Exhibit 10.1
LONG TERM BONUS AGREEMENT
THIS LONG TERM BONUS AGREEMENT (the "Agreement") is made and entered
into as of September 1, 2005, (the "Grant Date") by and between SL INDUSTRIES,
INC., a New Jersey corporation (the "Company"), with principal offices located
at 520 Fellowship Road, Suite A-114, Mount Laurel, New Jersey 08054, and JAMES
C. TAYLOR (the "Executive"), an individual with a residence at 21 Mill Neck
Lane, Pittsford, NY 14534.
W I T N E S S E T H:
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WHEREAS, the Executive is the President and Chief Executive Officer
of the Company; and
WHEREAS, the Company wishes to retain and encourage the productive
efforts of the Executive, which contributes toward the Company's success.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth and for other good and valuable consideration, the
parties hereto agree as follows:
Section 1. BONUS. The Executive shall be paid a Bonus in the amount
specified herein. The Bonus shall be paid upon the earlier of (a) the occurrence
of a Change of Control; or (b) the delivery of a notice, in accordance with the
terms herein (the "Notice"). The Bonus described herein is separate and distinct
from any other bonus program the Executive may participate in or be entitled to.
Section 2. PAYMENT OF BONUS. The Company shall pay the Executive the
Bonus within ten (10) business days following the occurrence of a Change of
Control, or the receipt of the Notice, as the case may be. The total amount of
the Bonus owed to the Executive on any given date shall be equal to the vested
portion of the Bonus on such date, as determined pursuant to Section 4(b). The
Executive shall be entitled to receive all or parts of the vested Bonus in such
increments as he shall direct upon delivery of the Notice thereof.
Section 3. TERMINATION. Upon the termination of the Executive's
employment with the Company for any reason, the Executive shall be entitled to
receive the Bonus upon deliverance of the Notice for a period of thirty (30)
days following the date of termination. Immediately after such thirty (30) day
period, Executive shall have no right to submit the Notice or to receive the
Bonus.
Section 4. DEFINITIONS. All capitalized terms used herein shall have
the meanings set forth below.
(a) "Base Price" shall mean $15.02.
(b) "Bonus" shall mean all compensation paid to the Executive
pursuant to the terms of this Agreement. The amount of the Bonus
shall be equal to the product of 50,000 multiplied by the amount
the Stock Price exceeds the base price. The Bonus shall vest pro
rata over a period of four (4) years, as follows: 20% on the
date hereof and 20% on each anniversary of the date hereof until
fully vested. Notwithstanding the foregoing, the full amount of
the Bonus shall fully vest and be payable upon the occurrence of
a Change in Control, as provided in Section 2.
(c) "Change in Control" shall be deemed to have occurred if:
(i) a tender offer (or series of related offers) shall
be made and consummated for the ownership of 50% or more of the
outstanding voting securities of the Company, unless as a result
of such tender offer more than 50% of the outstanding voting
securities of the surviving or resulting corporation shall be
owned in the aggregate by the shareholders of the Company (as of
the time immediately prior to the commencement of such offer),
any employee benefit plan of the Company or its subsidiaries,
and their affiliates;
(ii) the Company shall be merged or consolidated with
another corporation, unless as a result of such merger or
consolidation more than 50% of the outstanding voting securities
of the surviving or resulting corporation shall be owned in the
aggregate by the shareholders of the Company (as of the time
immediately prior to such transaction), any employee benefit
plan of the Company or its subsidiaries, and their affiliates;
(iii) the Company shall sell substantially all of its
assets to another corporation that is not wholly owned by the
Company, unless as a result of such sale more than 50% of such
assets shall be owned in the aggregate by the shareholders of
the Company (as of the time immediately prior to such
transaction), any employee benefit plan of the Company or its
subsidiaries and their affiliates; or
(iv) a Person (as defined below) shall acquire 50% or
more of the outstanding voting securities of the Company
(whether directly, indirectly, beneficially or of record),
unless as a result of such acquisition more than 50% of the
outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the shareholders
of the Company (as of the time immediately prior to the first
acquisition of such securities by such Person), any employee
benefit plan of the Company or its subsidiaries, and their
affiliates.
For purposes of this definition, ownership of voting
securities shall take into account and shall include ownership
as determined by applying the provisions of Rule 13d-3(d)(I)(i)
(as in effect on the date hereof) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). In addition, for
such purposes, "Person" shall have the meaning given in Section
3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; however, a Person shall not include (A)
the Company or any of its subsidiaries; (B) a trustee or other
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fiduciary holding securities under an employee benefit plan of
the Company or any of its subsidiaries; (C) an underwriter
temporarily holding securities pursuant to an offering of such
securities; or (D) a corporation owned, directly or indirectly,
by the shareholders of the Company in substantially the same
proportion as their ownership of stock of the Company.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred as a result of any acquisition of
securities of the Company by any Person arising out of, relating
to or as a result of a rights or similar offering by the Company
to its stockholders.
(d) "Common Stock" shall mean the Company's common stock, par value
$.20 per share.
(e) "Notice" shall mean the notice attached hereto as EXHIBIT A.
