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6
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended March 31, 1996
Commission file number 1-19254
Lifetime Hoan Corporation
(Exact name of registrant as specified in its charter)
Delaware 11-2682486
(State or other jurisdiction of incorporation or organization) (I.R.S.
Employer Identification No.)
One Merrick Avenue, Westbury, NY 11590
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 683-6000
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter periods 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
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.01 Par Value 11,258,398 outstanding as of April 30, 1996
INDEX
LIFETIME HOAN CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Balance Sheets as of March 31, 1996
and December 31, 1995 3
Condensed Statements of Income for the
Three months ended March 31, 1996 and 1995 4
Condensed Statement of Changes in Stockholders' Equity for the
Three months ended March 31, 1996 5
Condensed Statements of Cash Flows for the
Three months ended March 31, 1996 and 1995 6
Notes to Condensed Financial Statements for the
Three months ended March 31, 1996 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION 11
SIGNATURES 13
ITEM 1. FINANCIAL STATEMENTS
CONDENSED BALANCE SHEETS
LIFETIME HOAN CORPORATION
March 31, December
31,
1996 1995
(unaudited (Note)
)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $461,221 $89,797
Accounts receivable, less allowances of $969,000
(1996)
and $663,000 (1995) 13,317,319 12,682,401
Merchandise inventories 42,718,000 43,337,000
Prepaid expenses 5,251,361 4,578,813
Deferred income taxes 1,273,000 1,186,000
Other current assets 948,808 695,241
TOTAL CURRENT ASSETS 63,969,709 62,569,252
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation
and amortization of $3,058,668 (1996) and 7,924,133 7,882,166
$2,841,202 (1995)
EXCESS OF COST OVER NET ASSETS ACQUIRED, net of
accumulated
amortization of $724,400 (1996) and $708,100 1,954,802 1,971,102
(1995)
OTHER INTANGIBLES , net of accumulated
amortization of
$45,000 (1996) and $24,000 (1995) 2,431,748 2,452,748
OTHER ASSETS 892,488 880,766
$77,172,88 $75,756,03
0 4
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and trade acceptances $2,811,057 $3,072,401
Accrued expenses 6,351,884 5,931,414
Income taxes 1,206,426 232,447
Short term borrowings 3,200,000 4,600,000
TOTAL CURRENT LIABILITIES 13,569,367 13,836,262
STOCKHOLDERS' EQUITY
Series B Preferred Stock, $1 par value,
authorized 2,000,000
shares; none issued
Common Stock, $.01 par value, authorized
25,000,000 shares;
issued and outstanding 11,258,398 (1996) and 112,584 112,573
11,257,276 (1995)
Paid-in capital 61,109,470 61,103,589
Retained earnings 3,518,910 1,845,007
64,740,964 63,061,169
Less:
Notes receivable for shares issued to 1,048,064 1,048,064
stockholders
Deferred compensation 89,387 93,333
63,603,513 61,919,772
$77,172,88 $75,756,03
0 4
Note: The Balance Sheet at December 31, 1995 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See notes to condensed financial statements.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
LIFETIME HOAN CORPORATION
Three Months Ended
March 31,
1996 1995
Net sales $19,273,398 $18,678,086
Cost of sales 10,179,650 9,663,046
9,093,748 9,015,040
Selling, general and 6,319,003 6,124,281
administrative expenses
INCOME FROM OPERATIONS 2,774,745 2,890,759
Other (income) deductions:
Interest expense 63,584 47,871
Other (income), net (32,742) (55,405)
INCOME BEFORE INCOME TAXES 2,743,903 2,898,293
Provision for federal, state
and local
income taxes 1,070,000 1,132,000
NET INCOME $1,673,903 $1,766,293
NET INCOME PER SHARE $.15 $.15
WEIGHTED AVERAGE SHARES
OUTSTANDING 11,458,611 11,701,303
See notes to condensed financial statements
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
LIFETIME HOAN CORPORATION
Common Stock Paid-in Retained Notes Defer
red
Receivable
Shares Amount Capital Earnings from Com
pensati Total
Stockholders on
Balance at
December 31, 11,257,2 $112,5 $61,103,5 $1,845,00 ($1,048,064) ($
93,333) $61,919,7
1995 76 73 89 7
72
Exercise of stock 1,122 11 5,881
5,892
options
Net income for
the
three months
ended
March 31, 1,673,903
1,673,903
1996
Amortization of
deferred
3,946 3,946
compensation
Balance at
March 31, 11,258,3 $112,5 $61,109,4 $3,518,91 ($1,048,064) ($8
9,387) $63,603,5
1996 98 84 70 0
13
See notes to condensed financial statements.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
LIFETIME HOAN CORPORATION
Three Three
Months Months
Ended Ended
March 31, March 31,
1996 1995
OPERATING ACTIVITIES
Net income
$1,673,90 $1,766,29
3 3
Adjustments to reconcile net income to
net cash
provided by (used in) operating
activities:
Depreciation and amortization 266,673 202,981
Amortization of deferred compensation 3,946 9,629
Deferred tax (benefit) (87,000) (131,000)
Provision for losses on accounts 221,958 53,046
receivable
Changes in operating assets and
liabilities:
Accounts receivable (856,876) 1,616,591
Merchandise inventories 619,000 (4,298,00
0)
Prepaid expenses, other current assets
and other assets (937,837) 140,232
Accounts payable and trade acceptances
and accrued expenses 159,126 (173,999)
Income taxes payable 973,979 177,000
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 2,036,872 (637,227)
INVESTING ACTIVITIES
Purchase of property and equipment, net (271,340) (165,422)
NET CASH (USED IN) INVESTING ACTIVITIES (271,340) (165,422)
FINANCING ACTIVITIES
Repayment of short term borrowings, net (1,400,00
0)
Proceeds from the exercise of warrants, _1_ 43,448
net
Proceeds from the exercise of stock 5,892 53,747
options
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (1,394,10 97,195
8)
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 371,424 (705,454)
Cash and cash equivalents at beginning of 89,797 2,724,429
period
CASH AND CASH EQUIVALENTS AT END OF $461,221 $2,018,97
PERIOD... 5
See notes to condensed financial
statements
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
LIFETIME HOAN CORPORATION
Note A - Basis of PresentationThe accompanying unaudited
condensed financial statements have been prepared in accordance
with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. 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 period ended March 31, 1996 are not necessarily indicative
of the results that may be expected for the year ended December
31, 1996. For further information, refer to the financial
statements and footnotes thereto included in the Company's annual
report on Form 10-K for the year ended December 31, 1995.
Note B - Inventories
Merchandise inventories, principally finished goods, are recorded
at the lower of cost (first-in, first-out basis) or market.
Note C - Line of Credit AgreementThe Company has available an
unsecured $25,000,000 line of credit with a bank (the "Line")
which may be used for short term borrowings or letters of credit.
As of March 31, 1996, the Company had $3,200,000 of short term
borrowings and $5,721,000 of letters of credit outstanding. The
line is cancelable by either party at any time. Borrowings under
the Line bear interest payable quarterly at the higher of the
bank's prime rate or the Federal Funds Rate plus 1/2 of 1% (8.25%
at March 31, 1996), or a negotiated lower rate to be agreed upon
at the time of the short term borrowing. The Company is charged a
nominal fee on the entire Line.
Note D - Capital Stock
Stock Option Plan: During 1996 incentive stock options to
purchase 771 shares of common stock at $11.36 issued in 1995 were
canceled.
As March 31, 1996, 623,740 shares of Common Stock have been
reserved for issuance upon the exercise of options.
1996 Incentive Stock Option Plan: In April 1996, the Board of
Directors of the Company approved the adoption of the Lifetime
Hoan Corporation 1996 Incentive Stock Option Plan (the "ISO
Plan"), subject to stockholder approval. The ISO Plan authorizes
the granting of 250,000 options to purchase Common Stock to
officers of the Company and its subsidiary. No individual officer
may be granted more than 175,000 options to purchase Common
Stock. The ISO Plan authorizes the issuance of incentive stock
options as defined in Section 422 of the Internal Revenue Code.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
LIFETIME HOAN CORPORATION
Note D - Capital Stock (continued)
Net Income Per Share: Net income per common share is based on
net income divided by the weighted average number of common
shares and equivalents outstanding during the periods.
Note E- Employment Agreements
In April 1996, the Company entered into employment agreements
with its President and Executive Vice President, providing for
annual salaries of $700,000 and $400,000, respectively, and for
the payment to them of bonuses pursuant to the Company's 1996
Incentive Bonus Compensation Plan (the "Bonus Plan") (See Note
F). The employment agreements will continue in force until April
1999, and thereafter for additional periods of one year unless
terminated by either the Company or the executive. The named
executives have the right to terminate their respective
agreements in the event the Bonus Plan is not approved by the
Company's stockholders.
In April 1996, the Company entered into an employment agreement
with its Vice President-Manufacturing, providing for an annual
salary of $150,000.
Note F - 1996 Incentive Bonus Compensation Plan
In April 1996, the Board of Directors of the Company adopted,
subject to stockholder approval, the Bonus Plan. The Bonus Plan
provides for the award of a bonus, with respect to each of the
ten fiscal years of the Company beginning with the 1996 fiscal
year, to the President and the Executive Vice President of the
Company, providing they are then in the employ of the Company.
The bonus payable to each executive is an amount equal to 3.5% of
pretax net income, before any provision for executive
compensation, stock options exercised during the year under the
Company's 1991 Stock Option Plan and any extraordinary items.
Note G - Farberwarer Acquisition
On April 2, 1996, the Company acquired certain assets of
Farberware, Inc. ("Farberware"). Under the terms of a joint
venture agreed to by the Company and Syratech Corporation, the
Company acquired a 99 year, royalty-free, exclusive right to use
the Farberwarer name in connection with the product lines covered
by its existing license agreement with Farberware. The Company
also acquired all of the Farberwarer outlet stores. Rights to
license the Farberwarer name for use by third parties are to be
held by a joint venture, owned equally by the Company and a
wholly owned subsidiary of Syratech Corporation. The purchase
price consists of cash of $9.5 million plus the value of the
outlet store inventory (estimated to be $3,660,000).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth the operating data of the Company
as a percentage of net sales for the periods indicated below.
