CHARTER POWER SYSTEMS, INC.
1400 Union Meeting Road
Blue Bell, Pa. 19422-0858
Mr. Alfred Weber
2583 Cold Spring Road
Lansdale, Pennsylvania 19446 As of April 1, 1996
Dear Mr. Weber:
Charter Power Systems, Inc., a Delaware corporation (the
"Company"), agrees to continue to employ Alfred Weber ("you" or the "Executive")
and you agree to continue such employment, under the following terms and
conditions:
1. TERM OF EMPLOYMENT. Except for earlier termination as
provided in Section 5 or 11 below, your employment under this Agreement, and the
term of this Agreement, shall be for an initial period commencing as of April 1,
1996 (the "Effective Date") and terminating on March 31, 1999 (the "Initial
Term"). After the Initial Term, this Agreement and your employment hereunder
shall be renewed automatically for successive terms of one year each (each, a
"Renewal Term"), unless prior to the end of the Initial Term or any Renewal Term
either party shall have given to the other party at least three months' prior
written notice (a "Termination Notice") of termination of this Agreement. If a
Termination Notice is given by either party, (a) the Company shall, without any
liability to you, have the right, exercisable at any time after the
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Termination Notice is given, to elect any other person to the office or offices
in which you are then serving and to remove you from such office or offices, but
(b) except for Sections 3 and 6, all other obligations each of you and the
Company have to the other, including the Company's obligation to pay your
compensation and make available the benefits to which you are entitled
hereunder, shall continue until the end of the Initial Term or any Renewal Term,
as the case may be.
2. COMPENSATION. You shall be compensated for performance of
your obligations under this Agreement at a rate of not less than $400,000 per
annum (such salary, as adjusted from time to time, hereinafter referred to as
the "Base Salary"), payable in such manner as is consistent with the Company's
payroll practices for executive employees. The Base Salary shall be increased
each year, on April 1, 1997, April 1, 1998 and April 1, 1999 (if this Agreement
continues after the Initial Term), by $35,000 per annum. Any increase in the
Base Salary after March 31, 2000, if this Agreement shall be in effect, shall be
determined by the Company's Board of Directors or Compensation Committee in its
discretion; provided that in no event shall the Base Salary be decreased at any
time.
3. DUTIES. (a) During the term of your employment
hereunder, including any Renewal Term hereof, you shall serve and
the Company shall employ you as the Chairman of the Board,
President and Chief Executive Officer of the Company with such
executive duties and responsibilities consistent with such
positions and stature as the Board of Directors from time to time
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may determine. You shall report to, and act under the general direction of, the
Board of Directors of the Company. You shall be nominated, on an annual basis so
long as you continue to be employed hereunder, for election as a director of the
Company and, if elected, you shall serve as a director. In addition, at the
request of the Board of Directors, you shall serve as an officer and/or director
of any of the Company's subsidiaries, in all cases in conformity with the
by-laws and the policies of the Board of Directors of each such corporation,
without additional compensation.
(b) You shall be required to devote your entire business time
and energies during normal business hours to the business and affairs of the
Company and its subsidiaries. Nothing in this Section shall be construed as
prohibiting you from investing your personal assets in businesses in which your
participation is solely that of a passive investor in such form or manner as
will not violate Section 8 hereof or require any services on your part in the
operation or affairs of those businesses. You may also participate in
philanthropic or civic activities so long as they do not materially interfere
with your performance of your duties hereunder.
(c) You shall be subject to the Company's rules, practices and
policies applicable to the Company's senior executive employees, except to the
extent the same are inconsistent with any of the express provisions hereof.
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4. BENEFITS. (a) You shall have the benefit of and be entitled
to participate in such employee benefit plans and programs, including life,
disability and medical insurance, pension, savings, retirement and other similar
plans, as the Company now has or hereafter may establish from time to time, and
in which you would be entitled to participate pursuant to the terms thereof. The
foregoing, however, shall not be construed to require the Company to establish
any such plans or to prevent the Company from modifying or terminating any such
plans, and no such action or failure thereof shall affect this Agreement.
(b) You shall be entitled (i) to participate in the Company's
Incentive Compensation Plan each year in accordance with criteria and for
amounts approved by the Compensation Committee, and (ii) to be granted options,
to the extent (if any) approved by the Compensation Committee or the relevant
Option Committee, under the Company's stock option plans in effect from time to
time.
(c) You shall be entitled to four weeks of vacation
each year.
(d) The Company shall reimburse you annually for up to $5,000
of fees and expenses incurred by you for personal tax and financial planning
advice, upon presentation by you of appropriate substantiation of such fees and
expenses. The Company also shall reimburse you for any reasonable legal fees
incurred by you in the negotiation and preparation of this Agreement.
