997 among the owners of shares of common stock, par value $.01
("Common Stock") of DMS Store Fixtures who execute a counterpart signature page
hereto (the "Employees"), and Ira Ingerman, as custodian (the "Custodian"). The
Employees are sometimes individually referred to herein as an "Employee" and
collectively referred to herein as the "Employees."
WHEREAS, the Employees have received shares of Common Stock
(collectively, including shares of any successors, the "Shares") of DMS Store
Fixtures, Inc., a Pennsylvania corporation, ("DMS Store Fixtures") as
compensation for services rendered; and
WHEREAS, on December 10, 1997, the shareholders of DMS Store Fixtures
unanimously consented to merge DMS Store Fixtures with a newly formed subsidiary
of Marlton Technologies Inc., a New Jersey corporation ("Marlton") (the
surviving company to the merger is referred to as the "Surviving Company") in
accordance with the purchase agreement dated July 18, 1997 (the "Purchase
Agreement"), after which the Shares shall be converted by operation of law into
an aggregate of 191,000 shares of Marlton; and
WHEREAS, the Shares have been issued to the Employees subject to each
Shareholder entering into this Agreement; and
WHEREAS, the Employees will receive directly 10 percent of their Shares
upon the signing of this Agreement, with the remaining 90 percent of their
shares delivered to the Custodian, with stock powers endorsed in blank, pursuant
to the terms of this Agreement; and
WHEREAS, following the merger of DMS Store Fixtures with and into the
Surviving Company, Ira M. Ingerman ("Ingerman"), Stanley D. Ginsburg
("Ginsburg") and Lawrence Schan ("Schan") have agreed to enter into the DMS
Store Fixtures Shareholders Trust (the "Voting Trust") and contribute 1,809,000
shares of Marlton into the Voting Trust (the "Voting Trust Shares"); and
WHEREAS, the additional 250,000 shares of common stock of Marlton that
Ingerman, Ginsburg and Schan have the potential of receiving upon the
achievement of certain performance targets set forth in the Purchase Agreement
are not subject to this Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Restrictions on Transfer of Shares. The 90 percent of the shares of
the Employees, shall be subject to the terms of this Agreement. No Employee may
transfer any Shares except as set forth in this Agreement. Any transfer in
violation of this Agreement shall be void and shall not be recognized by DMS
Store Fixtures or the Surviving Company. For purposes of this Agreement, the
term "transfer" shall mean any disposition whatsoever, including without
limitation, disposition by sale, gift, bequest, assignment, hypothecation or
pledge, and any involuntary disposition or
<PAGE>
disposition by law or pursuant to court decree. Each Shareholder's agreement not
to transfer Shares shall be interpreted to include an agreement to take such
steps as may be necessary under the circumstances to avoid an involuntary
transfer of Shares or transfer of Shares by operation of law. All transferees of
Shares shall be bound by the obligations of the transferor under this Agreement.
2. Term of Agreement. The Agreement shall be in effect for the period
beginning the date hereof and ending March 31, 2003.
3. Custodian. Ingerman shall act as Custodian under the Agreement. If
Ingerman can no longer serve as Custodian, or if Ingerman ceases to be employed
by the Surviving Company, the trustee of the Voting Trust shall serve as
Custodian.
4. Additional Agreements with Respect to Shares.
4.1 Vesting. The Shares of each Employee shall vest as set
forth on Schedule A if (i) the Employee continues employment with the Surviving
Company through the date the Shares vest according to the Vesting Schedule on
Schedule A (the "Vesting Date") or the Employee's employment with the Surviving
Company terminates before the Vesting Date because of a Permissible Termination
Event (as defined below), and (ii) if the performance targets set forth on
Schedule A (the "Performance Targets") are met. The Custodian shall determine
whether the Performance Targets are met for purposes of this Agreement, based
upon the financial statements of the Surviving Company included in Marlton's
audited financial statements on or before March 31, 2003. For the purposes of
this Agreement, "Permissible Termination Event" shall mean: (i) an Employee's
death, (ii) termination of employment due to long-term disability under the
Surviving Company's long-term disability plan, or (iii) involuntary termination
of employment of such employee by the Surviving Company without Cause. For the
purposes of this Agreement, "Cause" shall mean: a finding by the Surviving
Company that an Employee has breached his or her employment or service to the
Surviving Company, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his or her
employment or service, or has disclosed trade secrets or confidential
information of the Surviving Company to persons not entitled to receive such
information.