Three Months
Ended
March 31,
1996 1995
Net sales 100. % 100. %
0 0
Cost of sales 52.8 51.7
Gross profit 47.2 48.3
Selling, general and 32.8 32.8
administrative expenses
Income from operations 14.4 15.5
Other (income), expense 0.1 0.0
Income before income taxes 14.3 15.5
Income taxes 5.6 6.0
Net Income 8.7 % 9.5 %
Three Months Ended March 31, 1996
Compared to Three Months March 31, 1995
Net Sales
Net sales for the three months ended March 31, 1996 were
$19,273,000 an increase of $595,000 or 3.2% from the comparable
1995 period. The sales growth was primarily due to net sales of
the new Hoffritzr line, increased net sales of the Smart Choice
impulse line and increased net sales of products sold under
licenses, partially offset by reduced sales of other Company
products.
Gross Profit
Gross profit for the three months ended March 31, 1996 was
$9,094,000, an increase of $79,000 or 0.9% over the comparable
1995 period. Gross profit as a percentage of net sales was 47.2%
for the three months ended March 31, 1996 as compared to 48.3%
for the 1995 period. This decrease is due primarily to changes
in product mix.
Selling, General and Administrative ExpensesSelling, general and
administrative expenses for the three months ended March 31, 1996
were $6,319,000 an increase of $195,000 or 3.2% from the
comparable 1995 period. Selling, general and administrative
expenses as a percentage of net sales were 32.8% for both the
1996 and 1995 periods. This dollar increase was primarily
attributable to increases in warehouse personnel costs, other
warehouse expenses and bad debt expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company has available an unsecured $25,000,000 line of credit
with a bank (the "Line") which may be used for short term
borrowings or letters of credit.
Borrowings under the Line bear interest payable quarterly at the
higher of the lender's prime rate or 1/2% above Federal Funds
Rate (8.25% at March 31, 1996), or a negotiated lower rate to be
agreed upon at the time of the short term borrowing. The Company
is charged a nominal fee on the entire Line. As of March 31,
1996, the Company had $3,200,000 of borrowings and $5,721,000 of
letters of credit outstanding under the Line and, as a result,
the availability under the Line was $16,079,000. The Line is
cancelable by either party at any time.
At March 31, 1996, the Company had cash and cash equivalents of
$461,000 versus $90,000 at December 31, 1995, an increase of
$371,000. The increase is primarily attributable to the Company's
net cash provided by operations primarily offset by repayment of
short term debt. Cash provided by operating activities was
$2,036,000 for the three months ended March 31, 1996 versus cash
used in operating activities of $637,000 for the comparable 1995
period. The differential of $2,673,000 if primarily due to (1) a
decrease of $619,000 in inventory during the 1996 period as
compared to an increase of $4,298,000 in inventory during the
1995 period and (2) an increase in income taxes payable of
$974,000 during the 1996 period as compared to an increase of
$174,000 during the 1995 period offset by (1) accounts receivable
increased by $857,000 for the 1996 period as compared to a
decrease of $1,617,000 for the 1995 period and (2) an increase of
$938,000 in prepaid expenses, other current assets and other
assets during the 1996 period versus a decrease of $140,000 for
the 1995 period.
On April 2 1996, the Company acquired certain assets of
Farberware, Inc. ("Farberware"). Under the terms of a joint
venture agreed to by the Company and Syratech Corporation, the
Company acquired a 99 year, royalty-free, exclusive right to use
the Farberwarer name in connection with the product lines covered
by its existing license agreement with Farberware. The Company
also acquired all of the Farberware outlet stores. Rights to
license the Farberwarer name for use by third parties are to be
held by a joint venture, owned equally by the Company and a
wholly owned subsidiary of Syratech Corporation. The purchase
price consisted of cash of $9.5 million plus the value of the
outlet store inventory (estimated to be $3,660,000). The company
financed the acquisition through borrowings under the line.
The Company's business does not require material uses of cash for
capital expenditures.
Products are sold to retailers primarily on 30-day credit terms,
and to distributors primarily on 60-day credit terms.
The Company believes that its cash and cash equivalents,
internally generated funds and its existing credit arrangements
will be sufficient to finance its operations for the next 12
months.
The results of operations of the Company for the periods
discussed have not been significantly affected by inflation or
foreign currency fluctuation. The Company negotiates its purchase
orders with its foreign manufacturers in United States dollars.
Thus, notwithstanding any fluctuation in foreign currencies, the
Company's cost for any purchase order is not subject to change
after the time the order is placed. However, the weakening of the
United States dollar against local currencies could lead certain
manufacturers to increase their United States dollar prices for
products. The Company believes it would be able to compensate for
any such price increase.
PART II - OTHER INFORMATION
Item 5. Other Information
In April 1996, the Board of Directors adopted the
Lifetime Hoan Corporation 1996 Incentive Stock Option Plan (the
"ISO Plan") and the Lifetime Hoan Corporation 1996 Incentive
Bonus Compensation Plan (the "Bonus Plan"). The ISO Plan and the
Bonus Plan are being submitted for approval at the next Annual
Meeting of Shareholders, to be held on June 11, 1996.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits in the first quarter of 1996:
Exhibit No. Description
Financial Data Schedule
10.1 Employment agreement dated April 7, 1996 with
Milton L. Cohen.
10.2 Employment agreement dated April 7, 1996 with
Jeffrey Siegel.
10.3 Employment agreement dated April 7, 1996 with
Craig Phillips.
10.23 Lifetime Hoan Corporation 1996 Incentive Stock
Option Plan.
10.24 Lifetime Hoan Corporation 1996 Incentive Bonus
Compensation Plan.
(b) Reports on Form 8-K :
The following information was contained in an 8-K filed on
January 8, 1996 - Effective December 15, 1995, the Company
entered into agreements with each of Milton L. Cohen, Jeffrey
Siegel and Craig Phillips, officers and directors of the Company,
to extend the due dates of 9% promissory notes to December 31,
2000. The Company further agreed to enter into new employment
agreements with Messrs. Cohen, Siegel and Phillips, upon the
expiration of their existing agreement on April 6, 1996.
Lifetime Hoan Corporation
Financial Data Schedule
Pursuant to Item 601(c) of Regulation S-K
This schedule contains summary financial information extracted
from the financial statements included in the form 10-Q
for the three months ended March 31, 1996.
Item Item Description Amount
Number
5-02(1) Cash and Cash Items $ 461,221
5-02(2) Marketable Securities $ 0
5- Notes and Accounts Receivable - $ 13,317,31
02(3)(a)( Trade 9
1)
5-02(4) Allowances for Doubtful $ 75,000
Accounts
5-02(6) Inventory $ 42,718,00
0
5-02(9) Total Current Assets $ 63,969,70
9
5-02(13) Property, Plant and Equipment $ 10,982,80
1
5-02(14) Accumulated Depreciation $ 3,058,668
5-02(18) Total Assets $ 77,172,88
0
5-02(21) Total Current Liabilities $ 13,569,36
7
5-02(22) Bonds, Mortgages and Similar $ 0
Debt
5-02(28) Preferred Stock - Mandatory $ 0
Redemption
5-02(29) Preferred Stock - No Mandatory $ 0
Redemption
5-02(30) Common Stock $ 112,584
5-02(31) Other Stockholders' Equity $ 63,490,92
9
5-02(32) Total Liabilities and $ 77,172,88
Stockholders' Equity 0
5- Net Sales of Tangible Products $ 19,273,39
03(b)1(a) 8
5-03(b)1 Total Revenues $ 19,273,39
8
5- Cost of Tangible Goods Sold $ 10,179,65
03(b)2(a) 0
5-03(b)2 Total Costs and Expenses
Applicable
to Sales and Revenues $ 10,179,65
0
5-03(b)3 Other Costs and Expenses $ 0
5-03(b)5 Provision for Doubtful Accounts $ 221,958
and Notes
5- Interest and Amortization of $ 30,842
03(b)(8) Debt Discount
5- Income Before Taxes and Other $ 2,743,903
03(b)(10) Items
5- Income Tax Expense $ 1,070,000
03(b)(11)
5- Income/Loss Continuing $ 1,673,903
03(b)(14) Operations
5- Discontinued Operations $ 0
03(b)(15)
5- Extraordinary Items $ 0
03(b)(17)
5- Cumulative effect - Changes in
03(b)(18) Accounting
Principles $ 0
5- Net Income or Loss $ 1,673,903
03(b)(19)
5- Earnings Per Share - Primary $ .15
03(b)(20)
5- Earnings Per Share - Fully $ .15
03(b)(20) Diluted
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.
Lifetime Hoan Corporation
/s/ Milton L. Cohen May 14, 1996
__________________________________
Milton L. Cohen
Chairman of the Board of Directors
and President
(Principal Executive Officer)
/s/ Fred Spivak May 14, 1996
__________________________________
Fred Spivak
Vice President - Finance and Treasurer
(Principal Financial and Accounting Officer)
Exhibit Index
10.1 Employment agreement dated April 7, 1996 with
Milton L. Cohen.
10.2 Employment agreement dated April 7, 1996 with
Jeffrey Siegel.
10.3 Employment agreement dated April 7, 1996 with
Craig Phillips.
10.23 Lifetime Hoan Corporation 1996 Incentive Stock
Option Plan.
10.24 Lifetime Hoan Corporation 1996 Incentive Bonus
Compensation Plan.
Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of April 7, 1996, between LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Corporation") with
principal offices located at One Merrick Avenue, Westbury, New
York 11590 and MILTON L. COHEN (the "Executive") residing at 133
Everit Avenue, Hewlett Bay Park, New York 11557
A.The Executive is now Chairman of the Board and President of the
Corporation.
B.The Corporation desires to arrange for the continued employment
of the Executive and the Executive is willing to be employed by
the Corporation on the terms and conditions set forth herein.
1.Employment. The Corporation agrees to employ the Executive as
President and as its Chief Executive Officer and the Executive
hereby accepts the employment.