(f) "Stock Price" shall mean the average of the closing price of the
Common Stock on the five trading days commencing (i) on the day
following the day a Change of Control occurs or (ii) on the day
preceding the day the Company receives the Notice, as the case
may be, on the principal securities exchange on which shares of
Common Stock are listed (if the shares of Common Stock are so
listed), or on the NASDAQ Stock Market (if the shares of Common
Stock are regularly quoted on the NASDAQ Stock Market), or, if
not so listed or regularly quoted, the mean between the closing
bid and asked prices of publicly traded shares of Common Stock
in the over-the-counter market, or, if such bid and asked prices
shall not be available, as reported by any nationally recognized
quotation service selected by the Corporation, or as determined
by the Board of Directors of the Company.
Section 5. BONUS REPLACEMENT. At the Company's sole option and
discretion, it may deliver options to purchase shares of the Common Stock, or
similar securities, in an amount and with such terms and conditions as to
provide Executive with the substantially equivalent economic value as Executive
would receive under the terms and provisions of this Agreement (the "Replacement
Securities"). Upon the delivery to the Executive of the Replacement Securities,
this Agreement shall terminate and be of no further force and effect.
Section 6. NO EMPLOYMENT RIGHTS. Nothing herein shall constitute a
contract of continuing employment or in any manner obligate the Company to
continue the service of the Executive or obligate the Executive to continue in
the service of the Company, and nothing herein shall be construed as fixing or
regulating the compensation paid to the Executive.
Section 7. NOTICES. All notices, consents, waivers and other
communication under this Agreement must be in writing and will be deemed to have
been duly given (a) when delivered by hand (with written confirmation of
receipt), (b) when sent by telecopier (with written confirmation of receipt) and
sent by nationally recognized overnight mail within 24 hours thereafter, or (c)
one day following being sent by a nationally recognized overnight delivery
service (receipt requested), in each case to the appropriate addresses as set
forth at the beginning of this Agreement.
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Section 8. CAPITAL CHANGE OF THE COMPANY. In the event of any
merger, reorganization, consolidation, recapitalization, stock split, stock
dividend, or other change in corporate structure affecting the Common Stock, the
Board of Directors of the Company shall make an appropriate and equitable
adjustment to the formula for calculating the Bonus, so that after such event
the value of the Bonus shall be maintained as immediately before the occurrence
of such event.
Section 9. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be a duplicate original, but
all of which, taken together, shall be deemed to constitute a single instrument.
Section 10. BINDING EFFECT; BENEFITS. This Agreement shall inure to
the benefit of, and be binding upon, the parties to it and their respective
successors and permitted assigns. Nothing contained in this Agreement, express
or implied, is intended to confer upon any person other than the parties to it
and their respective successors and permitted assigns, any rights or remedies
under or by reason of this Agreement.
Section 11. ASSIGNMENTS. This Agreement may not be assigned by any
party without the prior written consent of the other party; provided, however,
the Company may assign this Agreement and all of its rights and obligations
under this Agreement to any Person succeeding to all or a substantial portion of
the business of the Company, on the condition that such Person shall expressly
assume (by contract or operation of law) the Company's obligations under this
Agreement, at which point the Company shall be relieved of its obligations
hereunder.
Section 12. CAPTIONS. The captions contained in this Agreement are
included only for convenience of reference and do not define, limit, explain or
modify this Agreement or its interpretation, construction or meaning and are in
no way to be construed as a part of this Agreement.
Section 13. AMENDMENTS. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by all parties hereto, or in the case of a
waiver, by the party against whom the waiver is to be effective.
Section 14. WAIVER. Failure to insist upon a strict compliance with
any of the terms, covenants or conditions of this Agreement shall not be deemed
a waiver of any such term, covenant or condition, and any such failure at any
one time or more times shall not be deemed a waiver or relinquishment at any
other time or times of any right under the terms, covenants or conditions
hereof.
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Section 15. SEVERABILITY. Except as otherwise provided to the
contrary herein, each section, paragraph, part, term and/or provision of this
Agreement shall be considered severable, and if, for any reason, any section,
paragraph, part, term and/or provision herein is determined to be invalid or
contrary to, or in conflict with, any existing or future law or regulation of a
court or agency having valid jurisdiction, such invalidity or conflict shall not
impair the operation of, or otherwise effect, the other sections, paragraphs,
parts, terms and/or provisions of this Agreement as may remain otherwise valid,
and the latter will continue to be given full force and effect and bind the
parties hereto.
Section 16. APPLICABLE LAW. Jurisdiction over disputes with regard
to this Agreement shall be exclusively in the courts of the State of New Jersey,
and this Agreement shall be construed in accordance with and governed by the
laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
SL INDUSTRIES, INC.
By:
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Warren G. Lichtenstein
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James C. Taylor
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EXHIBIT A
[Date]
SL Industries, Inc.
520 Fellowship Road, Suite A-114
Mount Laurel, New Jersey 08054
Attn: Corporate Secretary
Dear Sir:
Reference is made to that certain Long-Term Bonus Agreement dated as
of September 1, 2005 by and between SL Industries, Inc. (the "Company") and
James C. Taylor (the "Executive"). Capitalized terms used herein are used as
defined in such Agreement.
By this Notice, I hereby elect to receive the full amount of the
vested portion of the Long-Term Bonus, as of the date hereof. Delivery of the
Bonus payment should be sent to my address set forth below.
Please contact me if you require any additional information.
Sincerely yours,
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James C. Taylor
Address:
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SL Industries Inactive
Filed: 7 Sep 05, 12:00am