4.2 Forfeiture. If an Employee's employment with the
Surviving Company terminates before the Vesting Date for any reason other than a
Permissible Termination Event, the unvested Shares allocable to the Employee
shall not vest and shall be forfeited. Additionally, if the Performance Targets
are not met, the Employee's unvested Shares shall be forfeited. Shares that are
forfeited are referred to as "Forfeited Shares."
4.3 Forfeited Shares. The Forfeited Shares shall be
allocated at the end of the five years in the following manner: (i) if the
Performance Targets are met, the Forfeited Shares shall
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<PAGE>
be allocated to Ginsburg, Ingerman and Schan who are then employed by the
Surviving Company or who had an Involuntary Termination Event as defined in
Section 4.2 of the Voting Trust Agreement, and those of the Employees who are
then employed by the Surviving Company or who had a Permissible Termination
Event, allocated to Ginsburg, Ingerman, Schan and to such Employees pro rata in
proportion to Ginsburg, Ingerman, Schan and such Employees' right to receive
shares of Common Stock (the Shares and Voting Trust Shares), immediately before
the allocation, under this Agreement or the Voting Trust Agreement; or (ii) if
the Performance Targets are not met, the Forfeited Shares will be allocated
among those of Ginsburg, Ingerman and Schan who are then employed by the
Surviving Company or had an Involuntary Termination Event, allocated pro rata in
proportion to their right to receive the Voting Trust Shares under the Voting
Trust Agreement.
4.4 Distribution of Shares. Following the allocation of any
Forfeited Shares pursuant to Section 4.3, all Shares of the Employees will be
distributed to the Employees, subject to applicable federal, state and local
income and other payroll tax withholding requirements pursuant to Section 7.1
hereof.
4.5 Legend. All certificates representing Shares shall be
marked with the following legend:
THIS CERTIFICATE AND THE SHARES REPRESENTED THEREBY ARE HELD SUBJECT TO
THE TERMS AND CONDITIONS OF A CERTAIN SHAREHOLDERS AGREEMENT AMONG THE
CORPORATION AND ITS THEN SHAREHOLDERS, DATED AS OF DECEMBER ____, 1997,
AND ALL AMENDMENTS THERETO, AND MAY NOT BE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE TERMS AND PROVISIONS THEREOF. A COPY OF THE
SHAREHOLDERS AGREEMENT AND ALL AMENDMENTS THERETO IS ON FILE AT THE
PRINCIPAL OFFICE OF THE CORPORATION.
5. Powers and Duties of the Custodian.
5.1 Voting. If the Employees are requested by the Surviving
Company to vote on any matter in connection with any meeting or consent in lieu
of meeting of the shareholders of the Surviving Company, the Custodian shall
inform each Employee regarding the vote. All Employees agree that the Custodian
is given absolute proxy to vote the Shares under this Agreement.