2.Term. The term of employment of the Executive hereunder shall
commence April 7, 1996 and shall continue until April 6, 1999,
and thereafter shall continue for additional consecutive periods
of one year, unless sooner terminated in the manner provided for
herein and unless, with respect to the additional consecutive
periods, either the Corporation or the Executive notifies the
other, not later than December 31 of the prior year, that the
term is to end on April 6 of the following year.
3.Duties and Services. During the term of his employment
hereunder, the Executive agrees to serve the Corporation
faithfully, diligently and to the best of his ability, under the
direction of the Board of Directors of the Corporation, devoting
his full business time, energy and skill to the employment, and
to perform from time to time executive services as the Board of
Directors shall request, provided that the services of the
Executive hereunder shall be consistent with his position and
status as President and Chief Executive Officer of the
Corporation and the services heretofore rendered by the Executive
to the Corporation, and provided further that, subject to
Paragraph 9 hereof, the Executive may devote time to his personal
endeavors so long as the same do not interfere with the
performance of his duties hereunder. The Corporation agrees
that, unless the Executive otherwise consents, the headquarters
for the performance of the Executive's services shall be the
principal offices of the Corporation located in the greater New
York metropolitan area, subject to reasonable travel as the
performance of the Executive's duties may require.
4.Compensation. As full compensation for the services to be
rendered hereunder by the Executive, the Corporation agrees to
pay to the Executive, and the Executive agrees to accept:
a)A base salary for his services at the rate of Seven Hundred
Thousand ($700,000) per annum, payable in accordance with the
Corporation's payroll practices for executives; and
b) Bonus compensation as provided in the Corporation's 1996
Incentive Bonus Compensation Plan (in the event the Plan is
approved by the stockholders of the Corporation at their next
meeting). In the event the Plan is not so approved, the
Executive shall have the right to terminate this Agreement on 30
days notice to the Corporation, given within 120 days following
the conclusion of the next meeting of the stockholders of the
Corporation.
5.Other Benefits.
a)Nothing contained herein shall be deemed to limit or affect the
right of the Executive to receive, in the sole discretion of the
Board of Directors of the Corporation or any committee thereof,
other forms of additional compensation or to participate in any
retirement, disability, profit sharing, stock option, cash or
stock bonus or other plan or arrangements, or in any other
benefits now or hereafter provided by the Corporation for its
employees generally. Without limiting the foregoing, the
Corporation shall provide the Executive with the benefits set
forth below.
b)The Corporation shall provide the Executive with the type(s) of
automobile(s), and reimbursement of expenses incurred in
connection therewith, comparable to those heretofore provided to
the Executive as an officer of the Corporation during its fiscal
year ended December 31, 1995.
c)It is contemplated that, in connection with his employment
hereunder, the Executive may be required to incur reasonable
business, entertainment and travel expenses. The Corporation
agrees to reimburse the Executive in full for all reasonable and
necessary business, entertainment and other related expenses,
including travel expenses, incurred or expended by him incident
to the performance of the Executive's duties hereunder, upon
submission by the Executive to the Corporation of vouchers or
expense statements satisfactorily evidencing the expenses as may
reasonably be requested by the Corporation.
d)During the term of the Executive's employment hereunder he
shall be entitled to annual paid vacations (taken consecutively
or in segments) the length and time of which shall be in
accordance with current practices, provided that the aggregate
length of the Executive's annual vacation(s) shall in no event be
less than four weeks.
6.Insurance.
a)The Executive agrees that the Corporation may at any time or
times and for the Corporation's own benefit apply for and take
out life, health, accident and other insurance cover the
Executive either independently or together with others, in an
amount the Corporation deems to be in its best interests and the
Corporation may maintain any existing insurance policies on the
life of the Executive owned by the Corporation. The Corporation
shall own all rights in the insurance and in the cash value and
proceeds thereof and the Executive shall not have any right,
title or interest therein.
b)Notwithstanding the foregoing, the Corporation agrees to
procure and maintain throughout the term of the Executive's
employment hereunder, at the Corporation's sole expense,
disability insurance for the Executive, if obtainable, in an
amount sufficient to pay the Executive $10,000 per month during
the term of this Agreement in the event the Executive becomes
disabled and his employment is terminated pursuant to Paragraph 7
hereof.
c)The Executive agrees to assist the Corporation at the
Corporation's sole expense in obtaining the insurance referred to
in Subparagraphs (a) and (b) above, among other things, by
submitting to the customary examinations and correctly preparing,
signing and delivering applications and other documents as
reasonably may be required.
7.Death or Disability.
a)If during the term of this Agreement, the Executive shall
become physically or mentally disabled so that he is prevented
from performing his usual duties for an aggregate period of more
than twelve (12) months in any eighteen (18) month period, the
Corporation may terminate the Executive's employment hereunder.
Notwithstanding the foregoing, the Corporation shall continue to
pay the Executive compensation during the term of this Agreement
as follows:
(1)during the period prior to termination referred to in
Subparagraph (a) above and for a period of twelve (12) months
thereafter, the Executive shall be entitled to receive the full
amount of compensation and all applicable benefits provided in
Paragraphs 4 and 5 hereof or Subparagraphs 8(b) and (d) hereof,
as the case may be;
(2) from and after the twelve (12) month period describe
d in (i)
above and for the remainder of the term of this Agreement, the
Executive shall be entitled to receive one-half (1/2) the full
compensation received by the Executive immediately preceding the
onset of his disability, plus the amount of disability insurance
set forth in Subparagraph 6(b) hereof, plus any accrued and/or
vested employee benefits referred to in Paragraph 5.
b)In the event of the death of the Executive during the term of
this Agreement, the Executive's personal representative shall be
entitled to receive the compensation specified in Paragraph 4 or
Subparagraph 8(c) hereof, as the case may be, for a period of
three years following the Executive's death, even though that
period may extend beyond the term of this Agreement. The
Corporation thereafter shall be discharged and released of and
from any further obligations under this Agreement, except for its
obligation to pay any accrued and/or vested employee benefits
referred to in Paragraph 5 hereof.
8.Severance Allowance.
a)For the purposes of this Paragraph 8, the following terms shall
have the following respective meanings:
(1)Cause - The commission by the Executive of any act of
gross
negligence in the performance of his duties or obligations to the
Corporation, or the commission by the Executive of any act of
disloyalty, dishonesty or breach of trust against the
Corporation.
(2) Event of Involuntary Termination - Each of the follo
wing, if
not agreed to in writing by the Executive, shall be deemed an
Event of Involuntary Termination:
(a)The termination of the Executive's employment by the
Corporation other than (1) for Cause or (2) pursuant to
Paragraphs 2 or 7 hereof; or
(b)The appointment of a person other than the Execut
ive to serve
as President or Chief Executive Officer of the Corporation, or
the diminution of the Executive's duties, responsibilities or
powers to duties, responsibilities or powers less than those
previously exercised or held by the Executive;
(c)a reduction in the aggregate amount of compensati
on and other
benefits received by the Executive pursuant to Paragraphs 4 and 5
hereof (other than a reduction of benefits made for employees
generally); or
(d)a transfer of the Executive's principal place of
employment to
a location other than the New York metropolitan area.
(3) Initiating Event - The consolidation or merger of the
Corporation with or into another corporation or other
reorganization of the Corporation (other than with or into a
subsidiary or affiliate of the Corporation) any of which results
in a change in control of the Corporation; the sale of all or
substantially all the assets of the Corporation (other than to a
subsidiary or affiliate or the Corporation); or the acquisition,
directly or indirectly, by any Person, or by any two or more
Persons acting together, of beneficial ownership of more than
fifty percent (50%) of the outstanding voting securities of the
Corporation, including, without limitation, any acquisition by
means of a tender or exchange offer or proxy solicitation or
pursuant to a judgment, decree or final order of a judicial or
administrative body of competent jurisdiction.
(4)Person - An individual, partnership, joint venture,
corporation, trust, unincorporated association, other business
entity or government or department, agency or instrumentality
thereof (whether domestic or foreign).
b)Upon the occurrence of an Event of Involuntary Termination
following an Initiating Event, the Executive shall be entitled to
receive, and the Corporation agrees to pay, an amount (the
"Severance Allowance") equal to the salary the Executive would
have received pursuant to Subparagraphs 4(a) and (c) hereof
during the period commencing with the Event of Involuntary
Termination and terminating three years thereafter (the
"Severance Period"). The Severance Allowance shall be paid in
the manner in which the Executive's salary was paid by the
Corporation immediately prior to the occurrence of the first
Initiating Event.
c)In the event the Executive dies before receiving the full
amount of the Severance Allowance, his personal representative
shall be entitled to receive the Severance Allowance specified in
Subparagraph (b) for the balance of the Severance Period.
d)In addition to Severance Allowance, the Corporation or its
successors shall pay to the Executive an amount equal to that
which the Executive would have received under the Corporation's
pension plan had he continued to be an active, full-time employee
of the Corporation during the Severance Period and had he
received during that period a salary equal to, and paid in the
manner of, the Severance Allowance. The payments shall be made
at such times as the Executive would have received payments under
the pension plan had he continued to be an active, full-time
employee of the Corporation during the Severance Period.
9.Restrictive Covenants; Injunctive Relief. The Executive
acknowledges and agrees that (i) the principal business of the
Corporation is the importing and distribution of cutlery and
tableware; (ii) he is one of the limited number of persons who
has developed, and will continue to develop, that business; (iii)
the business of the Corporation is conducted throughout the
United States; (iv) his work for the Corporation has included the
identification and solicitation of present and prospective
suppliers and customers and the maintenance of supplier and
customer relationships and goodwill; (v) the suppliers and
customers of the Corporation are engaged in supplying and
purchasing various types of houseware products including cutlery
and tableware products; (vi) his work for the Corporation has
provided him, and will continue to provide him, with confidential
and proprietary information including customer and supplier lists
and marketing strategies; and (vii) the business of the
Corporation and the potential for its continued success are
substantially dependent on the unique personal skills of the
Executive and his diligent efforts in implementing those skills
on behalf of the Corporation and in this regard the services to
be provided by him are special, unique and extraordinary.