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(e) The Company shall provide you with a leased automobile of
reasonable size and quality suitable to your position.
5. CHANGE OF CONTROL. In the event of a Change of
Control Termination of this Agreement, you shall be entitled to
certain payments and benefits, as provided in Exhibit A hereto.
6. WORKING AND OTHER FACILITIES. During the Initial Term and
any Renewal Term, you shall be provided with such working facilities and other
support services as are suitable to your position and appropriate for the
performance of your duties. In the event the Company's principal executive
offices are relocated to a location more than fifty (50) miles from your
residence, the Company shall reimburse your moving expenses (including
reasonable costs relating to any interim living accommodations).
7. EXPENSES. The Company shall reimburse you for all
reasonable expenses incurred by you in connection with your
employment hereunder, and vouchered by you to the Company in
accordance with its expense reimbursement practice.
8. RESTRICTIVE COVENANTS. (a) During such time as
you shall be employed by the Company, and for a period of one
year thereafter, you shall not, without the written consent of
the Board of Directors, directly or indirectly, become associated
with, render services to, invest in, represent, advise or
otherwise participate as an officer, employee, director,
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stockholder, partner or agent of, or as a consultant for, any business within
the United States, Canada or Mexico which is competitive with the business in
which the Company is engaged at the time your employment with the Company ceases
(a "Competitive Business"); PROVIDED, HOWEVER, that (i) nothing herein shall
prevent you from investing without limit in the securities of any company listed
on a national securities exchange or quoted on the NASDAQ quotation system,
PROVIDED that your involvement with any such company is solely that of a
stockholder, and (ii) nothing herein is intended to prevent you from being
employed during the one-year period following the termination of your employment
with the Company by any business other than a Competitive Business.
(b) The parties hereto intend that the covenant contained in
this Section 8 shall be deemed a series of separate covenants for each
appropriate jurisdiction. If, in any judicial proceeding, a court shall refuse
to enforce all the separate covenants deemed included in this Section 8 on
grounds that, taken together, they cover too extensive a geographic area, the
parties intend that those covenants (taken in order of the jurisdictions that
are the least populous) that, if eliminated would permit the remaining separate
covenants to be enforced in that proceeding, shall, for the purpose of such
proceeding, be deemed eliminated from the provisions of this Section 8.
9. CONFIDENTIALITY, NONINTERFERENCE AND PROPRIETARY
INFORMATION. (a) In the course of your employment by the
Company hereunder, you will have access to confidential or
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proprietary data or information of the Company. You shall not at any time
divulge or communicate to any person, nor shall you direct any Company employee
to divulge or communicate to any person (other than to a person bound by
confidentiality obligations similar to those contained herein and other than as
necessary in performing your duties hereunder) or use to the detriment of the
Company or for the benefit of any other person, any of such confidential or
proprietary data or information, except to the extent the same (i) becomes
publicly known other than through a breach of this Agreement by you, (ii) was
known to you prior to the disclosure thereof by the Company to you or (iii) is
subsequently disclosed to you by a third party who shall not have received it
under any obligation of confidentiality to the Company. The provisions of this
Section 9(a) shall survive your employment hereunder, whether by the normal
expiration thereof or otherwise, for as long as such data or information remains
confidential. The term "confidential or proprietary data or information" as used
in this Agreement shall mean data or information not generally available to the
public, including personnel information, financial information, customer lists,
supplier lists, product and trading specifications, trade secrets, information
concerning product composition and formulas, tools and dies, drawings and
schematics, manufacturing processes, information regarding operations, systems
and services, knowhow, computer and any other processed or collated data,
computer programs, and pricing, marketing, sales and advertising data.
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(b) You shall not, during the term of this Agreement and for a
period of one year after the termination of your employment by the Company, for
your own account or for the account of any other person, interfere with the
Company's relationship with any of its suppliers, customers or employees;
PROVIDED, however, that you shall not be prohibited from contacting suppliers or
customers after termination of your employment with regard to matters that do
not violate your noncompetition or confidentiality obligations contained in
Sections 8(a) and 9(a); and, PROVIDED further that such contacts do not
interfere with the Company's relationship with such parties.
(c) You shall at all times promptly disclose to the Company,
in such form and manner as the Company reasonably may require, any inventions,
improvements or procedural or methodological innovations, programs, methods,
forms, systems, services, designs, marketing ideas, products or processes
(whether or not capable of being trade-marked, copyrighted or patented)
conceived or developed or created by you during and in connection with your
employment hereunder and which relate to the business of the Company
("Intellectual Property"). All such Intellectual Property shall be the sole
property of the Company. You shall execute such instruments and perform such
acts as reasonably may be requested by the Company to transfer to and perfect in
the Company all legally protectable rights in such Intellectual Property. If the
Company is unable for any reason to secure your signature on such instruments,
you irrevocably
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appoint the Company and its duly authorized officers and agents as your agents
and attorneys-in-fact to execute such instruments and to do such things with the
same legal force and effect as if executed or done by you. The Company shall not
claim any benefits under this paragraph if the same are substantially derived or
adapted from information or data held or possessed by third parties and
generally available to you whether or not employed by the Company.