5.2 Powers of Custodian. The Custodian shall have the
exclusive, full and unqualified right and power in his discretion, as long as
any Shares are subject to the provisions of this Agreement (i) to vote all
Shares, either in person or by proxy, for every purpose for which the Shares may
be voted according to Marlton's Articles of Incorporation or Bylaws, or to give
written consent in lieu of voting thereon to any corporate act of Marlton,
including, without limitation, the election of the directors of Marlton who may
be elected by the holders of the Common Stock, any
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<PAGE>
amendment or amendments of the Articles of Incorporation of Marlton, the merger
or consolidation of Marlton into or with any other corporation or corporations,
the sale of all or any part of the assets of Marlton and the liquidation or
dissolution of Marlton, (ii) to waive notice of any regular or special meeting
of shareholders of Marlton, (iii) to call meetings of shareholders, (iv) to
exercise all shareholder's rights and powers with respect to the Shares and (v)
to act as proxy and attorney-in-fact for the Employees, during the term of this
Agreement, with full power of substitution and resubstitution to vote all
Shares; provided, however, that if Marlton shall be party to a merger,
consolidation or other transaction as a result of which the holders of the
Shares are entitled by law to surrender such Shares of stock and receive in
exchange therefor the fair market value thereof in cash, securities of another
issuer or property of any kind whatsoever, the Custodian will, as soon as the
Custodian is notified by Marlton of the existence of such rights, notify each
Employee of the transaction and of the existence of such rights and take
appropriate steps to perfect and preserve such rights.
6. Liability.
6.1 No Liability. The Custodian shall not be liable for the
consequences of any vote cast or consent given and shall not incur any liability
to the Employees to this Agreement, except for willful misconduct evidencing bad
faith or gross negligence. The Employees agree to indemnify the Custodian and
hold the Custodian harmless from any and all liabilities which the Custodian may
incur as a result of carrying out the terms of the Agreement, except for willful
misconduct evidencing bad faith or gross negligence.
6.2 Interested Transactions. No contract or other
transaction between the Surviving Company or Marlton and the Custodian, or any
person, firm or corporation in which the Custodian may be interested or with
which any of them may be affiliated or in any way related, shall be rendered
invalid by the fact of their being a party hereto, or being interested in or
affiliated with or related to any such person, firm or corporation, and the
Custodian and any such person, firm or corporation are hereby relieved from any
liability under any such contract or pursuant to any such transaction resulting
from the fact that the Custodian, or any such person, firm or corporation, may
be interested.
7. Withholding of Taxes All distributions under this Agreement shall be
subject to applicable federal (including FICA), state and local tax withholding
requirements. The Surviving Company shall have the right to deduct from all
distributions paid in cash, or from other wages paid to the Employee, any
federal, state or local taxes required by law to be withheld with respect to
such distributions. In the case distributions paid in Common Stock, the
Surviving Company may require the Employee or other person receiving such shares
to pay to the Surviving Company the amount of any such taxes that the Surviving
Company is required to withhold with respect to such distributions, or the
Surviving Company may deduct from other wages paid by the Surviving Company the
amount of any withholding taxes due with respect to such distributions.
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<PAGE>
8. Miscellaneous.
8.1 Severability. In the event any part of this Agreement is
found to be void or unenforceable, the remaining provisions are intended to be
separable and binding with the same effect as if the void or unenforceable part
were never the subject of agreement. If any court of competent jurisdiction
shall determine that the duration, geographic limit or any other aspect of any
restriction contained in this Agreement is unenforceable, it is the intention of
the parties that the covenant involved in such determination shall not thereby
be terminated but shall be deemed amended to the extent required to render it
valid and enforceable, and such amendment shall apply only with respect to the
operation of such covenant in the jurisdiction of the court that has made the
adjudication.
8.2 Further Assurances. Each party hereto shall execute such
additional documents or instruments requested by any other party as may be
reasonably necessary or desirable to effect the purposes and carry out the
provisions of this Agreement.
8.3 Representatives, Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the heirs, executors,
administrators, personal representatives, successors, transferees and assigns of
the parties hereto.
8.4 Notices. Notice, requests, demands and other
communications relating to the Agreement and the transactions contemplated
herein shall be in writing and shall be deemed to have been duly given if and
when (a) delivered personally; or (b) mailed by registered or certified mail,
postage prepaid, return receipt requested; or (c) telecopied or cabled, to the
address of the respective parties as follows:
If to the Surviving Company, to:
DMS Store Fixtures, Inc.