Accordingly, in order to induce the Corporation to enter into
this Agreement, the Executive covenants and agrees that:
a)During the term of this Agreement and for a period of five
years following the earlier of (i) the termination of the
Executive's employment with the Corporation for any reason other
than a termination by the Corporation without Cause or (ii) the
expiration of this Agreement (the "Restricted Period"), the
Executive shall not:
(1)(A)engage in the business of importing or distributing
any
cutlery or tableware products whatsoever or any other houseware
products related to or competitive with the products distributed
by the Corporation or in any other business engaged in by the
Corporation at the time of the expiration or termination or in
any other products or business discontinued by the Corporation
with the consent of the Executive within one year prior to the
expiration or termination (together, the "Prohibited Activity")
in the United States for his own account; (B) directly or
indirectly, enter the employ of, or render any services to, any
Person engaged in any Prohibited Activity in the United States;
(C) have an interest in any Person engaged in any Prohibited
Activity in the United States, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal,
agent, employee, trustee, consultant or in any other relationship
or capacity; provided, however, that the Executive may own
directly, or indirectly, solely as an investment, securities of
any Person which are traded on any national securities exchange
or in the over-the-counter market if the Executive (c) is not a
controlling person of, or a member of a group that controls, the
person or (y) does not directly or indirectly, own 5% or more of
any class of securities of the person;
(2)directly or indirectly hire, engage or retain any Pers
on who
at any time within two (2) years prior to the expiration or
termination was a supplier, client or customer of the Corporation
as, or directly or indirectly solicit, entice or induce any
Person to become, a supplier, client or customer of any other
Person engaged in any Prohibited Activity; or
(3) directly or indirectly hire, employ or retain any pe
rson who
at any time within two (2) years prior to the expiration or
termination was an employee of the Corporation or directly or
indirectly solicit, entice, induce or encourage any such person
to become employed by any other Person.
b)During the Restricted Period, and for a period of two (2) years
thereafter, the Executive shall keep secret and retain in
strictest confidence, and shall not use for the benefit of
himself or others except in connection with the business and
affairs of the Corporation, all confidential or proprietary
information of the Corporation and its subsidiaries, including,
without limitation, trade "know-how", secrets, consultant
contracts, supplier lists, customer lists, pricing policies, cost
information, operational methods, marketing plans or strategies,
product development techniques or plans, business acquisition
plans, new personnel plans, methods of manufacture, technical
processes, designs and design projects and other business affairs
of the Corporation and its subsidiaries learned by the Executive
heretofore or during the term of this Agreement, and shall not
disclose them to anyone outside the Corporation and its
subsidiaries, either during or after employment by the
Corporation, except as required in the course of performing
duties hereunder or with the Corporation's express written
consent; provided, however, that the Executive shall note be
bound by the restrictive obligations of this paragraph 9(b) with
respect to any matter that is or becomes publicly known through
no act of the Executive or that is permitted by Paragraph 9(a).
All memoranda, reports, notes, customer or supplier lists,
correspondence, records and other documents (and all copies
thereof) made or compiled by the Executive, or made available to
the Executive, concerning the business of the Corporation or any
of its subsidiaries shall be the Corporation's property and shall
be delivered to the Corporation promptly upon the expiration or
termination of the Executive's employment with the Corporation.
c)The Executive hereby acknowledges that the Restrictive
Covenants contained in Paragraphs 9(a) and (b) are reasonable and
valid in all respects and that the Corporation is entering into
this Agreement in reliance, inter alia, on the acknowledgment.
If the Executive breaches, or threatens to commit a breach of,
any of the Restrictive Covenants, the Corporation shall have the
following rights and remedies, each of which rights and remedies
shall be independent of the other and several enforceable, and
all of which rights and remedies shall be in addition to, and not
in lieu of, any other rights and remedies available to the
Corporation under law or in equity: (i) the right and remedy to
have the Restrictive Covenants specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that
any breach or threatened breach will cause irreparable injury to
the Corporation and that money damages will not provide an
adequate remedy to the Corporation; (ii) if any court determines
that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions; and (iii) if any
court construes any of the Restrictive Covenants, or any part
thereof, to be unenforceable because of the duration of the
provision or the area covered thereby, the court shall have the
power to reduce the duration or area of the provision and, in its
reduced form, the provision shall then be enforceable and shall
be enforced.
10.Deductions and Withholding. The Executive agrees that the
Corporation shall withhold from any and all payments required to
be made to the Executive pursuant to this Agreement all federal,
state, local and/or other taxes which the Corporation determines
are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect.
11.Assignability and Binding Effect. This Agreement shall inure
to the benefit of and shall be binding upon the heirs, executors,
administrators, successors and legal representatives of the
Executive, and shall inure to the benefit of and be binding upon
the Corporation and its successors, but the obligations of the
Executive hereunder may not be assigned to another Person, nor
may they be so delegated, and any such assignment shall be null
and void and without force or effect.
12.Complete Understanding. This Agreement constitutes the
complete understanding between the parties with respect to the
employment of the Executive hereunder, and no statement,
representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein.
This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the
parties hereto.
13.Severability. If any provision of this Agreement or any part
hereof is invalid, unlawful or incapable of being enforced, by
reason of any rule of law or public policy, all other conditions
and provisions of this Agreement that can be given effect without
the invalid, unlawful or unenforceable provision, nevertheless,
shall remain in full force and effect.
14.Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
governing agreements to be wholly performed within that state.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to become effective as provided in Paragraph 2 hereof.
LIFETIME HOAN CORPORATION
By:_______________________________________________ MILTON L.
COHEN
Exhibit 10.2
EMPLOYMENT AGREEMENT
AGREEMENT made as of April 7, 1996, between LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Corporation") with
principal offices located at One Merrick Avenue, Westbury, New
York 11590 and JEFFREY SIEGEL (the "Executive") residing at 40
Merrivale Road, Great Neck, NY 11020.
A.The Executive is now Executive Vice President of the
Corporation.
B.The Corporation desires to arrange for the continued employment
of the Executive and the Executive is willing to be employed by
the Corporation on the terms and conditions set forth herein.
1.Employment. The Corporation agrees to employ the Executive as
Executive Vice President Officer and the Executive hereby accepts
the employment.
2.Term. The term of employment of the Executive hereunder shall
commence April 7, 1996 and shall continue until April 6, 1999,
and thereafter shall continue for additional consecutive periods
of one year, unless sooner terminated in the manner provided for
herein and unless, with respect to the additional consecutive
periods, either the Corporation or the Executive notifies the
other, not later than December 31 of the prior year, that the
term is to end on April 6 of the following year.
3.Duties and Services. During the term of his employment
hereunder, the Executive agrees to serve the Corporation
faithfully, diligently and to the best of his ability, under the
direction of the Chief Executive Officer and the Board of
Directors of the Corporation, devoting his full business time,
energy and skill to the employment, and to perform from time to
time executive services as the Board of Directors shall request,
provided that the services of the Executive hereunder shall be
consistent with his position and status as President and Chief
Executive Officer of the Corporation and the services heretofore
rendered by the Executive to the Corporation, and provided
further that, subject to Paragraph 9 hereof, the Executive may
devote time to his personal endeavors so long as the same do not
interfere with the performance of his duties hereunder. The
Corporation agrees that, unless the Executive otherwise consents,
the headquarters for the performance of the Executive's services
shall be the principal offices of the Corporation located in the
greater New York metropolitan area, subject to reasonable travel
as the performance of the Executive's duties may require.
4.Compensation. As full compensation for the services to be
rendered hereunder by the Executive, the Corporation agrees to
pay to the Executive, and the Executive agrees to accept:
a)A base salary for his services at the rate of Four Hundred
Thousand ($400,000) per annum, payable in accordance with the
Corporation's payroll practices for executives; and
b) Bonus compensation as provided in the Corporation's 1996
Incentive Bonus Compensation Plan (in the event the Plan is
approved by the stockholders of the Corporation at their next
meeting). In the event the Plan is not so approved, the
Executive shall have the right to terminate this Agreement on 30
days notice to the Corporation, given within 120 days following
the conclusion of the next meeting of the stockholders of the
Corporation.
5.Other Benefits.
a)Nothing contained herein shall be deemed to limit or affect the
right of the Executive to receive, in the sole discretion of the
Board of Directors of the Corporation or any committee thereof,
other forms of additional compensation or to participate in any
retirement, disability, profit sharing, stock option, cash or
stock bonus or other plan or arrangements, or in any other
benefits now or hereafter provided by the Corporation for its
employees generally. Without limiting the foregoing, the
Corporation shall provide the Executive with the benefits set
forth below.
b)The Corporation shall provide the Executive with the type(s) of
automobile(s), and reimbursement of expenses incurred in
connection therewith, comparable to those heretofore provided to
the Executive as an officer of the Corporation during its fiscal
year ended December 31, 1995.
c)It is contemplated that, in connection with his employment
hereunder, the Executive may be required to incur reasonable
business, entertainment and travel expenses. The Corporation
agrees to reimburse the Executive in full for all reasonable and
necessary business, entertainment and other related expenses,
including travel expenses, incurred or expended by him incident
to the performance of the Executive's duties hereunder, upon
submission by the Executive to the Corporation of vouchers or
expense statements satisfactorily evidencing the expenses as may
reasonably be requested by the Corporation.
d)During the term of the Executive's employment hereunder he
shall be entitled to annual paid vacations (taken consecutively
or in segments) the length and time of which shall be in
accordance with current practices, provided that the aggregate
length of the Executive's annual vacation(s) shall in no event be
less than four weeks.
6.Insurance.
a)The Executive agrees that the Corporation may at any time or
times and for the Corporation's own benefit apply for and take
out life, health, accident and other insurance cover the
Executive either independently or together with others, in an
amount the Corporation deems to be in its best interests and the
Corporation may maintain any existing insurance policies on the
life of the Executive owned by the Corporation. The Corporation
shall own all rights in the insurance and in the cash value and
proceeds thereof and the Executive shall not have any right,
title or interest therein.
b)Notwithstanding the foregoing, the Corporation agrees to
procure and maintain throughout the term of the Executive's
employment hereunder, at the Corporation's sole expense,
disability insurance for the Executive, if obtainable, in an
amount sufficient to pay the Executive $10,000 per month during
the term of this Agreement in the event the Executive becomes
disabled and his employment is terminated pursuant to Paragraph 7
hereof.
c)The Executive agrees to assist the Corporation at the
Corporation's sole expense in obtaining the insurance referred to
in Subparagraphs (a) and (b) above, among other things, by
submitting to the customary examinations and correctly preparing,
signing and delivering applications and other documents as
reasonably may be required.