(d) All written materials, records and documents made by you
or coming into your possession during your employment concerning any products,
processes or equipment, manufactured, used, developed, investigated or
considered by the Company or otherwise concerning the business or affairs of the
Company, shall be the sole property of the Company, and upon termination of your
employment, or upon the request of the Company during your employment, you shall
deliver the same to the Company. In addition, upon termination of your
employment, or upon request of the Company during your employment, you shall
deliver to the Company all other Company property in your possession or under
your control, including confidential or proprietary data or information and all
Company credit cards.
10. EQUITABLE RELIEF. With respect to the covenants
contained in Sections 8 and 9 of this Agreement, you acknowledge
that any remedy at law for any breach of said covenants may be
inadequate and that the Company, in addition to its rights at
law, shall be entitled to specific performance or any other mode
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of injunctive or other equitable relief to enforce its rights
hereunder.
11. TERMINATION; ADDITIONAL COMPENSATION. This
Agreement, and your employment hereunder, shall terminate prior
to the end of the Initial Term or any Renewal Term, upon the
following terms and conditions:
(a) This Agreement shall terminate automatically
on the date of your death. Notwithstanding the foregoing, the Company shall
continue to make payments to your estate of your Base Salary until six months
after your death, at the rate in effect from time to time during such period
pursuant to this Agreement (including any increases pursuant to Section 2).
(b) This Agreement shall be terminated, at the
option of the Company, if you are unable to perform a substantial portion of
your duties hereunder for any 180 days (whether or not consecutive) during any
period of 365 consecutive days by reason of physical or mental disability.
Notwithstanding the foregoing, the Company shall continue to pay to you, until
six months after termination of your employment due to such disability, your
Base Salary at the rate in effect from time to time during such period pursuant
to this Agreement (including any increases pursuant to Section 2), but less any
amounts paid to you pursuant to any disability policy sponsored by the Company.
For purposes of this Agreement, "physical or mental disability" shall mean your
inability, due to health reasons, to discharge properly your duties of
employment, supported by the opinion of a physician
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reasonably satisfactory to both you and the Company. If the parties do not agree
on a mutually satisfactory physician within ten days of written demand by one or
the other, a physician shall be selected by the president of the Pennsylvania
Medical Association, and the physician shall, within 30 days thereafter, make a
determination as to whether disability exists and certify the same in writing.
The services of the physician shall be paid for by the Company. You shall fully
cooperate with the examining physician including submitting yourself to such
examinations as may be requested by the physician for the purpose of determining
whether you are disabled.
(c) This Agreement shall terminate immediately
upon the Company's sending you written notice terminating your employment
hereunder for Cause. "Cause", as used herein, shall mean: (i) your conviction of
a felony (other than a traffic violation); (ii) your continued material breach
of any obligations under this Agreement 30 days after the Company has given you
notice thereof in reasonable detail, if such breach has not been cured by you
during such period; or (iii) your gross negligence or willful misconduct with
respect to your duties or gross misfeasance of office.
(d) You shall have the right to terminate this
Agreement effective at any time by giving at least six month's prior written
notice of termination to the Company.
(e) Upon termination of this Agreement for any
reason, in addition to any other rights or benefits to which you
may be entitled under this Agreement, you shall be paid all
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Accrued Obligations through the date of termination. Accrued Obligations shall
mean (i) your Base Salary through the date of termination, (ii) any annual bonus
earned pursuant to the terms of any applicable incentive compensation or bonus
plans of the Company but not yet paid with respect to any fiscal year completed
prior to termination, (iii) a prorated annual bonus for the fiscal year in which
termination occurs equal to the product of (x) the annual bonus paid to you for
the last full fiscal year of the Company multiplied by (y) a fraction, the
numerator of which is the number of days in the current fiscal year during which
you were employed by the Company, and the denominator of which is 365; and (iv)
any accrued vacation pay not yet paid by the Company; PROVIDED, that if
termination is by the Company for Cause or by you voluntarily, the term "Accrued
Obligations" will not include (iii) above. Upon termination, (w) you shall also
be entitled to all rights and benefits under benefit and incentive plans (other
than those relating to the annual bonus) in accordance with the respective terms
of the plans; (x) you shall be reimbursed for all of your business expenses
incurred prior to termination in accordance with Section 7 above; (y) the
Company shall, at your request within 15 days after termination and at your
expense, assign to you the lease and any related purchase option for the
automobile provided to you pursuant to Section 4(e), provided such lease and
purchase option is assignable; and (z) to the extent the Company's life
insurance plan has a conversion option available upon termination of employment,
the Company shall make such option available to you. For purposes of
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(ii) above, a bonus shall be deemed to be earned upon completion of the fiscal
year to which it relates regardless of whether the Compensation Committee has
approved bonuses for such year as of the date of termination.