250 King Manor Drive
King of Prussia, PA 19406
Philadelphia, PA 19154
Attn: Ira M. Ingerman
If to any Shareholder, to such Shareholder's address as
shown on the signature page hereto
or to such other address as may be specified by written notice from time to time
by the party entitled to receive such notice. Any notices, requests, demands or
other communications by telecopy or cable shall be confirmed by letter given in
accordance with (a) or (b) above.
8.5 Change of Address. Any party hereto may designate a
different address to which notices are to be sent by giving notice of such
change of address in conformity with the provisions of this Section.
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<PAGE>
8.6 Time of Notice. Unless otherwise specified in this
Agreement, all notices shall be deemed to have been given when delivered or
mailed in accordance with this Section.
8.7 Waiver. Failure of the parties to enforce at any time
any of the provisions of the Agreement to require at any time performance by the
other parties of any of the provisions hereof shall in no way be construed to be
a present or future waiver of such provisions, or in any way affect the validity
of this Agreement or any part hereof, or the right of the respective parties
thereafter to enforce each and every such provision. Express waiver by any party
does not constitute a waiver of any future obligation to comply with such
provision, condition or requirement unless such express waiver is written and
clearly provides to the contrary.
8.8 Specific Performance. The Shares are acknowledged by the
parties to be special and unique property. The remedy at law for any breach of
any provision of this Agreement is acknowledged by the parties to be inadequate
and an aggrieved party seeking relief or remedies for such a breach shall have
the right and is hereby granted the privilege, in addition to all other remedies
at law or equity, to specific performance and to temporary or permanent
injunctive relief without the necessity of proving actual damage.
8.9 Governing Law. The terms of this Agreement shall be
interpreted in accordance with the laws of the Commonwealth of Pennsylvania
without regard of principles of conflicts of law.
8.10 Section Headings. All section headings are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
8.11 Entire Agreement and Amendment. This Agreement states
the entire agreement reach between the parties with respect to the transactions
contemplated hereby and may not be amended or altered except by written
instrument executed by the Surviving Company and all Employees then owning
shares.
8.12 Counterparts. This Agreement may be executed in several
counterparts, each of which is original. This Agreement and any counterparts so
executed shall be deemed to be one and the same document.
8.13 Arbitration. Any controversy or dispute arising out of
or relating to this Agreement or breach hereof shall be finally settled by
arbitration in Philadelphia, Pennsylvania, in accordance with the then
prevailing Rules of the American Arbitration Association. Judgment upon an
arbitration award hereunder may be rendered in any court having jurisdiction
thereof or application may be made to any such court for judicial acceptance of
the award or an order of enforcement, as the case may be.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders Agreement as of the date first above written.
EMPLOYEE
Signed by Each Shareholder
-----------------------------------
Signature
/s/ Ira M. Ingerman
-----------------------------------
Ira M. Ingerman
Custodian
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<PAGE>
SCHEDULE A
Performance Targets
The shares subject to this Shareholders Agreement shall vest upon the
achievement of increases in gross revenue of the Surviving Company so that gross
revenue for the year ending December 31, 2002 shall have increased as compared
with the gross revenue for the year ending December 31, 1997 ("Current Annual
Revenue") in accordance with the schedule below.
Increase in Gross Revenue for the
Percentage of Total Year Ending December 31, 2002
Shares that Vest Above Current Annual Revenue
0% Less than $ 11,000,000
10% $ 11,000,000 - 11,999,999
25% $ 12,000,000 - 12,999,999
45% $ 13,000,000 - 13,999,999
70% $ 14,000,000 - 14,999,999
100% $ 15,000,000 or greater
The Custodian has the discretion at any time to reduce or eliminate the
foregoing Performance Targets in such Custodian's sole discretion.
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