7.Death or Disability.
a)If during the term of this Agreement, the Executive shall
become physically or mentally disabled so that he is prevented
from performing his usual duties for an aggregate period of more
than twelve (12) months in any eighteen (18) month period, the
Corporation may terminate the Executive's employment hereunder.
Notwithstanding the foregoing, the Corporation shall continue to
pay the Executive compensation during the term of this Agreement
as follows:
(1)during the period prior to termination referred to in
Subparagraph (a) above and for a period of twelve (12) months
thereafter, the Executive shall be entitled to receive the full
amount of compensation and all applicable benefits provided in
Paragraphs 4 and 5 hereof or Subparagraphs 8(b) and (d) hereof,
as the case may be;
(2) from and after the twelve (12) month period describe
d in (i)
above and for the remainder of the term of this Agreement, the
Executive shall be entitled to receive one-half (1/2) the full
compensation received by the Executive immediately preceding the
onset of his disability, plus the amount of disability insurance
set forth in Subparagraph 6(b) hereof, plus any accrued and/or
vested employee benefits referred to in Paragraph 5.
b)In the event of the death of the Executive during the term of
this Agreement, the Executive's personal representative shall be
entitled to receive the compensation specified in Paragraph 4 or
Subparagraph 8(c) hereof, as the case may be, for a period of
three years following the Executive's death, even though that
period may extend beyond the term of this Agreement. The
Corporation thereafter shall be discharged and released of and
from any further obligations under this Agreement, except for its
obligation to pay any accrued and/or vested employee benefits
referred to in Paragraph 5 hereof.
8.Severance Allowance.
a)For the purposes of this Paragraph 8, the following terms shall
have the following respective meanings:
(1)Cause - The commission by the Executive of any act of
gross
negligence in the performance of his duties or obligations to the
Corporation, or the commission by the Executive of any act of
disloyalty, dishonesty or breach of trust against the
Corporation.
(2) Event of Involuntary Termination - Each of the follo
wing, if
not agreed to in writing by the Executive, shall be deemed an
Event of Involuntary Termination:
(a)The termination of the Executive's employment by the
Corporation other than (1) for Cause or (2) pursuant to
Paragraphs 2 or 7 hereof; or
(b)The appointment of a person other than the Execut
ive to serve
as President or Chief Executive Officer of the Corporation, or
the diminution of the Executive's duties, responsibilities or
powers to duties, responsibilities or powers less than those
previously exercised or held by the Executive;
(c)a reduction in the aggregate amount of compensati
on and other
benefits received by the Executive pursuant to Paragraphs 4 and 5
hereof (other than a reduction of benefits made for employees
generally); or
(d)a transfer of the Executive's principal place of
employment to
a location other than the New York metropolitan area.
(3) Initiating Event - The consolidation or merger of the
Corporation with or into another corporation or other
reorganization of the Corporation (other than with or into a
subsidiary or affiliate of the Corporation) any of which results
in a change in control of the Corporation; the sale of all or
substantially all the assets of the Corporation (other than to a
subsidiary or affiliate or the Corporation); or the acquisition,
directly or indirectly, by any Person, or by any two or more
Persons acting together, of beneficial ownership of more than
fifty percent (50%) of the outstanding voting securities of the
Corporation, including, without limitation, any acquisition by
means of a tender or exchange offer or proxy solicitation or
pursuant to a judgment, decree or final order of a judicial or
administrative body of competent jurisdiction.
(4)Person - An individual, partnership, joint venture,
corporation, trust, unincorporated association, other business
entity or government or department, agency or instrumentality
thereof (whether domestic or foreign).
b)Upon the occurrence of an Event of Involuntary Termination
following an Initiating Event, the Executive shall be entitled to
receive, and the Corporation agrees to pay, an amount (the
"Severance Allowance") equal to the salary the Executive would
have received pursuant to Subparagraphs 4(a) and (c) hereof
during the period commencing with the Event of Involuntary
Termination and terminating three years thereafter (the
"Severance Period"). The Severance Allowance shall be paid in
the manner in which the Executive's salary was paid by the
Corporation immediately prior to the occurrence of the first
Initiating Event.
c)In the event the Executive dies before receiving the full
amount of the Severance Allowance, his personal representative
shall be entitled to receive the Severance Allowance specified in
Subparagraph (b) for the balance of the Severance Period.
d)In addition to Severance Allowance, the Corporation or its
successors shall pay to the Executive an amount equal to that
which the Executive would have received under the Corporation's
pension plan had he continued to be an active, full-time employee
of the Corporation during the Severance Period and had he
received during that period a salary equal to, and paid in the
manner of, the Severance Allowance. The payments shall be made
at such times as the Executive would have received payments under
the pension plan had he continued to be an active, full-time
employee of the Corporation during the Severance Period.
9.Restrictive Covenants; Injunctive Relief. The Executive
acknowledges and agrees that (i) the principal business of the
Corporation is the importing and distribution of cutlery and
tableware; (ii) he is one of the limited number of persons who
has developed, and will continue to develop, that business; (iii)
the business of the Corporation is conducted throughout the
United States; (iv) his work for the Corporation has included the
identification and solicitation of present and prospective
suppliers and customers and the maintenance of supplier and
customer relationships and goodwill; (v) the suppliers and
customers of the Corporation are engaged in supplying and
purchasing various types of houseware products including cutlery
and tableware products; (vi) his work for the Corporation has
provided him, and will continue to provide him, with confidential
and proprietary information including customer and supplier lists
and marketing strategies; and (vii) the business of the
Corporation and the potential for its continued success are
substantially dependent on the unique personal skills of the
Executive and his diligent efforts in implementing those skills
on behalf of the Corporation and in this regard the services to
be provided by him are special, unique and extraordinary.
Accordingly, in order to induce the Corporation to enter into
this Agreement, the Executive covenants and agrees that:
a)During the term of this Agreement and for a period of five
years following the earlier of (i) the termination of the
Executive's employment with the Corporation for any reason other
than a termination by the Corporation without Cause or (ii) the
expiration of this Agreement (the "Restricted Period"), the
Executive shall not:
(1)(A)engage in the business of importing or distributing
any
cutlery or tableware products whatsoever or any other houseware
products related to or competitive with the products distributed
by the Corporation or in any other business engaged in by the
Corporation at the time of the expiration or termination or in
any other products or business discontinued by the Corporation
with the consent of the Executive within one year prior to the
expiration or termination (together, the "Prohibited Activity")
in the United States for his own account; (B) directly or
indirectly, enter the employ of, or render any services to, any
Person engaged in any Prohibited Activity in the United States;
(C) have an interest in any Person engaged in any Prohibited
Activity in the United States, directly or indirectly, as an
individual, partner, shareholder, officer, director, principal,
agent, employee, trustee, consultant or in any other relationship
or capacity; provided, however, that the Executive may own
directly, or indirectly, solely as an investment, securities of
any Person which are traded on any national securities exchange
or in the over-the-counter market if the Executive (c) is not a
controlling person of, or a member of a group that controls, the
person or (y) does not directly or indirectly, own 5% or more of
any class of securities of the person;
(2)directly or indirectly hire, engage or retain any Pers
on who
at any time within two (2) years prior to the expiration or
termination was a supplier, client or customer of the Corporation
as, or directly or indirectly solicit, entice or induce any
Person to become, a supplier, client or customer of any other
Person engaged in any Prohibited Activity; or
(3) directly or indirectly hire, employ or retain any pe
rson who
at any time within two (2) years prior to the expiration or
termination was an employee of the Corporation or directly or
indirectly solicit, entice, induce or encourage any such person
to become employed by any other Person.
b)During the Restricted Period, and for a period of two (2) years
thereafter, the Executive shall keep secret and retain in
strictest confidence, and shall not use for the benefit of
himself or others except in connection with the business and
affairs of the Corporation, all confidential or proprietary
information of the Corporation and its subsidiaries, including,
without limitation, trade "know-how", secrets, consultant
contracts, supplier lists, customer lists, pricing policies, cost
information, operational methods, marketing plans or strategies,
product development techniques or plans, business acquisition
plans, new personnel plans, methods of manufacture, technical
processes, designs and design projects and other business affairs
of the Corporation and its subsidiaries learned by the Executive
heretofore or during the term of this Agreement, and shall not
disclose them to anyone outside the Corporation and its
subsidiaries, either during or after employment by the
Corporation, except as required in the course of performing
duties hereunder or with the Corporation's express written
consent; provided, however, that the Executive shall note be
bound by the restrictive obligations of this paragraph 9(b) with
respect to any matter that is or becomes publicly known through
no act of the Executive or that is permitted by Paragraph 9(a).
All memoranda, reports, notes, customer or supplier lists,
correspondence, records and other documents (and all copies
thereof) made or compiled by the Executive, or made available to
the Executive, concerning the business of the Corporation or any
of its subsidiaries shall be the Corporation's property and shall
be delivered to the Corporation promptly upon the expiration or
termination of the Executive's employment with the Corporation.
c)The Executive hereby acknowledges that the Restrictive
Covenants contained in Paragraphs 9(a) and (b) are reasonable and
valid in all respects and that the Corporation is entering into
this Agreement in reliance, inter alia, on the acknowledgment.
If the Executive breaches, or threatens to commit a breach of,
any of the Restrictive Covenants, the Corporation shall have the
following rights and remedies, each of which rights and remedies
shall be independent of the other and several enforceable, and
all of which rights and remedies shall be in addition to, and not
in lieu of, any other rights and remedies available to the
Corporation under law or in equity: (i) the right and remedy to
have the Restrictive Covenants specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that
any breach or threatened breach will cause irreparable injury to
the Corporation and that money damages will not provide an
adequate remedy to the Corporation; (ii) if any court determines
that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions; and (iii) if any
court construes any of the Restrictive Covenants, or any part
thereof, to be unenforceable because of the duration of the
provision or the area covered thereby, the court shall have the
power to reduce the duration or area of the provision and, in its
reduced form, the provision shall then be enforceable and shall
be enforced.