(f) If your employment hereunder shall be
terminated by the Company (i) without Cause, other than pursuant to Section
11(a) or 11(b), or (ii) as a result of nonrenewal pursuant to a Termination
Notice given by the Company under Section 1, then in addition to any other
rights or benefits to which you may be entitled, the Company shall, for a period
of one year after termination, (i) continue to pay you your Base Salary at the
rate in effect from time to time during such one-year period pursuant to Section
2, (ii) continue to provide you with a leased automobile pursuant to Section
4(e), and (iii) continue all other benefits provided to you prior to termination
(except not including any bonus with respect to the period after termination).
The compensation under this Section 11(f) shall not be payable in the event of a
Change of Control Termination, which shall be governed by the terms of Exhibit A
hereto. Nothing herein shall limit or affect any rights you may have in the
event of a termination of this Agreement by the Company in violation of its
terms.
12. ENTIRE AGREEMENT; MODIFICATION; CONSTRUCTION.
This Agreement, together with Exhibit A hereto, constitutes the
full and complete understanding of the parties, and supersedes
all prior agreements and understandings, oral or written, between
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the parties, with respect to the subject matter hereof. Exhibit A is hereby
incorporated by reference and made a part of this Agreement. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by either party, or anyone acting
on behalf of either party, which are not embodied or referred to herein. This
Agreement may not be modified or amended except by an instrument in writing
signed by the party against which enforcement thereof may be sought.
13. SEVERABILITY. Any term or provision of this Agreement that
is held to be invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of that invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction.
14. WAIVER OF BREACH. The waiver by either party of a
breach of any provision of this Agreement, which waiver must be
in writing to be effective, shall not operate as or be construed
as a waiver of any subsequent breach.
15. NOTICES. All notices hereunder shall be in
writing and shall be sent by messenger or by certified or
registered mail, postage prepaid, return receipt requested, if to
you, to your residence set forth above, and if to the Company, to
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the address set forth above with copies to the Chief Financial Officer, at the
Company's address, and to Proskauer Rose Goetz & Mendelsohn LLP, 1585 Broadway,
New York, New York 10036, Attention: Steven L. Kirshenbaum, Esq., or to such
other address as either party to this Agreement shall specify to the other.
16. ASSIGNABILITY; BINDING EFFECT. This Agreement shall not be
assignable by either party, except that it may be assigned to an acquiror of all
or substantially all of the assets of the Company, subject to your rights
arising from a Change of Control as provided in Exhibit A. This Agreement shall
be binding upon and inure to the benefit of you, your legal representatives,
heirs and distributees, and shall be binding upon and inure to the benefit of
the Company, its successors and assigns.
17. GOVERNING LAW. All questions pertaining to the
validity, construction, execution and performance of this
Agreement shall be construed and governed in accordance with the
laws of the Commonwealth of Pennsylvania, without giving effect
to the conflicts or choice of law provisions thereof.
18. ARBITRATION. Any controversy or claim arising out
of or relating to this contract, or the breach thereof, shall be
settled in Philadelphia, Pennsylvania or other mutually agreed
location, by arbitration administered by the American Arbitration
Association under its Commercial Arbitration Rules, and judgment
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on the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
19. HEADINGS. The headings in this Agreement are
intended solely for convenience of reference and shall be given
no effect in the construction or interpretation of this
Agreement.
20. COUNTERPARTS. This Agreement may be executed in
several counterparts each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
If this letter correctly sets forth our understanding, please
sign the duplicate original in the space provided below and return it to the
Company.
CHARTER POWER SYSTEMS, INC.
By:/s/ Stephen E. Markert, Jr.
----------------------------
Agreed as of the date first above written:
/s/ Alfred Weber
- ----------------------------------
Alfred Weber
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EXHIBIT A TO EMPLOYMENT AGREEMENT ("AGREEMENT")
OF ALFRED WEBER DATED AS OF APRIL 1, 1996
I. SPECIAL TERMINATION PROVISIONS. In the event a Change of
Control (as defined below) occurs, and within twenty-four months after such
Change of Control: (a) the Executive's employment is terminated pursuant to a
Termination for Good Reason (as defined below); or (b) the Executive's
employment with the Company is terminated by the Company for any reason other
than death, disability or for Cause pursuant to Sections 11(a), (b) or (c) of
the Agreement; or (c) the Executive's employment is terminated or this Agreement
is not renewed due to a Termination Notice given by the Company, as provided in
Section 1(a) of the Agreement (the events under (a), (b) and (c) herein
collectively called a "Change of Control Termination"), the Executive shall be
entitled to receive the payments and benefits set forth in Section III below.