10.Deductions and Withholding. The Executive agrees that the
Corporation shall withhold from any and all payments required to
be made to the Executive pursuant to this Agreement all federal,
state, local and/or other taxes which the Corporation determines
are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect.
11.Assignability and Binding Effect. This Agreement shall inure
to the benefit of and shall be binding upon the heirs, executors,
administrators, successors and legal representatives of the
Executive, and shall inure to the benefit of and be binding upon
the Corporation and its successors, but the obligations of the
Executive hereunder may not be assigned to another Person, nor
may they be so delegated, and any such assignment shall be null
and void and without force or effect.
12.Complete Understanding. This Agreement constitutes the
complete understanding between the parties with respect to the
employment of the Executive hereunder, and no statement,
representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein.
This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the
parties hereto.
13.Severability. If any provision of this Agreement or any part
hereof is invalid, unlawful or incapable of being enforced, by
reason of any rule of law or public policy, all other conditions
and provisions of this Agreement that can be given effect without
the invalid, unlawful or unenforceable provision, nevertheless,
shall remain in full force and effect.
14.Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York
governing agreements to be wholly performed within that state.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to become effective as provided in Paragraph 2 hereof.
LIFETIME HOAN CORPORATION
By:_______________________________________________ JEFFREY SIEGEL
Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT made the 7th day of April, 1996, between LIFETIME HOAN
CORPORATION, a Delaware corporation (the "Corporation"), with
principal offices located at One Merrick Avenue, Westbury, New
York 11590 and CRAIG PHILLIPS ("Executive"), residing at 50
Theresa Place, Staten Island, New York 10301
The Corporation desires to employ Executive and Executive is
willing to be employed by the Corporation on the terms and
conditions set forth herein.
1.Employment. The Corporation agrees to employ Executive as Vice
President, Manufacturing and Executive hereby accepts such
employment.
2.Term. The term of employment of Executive hereunder shall
commence on the date hereof and shall continue until April 6,
1997.
3.Duties and Services. During the term of his employment
hereunder, Executive agrees to serve the Corporation faithfully,
diligently and to the best of his ability, under the direction of
the Board of Directors of the Corporation, devoting his full
business time, energy and skill to such employment, and to
perform from time to time such executive services as the Board of
Directors shall request, provided that the services of Executive
hereunder shall be consistent with his position and status as
Vice President, Manufacturing of the Corporation and the services
heretofore rendered by Executive to the Corporation, and,
provided, further, that Executive may devote time to his personal
endeavors so long as the same do not interfere with the
performance of his duties hereunder. The Corporation agrees that
unless Executive otherwise consents, the headquarters for the
performance of Executive's services shall be the principal
offices of the Corporation located in the greater New York
metropolitan area, subject to such reasonable travel as the
performance of Executive's duties may require.
4.Compensation. As full compensation for the services to be
rendered hereunder by Executive, the Corporation agrees to pay to
Executive and Executive agrees to accept:
a)A base salary for his services at the rate of One Hundred Fifty
Thousand ($150,000.00) Dollars per annum, payable in accordance
with the Corporation's payroll practices for executives; and
b)Such additional compensation as may from time to time be
authorized by the Board of Directors of the Corporation.
5.Other Benefits.
a)Nothing contained herein shall be deemed to limit or affect the
right of Executive to receive other terms of additional
compensation or to participate in any retirement, disability,
profit sharing, stock option, cash or stock bonus or other plan
or arrangements, or in any other benefits now or hereafter
provided by the Corporation for its employees generally in the
sole discretion of the Board of Directors of the Corporation.
Without limiting the foregoing, the Corporation shall provide
Executive with the benefits set forth below.
b)The Corporation shall provide Executive with the type(s) of
automobile(s), and reimbursement of expenses incurred in
connection therewith, comparable to those heretofore provided to
Executive as an officer of the Corporation during its fiscal year
ended December 31, 1995.
c)It is contemplated that, in connection with his employment
hereunder, Executive may be required to incur reasonable
business, entertainment and travel expenses. The Corporation
agrees to reimburse Executive in full for all reasonable and
necessary business, entertainment and other related expenses,
including travel expenses, incurred or expended by him incident
to the performance of Executive's duties hereunder and comparable
in amount to those heretofore provided to Executive as an officer
of Lifetime, upon submission by Executive as an officer Lifetime,
upon submission by Executive to the Corporation of such vouchers
or expense statements satisfactorily evidencing such expenses as
may be reasonably requested by the Corporation.
d)It is understood and agreed by the parties hereto that during
the term of Executive's employment hereunder he shall be entitled
to annual paid vacations (taken consecutively or in segments) the
length and time of which shall be arranged by mutual consultation
and agreement between Executive and the Board of Directors of the
Corporation, provided that the aggregate length of any annual
vacation shall in no event be less than four weeks.
6.Insurance.
a)Executive agrees that the Corporation may at any time or times
and for the Corporation's own benefit apply for and take our
life, health, accident and other insurance covering Executive
either independently-or-together with others in any amount which
the Corporation may deem to be in its best interests and the
Corporation may maintain any existing insurance policies on the
life of Executive owned by the Corporation. The Corporation
shall own all rights in such insurance and in the cash value and
proceeds thereof and Executive shall not have any right, title or
interest therein.
b)Notwithstanding the foregoing, the Corporation agrees to
procure and maintain throughout the term of Executive's
employment hereunder, at the Corporation's sole expense,
disability insurance for Executive, if obtainable, in an amount
which will be sufficient to pay Executive $9,000 per month during
the term of this Agreement in the event Executive becomes
disabled and his employment is terminated pursuant in Paragraph 7
hereof.
c)Executive agrees to assist the Corporation in the Corporation's
sole expense in obtaining the insurance referred to in
Subparagraphs (a) and (b) above by, among other things,
submitting to the customary examinations and directly preparing,
signing and delivering such applications and other documents as
reasonable may be required.
7.Death or Disability.
a)If during the term of this Agreement, Executive shall become
physically or mentally disabled so that he is prevented from
performing his usual duties for an aggregate period of more than
twelve (12) months in any eighteen (18) month period, the
Corporation may terminate Executive's employment hereunder.
Notwithstanding the foregoing, the Corporation shall,
nevertheless, continue to pay Executive compensation during the
term of this Agreement as follows:
(1)during the period prior to termination referred to in
Subparagraph (a) above and for a period of twelve (12) months
thereafter, Executive shall be entitled to receive the full
amount of compensation and all applicable benefits provided in
Paragraphs 4 and 5 hereof;
(2)from and after the twelve (12) month period described in (i)
above and for the remainder of the term of this Agreement,
Executive shall be entitled to receive one-half (1/2) of the
amount of full compensation received by Executive immediately
preceding the onset of his disability, plus the amount of
disability insurance set forth in Subparagraphs 6(b) hereof, plus
any accrued and/or vested employee benefits referred to in
Paragraph 5.
b)In the event of the death of Executive during the term of this
Agreement, Executive's personal representative shall be entitled
to receive the compensation specified in Paragraph 4 prorated
through the end of the month in which death occurs. The
Corporation thereafter shall be discharged and released of and
from any further obligations under this Agreement, except for its
obligation to pay any accrued and/or vested employee benefits
referred to in Paragraph 5 hereof.
8.Deductions and Withholding. Executive agrees that the
Corporation shall withhold from any and all payments required to
be made to Executive pursuant to this Agreement all federal,
state, local and/or other taxes which the Corporation determines
are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect.
9.Assignability and Binding Effect. This Agreement shall inure
to the benefit of and shall be binding upon the heirs, executors,
administrators, successors and legal representatives of
Executives, and shall inure to the benefit of and be binding upon
the Corporation and its successors, but the obligations of
Executive hereunder may not be assignable to another Person, nor
may they be so delegated, and any such assignment shall be null
and void and without force or effect.
10.Complete Understanding. This Agreement constitutes the
complete understanding between the parties with respect to the
employment of Executive hereunder, and no statement,
representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein.
This Agreement shall not be altered, modified, amended or
terminated except by written instrument signed by each of the
parties hereto.
11.Severability. If any provision of this Agreement or any part
hereof is invalid, unlawful or incapable of being enforced, by
reason of any rule of law or public policy, all other conditions
and provisions of this Agreement which can be given effect
without such invalid, unlawful or unenforceable provision shall,
nevertheless, remain in full force and effect.
12.Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to become effective as provided in Paragraph 2 hereof.
LIFETIME HOAN CORPORATION
By:______________________________________________________
CRAIG PHILLIPS
Exhibit 10.23
LIFETIME HOAN CORPORATION
1996 Incentive Stock Option Plan
1. PURPOSE
This 1996 Incentive Stock Option Plan (the "Plan") is intended as
an incentive to the officers of Lifetime Hoan Corporation, a
Delaware corporation (the "Corporation"), so that they may
increase their proprietary interest in the success of the
Corporation, and to encourage them to remain in the employ of the
Corporation. It is further intended that options issued pursuant
to the Plan shall constitute "incentive stock options" within the
meaning of section 422 of the Internal Revenue Code of 1986, as
from time to time amended (the "Code").
2. ADMINISTRATION
The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Corporation (the
"Board of Directors"). The Committee shall consist of not less
than two members of the Board of Directors, each of whom shall be
a "disinterested person" within the meaning of paragraph
(c)(2)(i) of Rule 16b-3 under the Securities Exchange Act of 1934
(as the same may be amended, the "Exchange Act"), as from time to
time in effect and each of whom shall also be an "outside
director" within the meaning of Reg. 1.162-27(e)(3) under the
Code, as from time to time in effect. The Board of Directors may
from time to time, either with or without cause, remove members
from, or add members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the Board of
Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it
may determine. A majority of the whole Committee shall
constitute a quorum, and the act of a majority of the members of
the Committee present at a meeting at which a quorum is present,
or acts approved in writing by a majority of the members of the
whole Committee, shall be the valid acts of the Committee. No
member of the Committee shall be eligible to receive options
under the Plan. The Committee shall have plenary authority in
its discretion, subject to the express provisions of the Plan, to
determine the officers who shall be granted options and the
amount of stock to be optioned to each.