II. DEFINITIONS. (a) CHANGE OF CONTROL. For
purposes of the Agreement, a "Change of Control" shall be deemed
to have occurred if: (i) any person (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in
Sections 13(d) and 14(d) thereof)), excluding the Company, any "Subsidiary" and
any employee benefit plan sponsored or maintained by the Company or any
Subsidiary (including any trustee of any such plan acting in his capacity as
trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange
Act, becomes the beneficial
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owner of shares of the Company having at least thirty percent (30%) of the total
number of votes that may be cast for the election of directors of the Company;
(ii) the shareholders of the Company shall approve any merger or other business
combina tion of the Company, sale of all or substantially all of the Company's
assets or combination of the foregoing transactions (a "Transaction"), other
than a Transaction involving only the Company and one or more of its
Subsidiaries, or a Transaction immediately following which the shareholders of
the Company immediately prior to the Transaction continue to have a majority of
the voting power in the resulting entity (excluding for this purpose any
shareholder owning directly or indirectly more than ten percent (10%) of the
shares of the other company involved in the Transaction) and no person is the
beneficial owner of 30% of the shares of the resulting entity as contemplated by
Section II(a)(i) above, or (iii) within any twenty-four (24) month period
beginning on or after the date hereof, the persons who were directors of the
Company immediately before the beginning of such period (the "Incumbent
Directors") shall cease to constitute at least a majority of the Board or the
board of directors of any successor to the Company, provided that any director
who was not a director as of the date hereof shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then
qualified as Incumbent Directors either actually or by prior operation of this
Section II(a)(iii), unless such election, recommendation or approval was
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the result of an actual or threatened election contest of the type contemplated
by Regulation 14a-11 promulgated under the Exchange Act or any successor
provision. Notwithstanding the foregoing, no Change of Control of the Company
shall be deemed to have occurred for purposes of this Agreement by reason of any
actions or events in which the Executive participates in a capacity other than
in his capacity as an executive or director of the Company.
(b) TERMINATION FOR GOOD REASON. For purposes of
the Agreement, a Termination for Good Reason means a termination by Executive by
written notice given within ninety (90) days after the occurrence of the Good
Reason event. A notice of Termination for Good Reason shall indicate the
specific termination provision in Section II(c) relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
Termination for Good Reason. The failure by Executive to set forth in such
notice any facts or circumstances which contribute to the showing of Good Reason
shall not waive any right of Executive hereunder or preclude Executive from
asserting such fact or circumstance in enforcing his rights hereunder. The
notice of Termination for Good Reason shall provide for a date of termination
not less than ten (10) nor more than sixty (60) days after the date such Notice
of Termination for Good Reason is given.
(c) GOOD REASON. For purposes of the Agreement,
"Good Reason" shall mean the occurrence, without Executive's
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express written consent, of any of the following circumstances, unless such
circumstances are fully corrected prior to the date of termination specified in
the notice of Termination for Good Reason as contemplated in Section II(b)
above: (i) Any material diminution of Executive's positions, duties or
responsibilities hereunder (except in each case in connection with the
termination of Executive's employment for Cause pursuant to Section 11(c) of the
Agreement or due to disability or death pursuant to Sections 11(a) or 11(b) of
the Agreement, or temporarily as a result of Executive's illness or other
absence), or the assignment to Executive of duties or responsibilities that are
inconsistent with Executive's position as Chairman of the Board, President and
Chief Executive Officer; (ii) Removal of, or the nonreelection of, the Executive
from the officer positions with the Company specified herein; (iii) Relocation
of the Company's principal United States executive offices to a location more
than fifty (50) miles from his residence at the time of the relocation; (iv)
Failure by the Company, after a Change of Control, (A) to continue any bonus
plan, program or arrangement in which Executive is entitled to participate
immediately prior to the Change of Control (the "Bonus Plans"), provided that
any such Bonus Plans may be modified at the Company's discretion from time to
time but shall be deemed terminated if (x) any such plan does not remain
substantially in the form in effect prior to such modification and (y) if plans
providing Executive with substantially similar benefits are not substituted
therefor ("Substitute Plans"), or (B) to continue Executive as a
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participant in the Bonus Plans and Substitute Plans on at least the same basis
as to potential amount of the bonus and substantially the same level of criteria
for achievability thereof as Executive participated in immediately prior to any
change in such plans or awards, in accordance with the Bonus Plans and the
Substitute Plans; (v) Any material breach by the Company of any provision of
this Agreement; (vi) If the Executive is on the Board of Directors at the time
of a Change of Control, Executive's removal from or failure to be reelected to
the Board of Directors thereafter or (vii) Failure of any successor to the
Company to assume in a writing delivered to Executive upon the assignee becoming
such, the obligations of the Company hereunder.