The interpretation and construction by the Committee of any
provisions of the Plan or of any option granted under it shall be
final and conclusive. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any option granted under
it.
The Plan shall be administered and interpreted in such a manner
that all options granted under the Plan shall meet all the
requirements of section 422 of the Code. Any provision of the
Plan not consistent with section 422 of the Code shall not be
given effect to, and the remainder of the Plan shall be construed
as if such inconsistent provision were omitted.
3. ELIGIBILITY
The persons who shall be eligible to receive options under the
Plan shall be such officers, whether or not they are directors of
the Corporation, or any subsidiary corporation (as such term is
defined in section 424 of the Code) of the Corporation (a
"Subsidiary") existing from time to time, as the Committee shall
select from time to time. An optionee may hold more than one
option, but only on the terms and subject to the restrictions set
forth in this Plan.
4. STOCK SUBJECT TO OPTIONS
The stock subject to the options shall be shares of the
Corporation's authorized but unissued or reacquired $.01 par
value Common Stock (the "Common Stock"). Not more than 250,000
shares of the Common Stock may be issued pursuant to options
granted under the Plan. The number of shares of Common Stock
with respect to which option rights may be granted to any
individual under any and all options issued under the Plan shall
not exceed the limitation provided for in section 422(d) of the
Code nor shall that number in any event exceed 175,000 shares of
Common Stock under the Plan. The limitations established by each
of the preceding sentences shall be subject to adjustment as
provided in Section 5(H) of the Plan.
In the event that any outstanding option under the Plan for any
reason expires or is terminated, the shares of Common Stock
allocable to the unexercised portion of such option may again be
subjected to an option under the Plan.
There shall be reserved at all times for sale under the Plan a
number of shares of Common Stock (either authorized but unissued,
or issued and reacquired and held in the Corporation's treasury,
or both) equal to the maximum number of shares that may be
purchased pursuant to unexercised options granted or that may
thereafter be granted under the Plan.
5. TERMS AND CONDITIONS OF OPTIONS
Options granted pursuant to the Plan shall be evidenced by
agreements in such form as the Committee shall from time to time
approve, which agreements shall comply with and be subject to the
following terms and conditions:
Optionee's Agreement
Each officer receiving an option pursuant to the Plan
("Optionee"), who is not a party to an employment agreement with
the Company or one of its Subsidiaries, which agreement, at the
time of the option grant does not have an unexpired term of at
least one year remaining thereunder, shall agree to remain in the
employ of and to render to the Corporation or Subsidiaries his
services for a period of one year from the date of the option,
but such agreement shall not impose upon the Corporation or
Subsidiaries any obligation to retain the Optionee in their
employ for any period.
Number of Shares
Each option shall state the number of shares of Common Stock to
which it pertains.
Option Price
Each option shall state the option price, which shall be not less
than the fair market value of the Common Stock on the date of the
granting of the option, except that in the case of the grant of
an option to an officer who owns stock (directly or by
attribution by virtue of section 424(d) of the Code) possessing
more than 10 percent of the total combined voting power of all
classes of stock of the Corporation or of its parent or of any of
its Subsidiaries at the time of the granting of such option (each
such officer being herein referred to as a "Ten Percent
Stockholder"), the option price shall be at least 110 percent of
the fair market value of the Common Stock subject to the option
on the date of the granting of such option. During such time as
the Common Stock is not listed upon an established stock exchange
or the National Market System of NASDAQ (an "Exchange"), the fair
market value per share shall be the mean between dealer "bid" and
"ask" prices of the Common Stock in the New York over-the-counter
market on the day the option is granted, as reported by the
National Association of Securities Dealers, Inc. If the Common
Stock is listed upon an Exchange or Exchanges, such fair market
value shall be deemed to be the highest closing price of the
Common Stock on such Exchange or Exchanges on the day the option
is granted or if no sale of the Common Stock shall have been made
on any Exchange on that day, on the next preceding day on which
there was a sale of the Common Stock on such Exchange or
Exchanges.
Medium and Time of Payment
The option price shall be payable, upon the exercise of the
option, in United States dollars or in stock of the Corporation.
Term and Exercise of Options
Options granted under the Plan may become exercisable in whole or
in part immediately or after the lapse of a fixed period of time,
all as the Committee may provide upon the granting thereof,
except that no option granted to a member of the Board of
Directors who is eligible to receive options as provided in
Section 3 of the Plan shall become exercisable in whole or in
part prior to the first anniversary of the date of the granting
of the option. No option shall be exercisable after the
expiration of 10 years (5 years in the case of an option granted
to a Ten Percent Stockholder) from the date it is granted. Not
less than 100 shares may be purchased at any one time unless the
number purchased is the total number at the time purchasable
under the option. During the lifetime of the Optionee, the
option shall be exercisable only by him and shall not be
assignable or transferable by him and no other person shall
acquire any rights therein. To the extent not exercised, options
granted shall accumulate and be exercisable in whole or in part
in any subsequent period but not later than 10 years (5 years in
the case of an option granted to a Ten Percent Stockholder) from
the date the option is granted.
Termination of Employment Except by Death
In the event that an Optionee shall cease to be employed by the
Corporation or any of its Subsidiaries for any reason other than
death and shall be no longer in the employ of any of them,
subject to the condition that no option shall be exercisable
after the expiration of 10 years (5 years in the case of an
option granted to a Ten Percent Stockholder) from the date it is
granted, the Optionee shall have the right to exercise the option
at any time within 3 months after the termination of employment
(or within 1 year of disability in the case of an officer who is
permanently and totally disabled within the meaning of section
22(e)(3) of the Code) to the extent the right to exercise the
option had accrued pursuant to Section 5(E) of the Plan and had
not previously been exercised at the date of such termination.
Whether authorized leave of absence or absence for military or
governmental service shall constitute termination of employment,
for the purposes of the Plan, shall be determined by the
Committee, which determination shall be final and conclusive.
Death of Optionee and Transfer of Option
If the Optionee shall die while in the employ of the Corporation
or a Subsidiary or within a period of 3 months after the
termination of employment with the Corporation and all
Subsidiaries and shall not have fully exercised an option, the
option may be exercised, subject to the condition that no option
shall be exercisable after the expiration of 10 years (5 years in
the case of an option granted to a Ten Percent Stockholder) from
the date it is granted, to the extent that the Optionee's right
to exercise the option had accrued pursuant to Section 5(E) of
the Plan at the time of his death and had not previously been
exercised, at any time within one year after the Optionee's
death, by the executors or administrators of the Optionee or by
any person or persons who shall have acquired the option directly
from the Optionee by bequest or inheritance.
No option shall be transferable by the Optionee other than by
will or the laws of descent and distribution or be exercisable
during the lifetime of the Optionee by anyone other than the
Optionee.
Recapitalization
Subject to any required action by the stockholders of the
Corporation, the number of shares of Common Stock covered by each
outstanding option, and the price per share thereof in each
option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting
from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Common Stock) or any other
increase or decrease in the number of such shares effected
without receipt of consideration by the Corporation.
Subject to any required action by the stockholders of the
Corporation, if the Corporation shall be the surviving
corporation in any merger or consolidation, each outstanding
option shall pertain and apply to the securities to which a
holder of the number of shares of Common Stock subject to the
option would have been entitled. A dissolution or liquidation of
the Corporation or a merger or consolidation in which the
Corporation is not the surviving corporation shall cause each
outstanding option to terminate, provided that each Optionee, in
such event, if a period of one year from the date of grant of the
option shall have expired, shall have the right immediately prior
to the dissolution or liquidation, or merger or consolidation in
which the Corporation is not the surviving corporation, to
exercise his option in whole or in part without regard to any
restrictions on the time of exercise imposed pursuant to Section
5(E) of the Plan.
In the event of a change in the Common Stock as presently
constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares
with a different par value or without par value, the shares
resulting from any such change shall be deemed to be the Common
Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by
the Committee, whose determination in that respect shall be final
and conclusive unless overruled by the Board of Directors,
provided that each option granted pursuant to the Plan shall not
be adjusted in a manner that causes the option to fail to
continue to qualify as an "incentive stock option" within the
meaning of section 422 of the Code.
Except as hereinbefore expressly provided in this Section 5(H),
the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of
any stock dividend or any other increase or decrease in the
number of shares of stock of any class or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of
assets or stock of another corporation, and any issue by the
Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect
to, the number or price of shares of Common Stock subject to the
option.
The grant of an option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
Rights as a Stockholder
An Optionee or a transferee of an option shall have no rights as
a stockholder with respect to any shares covered by his option
until the date of the issuance of a stock certificate to him for
such shares. No adjustment shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property)
or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as
provided in Section 5(H) of the Plan.
Modification, Extension and Renewal of Options
Subject to the terms and conditions and within the limitations of
the Plan, the Committee may modify, extend or renew outstanding
options granted under the Plan, or accept the surrender of
outstanding options (to the extent not theretofore exercised) and
authorize the granting of new options in substitution therefor
(to the extent not theretofore exercised). The Committee shall
not, however, modify any outstanding options so as to specify a
lower price or accept the surrender of outstanding options and
authorize the granting of new options in substitution therefor
specifying a lower price. Notwithstanding the foregoing,
however, no modification of an option shall, without the consent
of the Optionee, alter or impair any rights or obligations under
any option theretofore granted under the Plan.
Investment Purpose
Each option under the Plan shall be granted on the condition that
the purchases of stock thereunder shall be for investment
purposes, and not with a view to resale or distribution except
that in the event the stock subject to the option is registered
under the Securities Act of 1933, as from time to time amended
(the "Securities Act"), or in the event a resale of the stock
without registration would otherwise be permissible, this
condition shall be inoperative if in the opinion of counsel for
the Corporation such condition is not required under the
Securities Act or any other applicable law, regulation, or rule
of any governmental agency.
Other Provisions
The option agreements authorized under the Plan shall contain
such other provisions, including, without limitation,
restrictions upon the exercise of the option, as the Committee
shall deem advisable. The option agreements shall contain such
limitations and restrictions upon the exercise of the option as
shall be necessary in order that such option will be an
"incentive stock option" as defined in section 422 of the Code or
to conform to any change in the law. The Committee will promptly
notify each Optionee of the grant of an option pursuant to the
Plan and deliver a written option agreement duly executed on
behalf of the Corporation to the Optionee. In the event that an
Optionee does not sign and return the written option agreement to
the Corporation within 30 days after receipt, the option referred
to in the option agreement will terminate.