III. PAYMENTS AND BENEFITS. Upon a Change of Control
Termination, as provided in Section I(a) above, the Company shall
pay or provide the Executive the following payments and benefits:
(a) The Company shall pay to the Executive in a
lump sum within five business days after the date of termination any Accrued
Obligations.
(b) The Company shall pay to the Executive as
severance pay, not later than the fifth business day following the date of
termination of Executive's employment:
(i) a lump sum in an amount equal to two (2)
years of the Executive's Base Salary (or the aggregate Base Salary the Executive
would have earned for the Term Balance, as defined below, if greater); and
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(ii) a lump sum in an amount equal to the
product of (A) the annual bonus paid by the Company to the Executive based on
the average of the bonuses paid during the last two fiscal years of the Company
ending prior to the date of termination, multiplied by (B) the greater of two or
the number of years (including fractions) remaining in the Term Balance.
For purposes of this Exhibit, Term Balance shall mean the balance of the Initial
Term after termination, if termination occurs during the Initial Term.
(c) As additional severance, the Company shall
continue the participation of the Executive and the Executive's dependents for
the greater of two (2) years or the Term Balance (and at the same level and at
the same charges to the Executive) in all health, medical and accident, life and
other welfare plans (as defined in Section 3(1) of ERISA), in which the
Executive was participating immediately prior to the date of termination, except
for any disability plans, and shall provide the Executive with a leased
automobile pursuant to Section 4(e) for such period; PROVIDED, however, that to
the extent the Company's plans do not permit such continued participation or
such participation would have an adverse tax impact on such plans or on the
other participants in such plans, the Company may instead provide materially
equivalent benefits to the Executive outside of such plans; PROVIDED further
that under such circumstances, (i) medical insurance benefits may be provided by
the Company paying
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any COBRA premiums (COBRA coverage, in any event, to be measured from the date
of termination of employment) and (ii) if the Company is unable to continue the
Executive's life insurance coverage, it shall pay the Executive an amount equal
to twice the premium paid during the year prior to termination or if the
Executive converts the insurance to an individual policy, the Company shall pay
the premium for such insurance for two years.
The Executive shall complete such forms and take such physical
examinations as reasonably requested by the Company. To the extent the Executive
incurs any tax obligation as a result of the provisions of this paragraph (c)
that the Executive would not have incurred if the Executive remained an employee
of the Company and had continued to participate in the benefit plans as an
employee, the Company shall pay to the Executive, at the time the tax is due, an
amount to cover such taxes and the taxes on the amount paid to cover such taxes.
(d) To the extent permitted under the terms of
the applicable stock option or restricted stock plan (if any), any stock options
that would vest in the two (2) years after termination, or during the Term
Balance, if greater, and any restricted stock that would become nonforfeitable
in such two (2) year period or during the Term Balance, if greater, shall
immediately vest or become nonforfeitable, as the case may be, and the exercise
period of any stock options shall be extended as if the Executive remained
employed until the end of such additional two (2) years, or the Term Balance,
whichever is
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longer. In the event the foregoing sentence becomes applicable, the Company
agrees to cause the Board of Directors or plan committee to take all steps
necessary to implement the foregoing sentence.
8
SECURED PROMISSORY NOTE
$1,057,138 April 30, 1996
FOR VALUE RECEIVED, ALFRED WEBER (the "Payor") hereby promises
to pay to CHARTER POWER SYSTEMS, INC., a Delaware corporation (the "Company"),
the principal sum of One Million Fifty Seven Thousand One Hundred Thirty Eight
($1,057,138), on April 29, 1997 (the "Due Date"). The Payor also agrees to pay
the Company interest on the outstanding principal amount hereof at the rate of
5.33% per annum, payable annually or upon prepayment of this Note in full.
Payments of principal and interest are to be made in lawful money of the United
States of America at the offices of the Company or at such other place as the
holder hereof shall designate.
The Payor may by written notice given to the Company prior to
the Due Date extend the Due Date to a date no later than April 29, 1999.
This Note is secured by the pledge by the Payor to the Company
of certain shares ("Shares") of common stock of the Company, in accordance with
the terms of a Pledge and Security Agreement (the "Security Agreement") between
the Payor and the Company, dated as of April 30, 1996, and in that respect is
subject to all of the terms, provisions and conditions of the Security
Agreement.
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If the Payor shall sell or transfer any of his Shares or the
proceeds thereof, or any cash (other than cash dividends), securities, or other
property at any time and from time to time receivable or otherwise distributed
in respect of or in exchange for any or all of the Shares (collectively, the
"Additional Shares"), there shall be due and payable, immediately upon the
consummation of the sale or transfer, a payment of principal hereunder in an
amount equal to the product obtained by multiplying the then outstanding
principal amount of this Note by a fraction, the numerator of which shall be the
number of Shares and Additional Shares then sold or transferred and the
denominator of which shall be the number of Shares and Additional Shares then
owned by the Payor (before giving effect to the sale or transfer). Nothing in
this paragraph shall be deemed to permit any sale or transfer by the Payor of
any Shares or Additional Shares, to the extent the same otherwise would be
prohibited by the provisions of any other agreement to which the Payor and the
Company are parties.
If: (i) the Payor fails to make any payment hereunder within
ten days after notice from the Company to the Payor that the payment is due; or
(ii) the Payor's employment with the Company is terminated for "Cause", as
defined in the employment agreement, dated as of April 1, 1996, between the
Payor and the Company, the then outstanding principal balance hereof, together
with all accrued and unpaid interest, shall be immediately due and payable.
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The Payor may, at any time and from time to time, prepay in
whole or part, without premium or penalty, the then outstanding principal
balance hereof and accrued but unpaid interest thereon.
The Payor hereby agrees to pay all reasonable costs, fees and
expenses incurred by the Company for the collection of all sums due hereunder,
including reasonable attorneys' fees and court costs. The Payor hereby waives
presentment, demand, notice of dishonor, protest and all other demands and
notices in connection with this Note (including any acceleration of the maturity
hereof) and further agrees that this Note shall be deemed to have been made
under and shall be governed by the laws of the State of New York in all respects
(without giving effect to the conflicts of law provisions thereof), including
matters of construction, validity and performance, and that none of its terms or
provisions may be waived, altered, modified or amended except to the extent the
Company may consent thereto in writing.
IN WITNESS WHEREOF, the Payor has executed and delivered this
Note to the Company as of the date first above written.
/s/ Alfred Weber
----------------------------
ALFRED WEBER
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OPTION
SECURED PROMISSORY NOTE
$664,400 April 30, 1996
FOR VALUE RECEIVED, ALFRED WEBER (the "Payor") hereby promises
to pay to CHARTER POWER SYSTEMS, INC., a Delaware corporation (the "Company"),
the principal sum of Six Hundred Sixty-four Thousand Four Hundred Dollars
($664,400.00), without interest, on October 31, 1997. Payment of principal is to
be made in lawful money of the United States of America at the offices of the
Company or at such other place as the holder hereof shall designate.
This Note is secured by the pledge by the Payor to the Company
of certain shares of common stock of the Company, in accordance with the terms
of a Pledge and Security Agreement (the "Security Agreement") between the Payor
and the Company, dated as of April 30, 1996, and in that respect is subject to
all of the terms, provisions and conditions of the Security Agreement.
This Note evidences a loan made by the Company to the Payor to
enable him to purchase an aggregate 110,000 shares of common stock of the
Company (the "Shares"). If the Payor shall sell or transfer any of his Shares or
the proceeds thereof, or any cash (other than cash dividends), securities, or
other property at any time and from time to time receivable or otherwise
distributed in respect of or in exchange for any or all of the Shares
(collectively, the "Additional Shares"), there
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shall be due and payable, immediately upon the consummation of the sale or
transfer, a payment of principal hereunder in an amount equal to the product
obtained by multiplying the then outstanding principal amount of this Note by a
fraction, the numerator of which shall be the number of Shares and Additional
Shares then sold or transferred and the denominator of which shall be the number
of Shares and Additional Shares then owned by the Payor (before giving effect to
the sale or transfer). Nothing in this paragraph shall be deemed to permit any
sale or transfer by the Payor of any Shares or Additional Shares, to the extent
the same otherwise would be prohibited by the provisions of any other agreement
to which the Payor and the Company are parties.
If: (i) the Payor fails to make any payment hereunder within
ten days after notice from the Company to the Payor that the payment is due; or
(ii) the Payor's employment with the Company is terminated for "Cause", as
defined in the employment agreement, dated as of April 1, 1996, between the
Payor and the Company; or (iii) a Default (as such term is defined in the
Security Agreement) shall have occurred under the Security Agreement (each of
the events listed in (i), (ii) and (iii) above being an "Event of Default"
hereunder), the then outstanding principal balance hereof shall be immediately
due and payable.
The Payor may, at any time and from time to time, prepay in
whole or part, without premium or penalty, the then outstanding principal
balance hereof.