6. TERM OF PLAN
Options may be granted pursuant to the Plan from time to time
within a period of 10 years from April 24, 1996, the date the
Plan was adopted by the Board.
7. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may
have as directors of the Corporation or as members of the
Committee, the members of the Committee shall be indemnified by
the Corporation against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them
may be a party by reason of any action taken or failure to act
under or in connection with the Plan or any option granted
thereunder, and against all amounts paid by them in settlement
thereof (provided the settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that the Committee member is
liable for negligence or misconduct in the performance of duties
as a member of the Committee; provided that, within 60 days after
institution of any action, suit or proceeding a Committee member
shall in writing offer the Corporation the opportunity, at its
own expense, to handle and defend the same.
8. AMENDMENT OF THE PLAN
The Board of Directors may, insofar as permitted by law, from
time to time, with respect to any shares at the time not subject
to options, suspend or discontinue the Plan or revise or amend it
in any respect whatsoever except that, without approval of the
stockholders of the Corporation, no such revision or amendment
shall increase the number of shares subject to the Plan, change
the designation of the class eligible to receive options,
decrease the price at which options may be granted or remove the
administration of the Plan from the Committee. Furthermore, the
Plan may not, without the approval of the stockholders of the
Corporation, be amended in any manner that will cause options
issued under it to fail to meet the requirements of "incentive
stock options" as defined in section 422 of the Code.
The Corporation intends that the Plan shall comply with the
requirements of Rule 16b-3 under the Exchange Act, as from time
to time amended, and with the requirements of any rule hereafter
adopted by the Securities and Exchange Commission in lieu thereof
(the "Rule"). Should any provision of the Plan not be necessary
to comply with the requirements of the Rule or should any
additional provisions be necessary to comply with the
requirements of the Rule, the Board of Directors or the Committee
may amend the Plan to add to or modify the provisions of the Plan
accordingly.
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of Common
Stock pursuant to options will be used for general corporate
purposes.
10.NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the
Optionee to exercise the option.
11. APPROVAL OF STOCKHOLDERS
The Plan shall become effective upon its approval by the Board of
Directors of the Corporation; but it shall be rescinded, and no
options granted under the Plan shall be valid unless the Plan is
approved by the holders of a majority of the outstanding shares
of Common Stock entitled to vote thereon at the meeting of the
Stockholders of the Corporation next held following the Plan's
approval by the Board of Directors of the Corporation.
Exhibit 10.24
LIFETIME HOAN CORPORATION
1996 Incentive Bonus Compensation Plan
PURPOSE
This 1996 Incentive Bonus Compensation Plan (the "Plan") is
intended as an incentive to the President and Executive Vice
President of Lifetime Hoan Corporation, a Delaware corporation
(the "Corporation"), to remain in the employ of the Corporation
and to reward those officers, who, through their industry and
ability, contribute materially to the continued success and
profitability of the Corporation.
ADMINISTRATION
The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Corporation (the
"Board of Directors"). The Committee shall consist of not less
than two members of the Board of Directors, each of whom shall be
an "outside director" within the meaning of Reg. 1.162-27(e)(3),
as from time to time in effect, under the Internal Revenue Code
of 1986, as from time to time amended (the "Code"). The Board of
Directors may from time to time, either with or without cause,
remove members from, or add members to, the Committee. Vacancies
on the Committee, howsoever caused, shall be filled by the Board
of Directors. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as it
may determine. A majority of the whole Committee shall
constitute a quorum, and the act of a majority of the members of
the Committee present at a meeting at which a quorum is present,
or acts approved in writing by a majority of the members of the
whole Committee, shall be the valid acts of the Committee. No
member of the Committee shall be eligible to receive awards under
the Plan. The Committee shall have plenary authority in its
discretion, subject to the express provisions of the Plan, to
determine the officers who shall be granted awards under the Plan
and the term and amount of the award to be allocated to each.
The interpretation and construction by the Committee of any
provisions of the Plan or of any award granted under it shall be
final and conclusive. No member of the Board of Directors or the
Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any award or claim
therefor under the Plan.
ELIGIBILITY FOR AWARDS
The President and the Executive Vice President of the Corporation
(a "Participant" during the period in which he is eligible to
receive incentive bonus compensation in respect of an award made
to him, and, after the actual amount payable in respect of an
award has become fixed, until payment has been made thereof)
shall receive awards of incentive bonus compensation under the
Plan, whether or not they are directors of the Corporation, or
any subsidiary corporation (as such term is defined in Section
425 of the Code) of the Corporation (a "Subsidiary") existing
from time to time.
INCENTIVE BONUS COMPENSATION
For each fiscal year of the Corporation during the term of the
Plan (commencing with the fiscal year ending December 31, 1996)
each participant shall receive incentive bonus compensation in an
amount equal to 3.5% of the net income of the Corporation for
such year before any charges for taxes and before any provision
for (i) compensation payable to either of the Participants,
including incentive bonus compensation payable hereunder for such
year, or (ii) stock options exercised during such year under the
Corporation's 1995 Incentive Stock Option Plan or the
Corporation's 1996 Incentive Stock Option Plan, or (iii)
extraordinary items, all as determined and calculated by the
Corporation's auditors using the same principles, methods and
conventions which shall then be used in the preparation of the
Corporation's audited financial statements.
The Committee, following the close of a fiscal year, shall
request the auditors for the Corporation to prepare for the
Committee a report of the incentive bonus compensation, if any,
for such fiscal year payable under the Plan to each Participant
and upon receiving and reviewing such report the Committee shall
certify in writing in accordance with Reg. 1.162-27(e)(5) of the
Code, the amounts so payable under the Plan in respect of such
fiscal year.
During the course of a fiscal year, the Committee may authorize
the advance to the Participant of an amount equal to 80% of the
incentive bonus compensation that was payable to the Participant
with respect to the immediately prior fiscal year (and, with
respect to 1996, 80% of the incentive bonus compensation that
would have been payable to the Participant had the Plan been in
effect during 1995). In the event the Participant's incentive
bonus compensation, as finally determined hereunder with respect
to the fiscal year, is less than the amount(s) advanced to the
Participant, the excess shall be promptly refunded to the
Corporation by the Participant or shall be credited to the
incentive bonus compensation due the Participant for the
following fiscal year of the Corporation, as determined by the
Committee.
Payment of any remaining incentive bonus compensation due a
Participant shall be made as soon as practicable after the
Committee shall have certified the same in accordance herewith.
All payments (including advances) shall be subject to any
applicable withholding.
If a Participant terminates employment or if his employment is
terminated by the Corporation for any reason during a fiscal year
(other than by reasons of a termination for cause) he shall
receive an appropriately pro rated amount of his award for such
fiscal year but shall not be eligible to receive any amount in
respect of an award for any subsequent year. No amount shall be
payable to a Participant in respect of an award in the event of a
termination for cause during the year for which the award is
made. In the event of the death of a Participant, any amount due
shall be paid to his estate.
TERM OF PLAN
Awards shall be granted pursuant to the Plan with respect to the
ten fiscal years commencing with the fiscal year beginning
January 1, 1996. Fiscal years consisting of less than 12 months
shall be considered for all purposes of the Plan as full fiscal
years.
CERTAIN GENERAL PROVISIONS
Nothing contained in the Plan shall give any Participant the
right to be retained in the employment of the Corporation or
affect the right of the Corporation to dismiss him. The adoption
of the Plan shall not constitute a contract between the
Corporation and any Participant.
Except insofar as may otherwise be required by law, no amount
payable at any time under the Plan shall be subject in any manner
to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge, or encumbrance of any
kind nor in any manner be subject to the debts or liabilities of
any person, and any attempt to so alienate or transfer or
encumber any such amount, whether presently or thereafter
payable, shall be void.
No Participant shall have any right, title, or interest
whatsoever in or to any investments which the Corporation may
make to aid it in meeting its obligations hereunder. Nothing
contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any
kind, or a fiduciary relationship between the Corporation and the
Participant or any other person. To the extent that a
Participant acquires a right to receive payments from the
Corporation under this Plan, such right shall be no greater than
the right of an unsecured general creditor of the Corporation.
All payments to be made hereunder shall be paid from the general
funds of the Corporation and no special or separate fund need be
established and no segregation of assets need be made to assure
payments of such amounts.
The Plan is intended to be an unfunded compensation plan for a
select group of management or highly compensated personnel of the
Corporation and all rights thereunder shall be governed by and
construed in accordance with the laws of New York applicable to
agreements wholly to be performed therein.
INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may
have as directors of the Corporation or as members of the
Committee, the members of the Committee shall be indemnified by
the Corporation against the reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection
with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them
may be a party by reason of any action taken or failure to act
under or in connection with the Plan or any award granted
thereunder, and against all amounts paid by them in settlement
thereof (provided the settlement is approved by independent legal
counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that the Committee member is
liable for negligence or misconduct in the performance of duties
as a member of the Committee; provided that, within 60 days after
institution of any action, suit or proceeding a Committee member
shall in writing offer the Corporation the opportunity, at its
own expense, to handle and defend the same.
AMENDMENT OF THE PLAN
The Board of Directors may, insofar as permitted by law, from
time to time, suspend or discontinue the Plan or revise or amend
it in any respect whatsoever except that, without approval of the
stockholders of the Corporation, no such revision or amendment
shall increase the amounts payable under incentive bonus
compensation formula of the Plan or otherwise materially alter
the formula for calculating the incentive bonus compensation
which may be paid hereunder or extend the term of the Plan.
APPROVAL OF STOCKHOLDERS
The Plan shall become effective upon its approval by the Board of
Directors of the Corporation; but it shall be rescinded, and no
awards granted under the Plan shall be valid unless the Plan is
approved by the holders of a majority of the outstanding shares
of Common Stock entitled to vote thereon at the meeting of the
Stockholders of the Corporation next held following the Plan's
approval by the Board of Directors of the Corporation.
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