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The Payor hereby agrees to pay all reasonable costs, fees and
expenses incurred by the Company for the collection of all sums due hereunder,
including reasonable attorneys' fees and court costs. The Payor hereby waives
presentment, demand, notice of dishonor, protest and all other demands and
notices in connection with this Note (including any acceleration of the maturity
hereof) and further agrees that this Note shall be deemed to have been made
under and shall be governed by the Laws of the State of New York in all respects
(without giving effect to the conflicts of law provisions thereof), including
matters of construction, validity and performance, and that none of its terms or
provisions may be waived, altered, modified or amended except to the extent the
Company may consent thereto in writing.
IN WITNESS WHEREOF, the Payor has executed and delivered this
Note to the Company as of the date first above written.
/s/ Alfred Weber
--------------------------
ALFRED WEBER
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PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated April 30, 1996,
between ALFRED WEBER ("Pledgor") and CHARTER POWER SYSTEMS, INC.,
a Delaware corporation ("the Company").
WHEREAS, the Company has made loans (collectively, the "Loan")
to Pledgor on the date hereof (a) in the amount of $664,400 to purchase 60,000
shares (the "Option Shares") of Common Stock of the Company, par value $.01 per
share ("Common Stock"), upon the exercise of an option granted to him pursuant
to the Option Agreement dated May 30, 1989, as amended (the "Option Agreement"),
between Pledgor and the Company, and (b) in the amount of $1,057,138; and
WHEREAS, in order to induce the Company to make the Loan,
Pledgor has agreed to grant, and does hereby grant, to the company, a security
interest in the Option Shares.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. CREATION OF SECURITY INTEREST. As security for
payment in full of the Loan, Pledgor hereby pledges,
hypothecates, assigns, transfers, sets over and delivers unto the
Company as collateral security, and hereby grants to the Company
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a first lien and security interest in, all of the Option Shares, the proceeds
thereof, and all cash (other than cash dividends, except to the extent expressly
provided herein), securities or other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any of the
Option Shares (all of such Option Shares, proceeds thereof, cash (other than
cash dividends, except to the extent expressly provided herein), securities and
other property hereinafter being referred to collectively as the "Collateral").
Concurrently with the execution of this Agreement, Pledgor is delivering to the
Company (i) all stock certificates representing the Option Shares and (ii) a
duly endorsed irrevocable stock power in blank therefor.
2. STOCK DIVIDENDS AND ADJUSTMENTS; VOTING RIGHTS. If, during
the term of this Agreement, any stock dividend, reclassification, stock split,
readjustment, warrant, option or right to acquire additional securities is
issued with respect to the Collateral or any part thereof, or any other change
is made in the capital structure of the Company, all new, substituted or
additional shares or securities that Pledgor shall become entitled to receive as
a result thereof promptly shall be delivered to the Company (together with
appropriate instruments of transfer duly endorsed in blank) and, from and after
the time Pledgor shall be entitled to receive the same, those shares and
securities shall be, and be deemed to be, part
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of the property pledged hereunder and included in the term Collateral as
defined herein. So long as a Default (as hereinafter defined) shall not have
occurred and be continuing, Pledgor shall be entitled to receive all cash
dividends payable with respect to, and to exercise all rights to vote, the
securities contained in the Collateral. Upon the occurrence and during the
continuance of a Default, the Company shall be entitled to receive all such cash
dividends and to exercise all such voting rights.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Pledgor hereby represents, warrants and covenants that:
(a) Pledgor is and will be the sole legal and
equitable owner of the Collateral, and Pledgor has and will have
the right to transfer, pledge and deliver the Collateral to the
Company hereunder;
(b) there are and will be no outstanding liens,
encumbrances, or claims in respect of the Collateral other than
the security interest created by this Agreement;
(c) Pledgor will preserve and defend all right,
title and interest of the Company in and to the Collateral
against all claims thereon; and
(d) the pledge of the Collateral made hereby and
the delivery of the Collateral in accordance herewith are and will be effective
to vest in the Company a perfected, first priority security interest in the
Collateral as set forth herein.
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4. DEFAULT; REMEDIES. (a) A Default shall be deemed
to have occurred hereunder if:
(i) an Event of Default (as such term is defined
in the promissory notes evidencing the Loan (the "Notes")) shall
occur;
(ii) Pledgor sells, assigns, transfers or
otherwise disposes of, or grants a lien on or security interest in or option or
right with respect to, or otherwise encumbers the Collateral or any part thereof
or any interest therein, unless concurrently therewith Pledgor repays the Notes
to the extent required in accordance with the terms thereof;
(iii) Pledgor becomes insolvent, makes a general
assignment for the benefit of creditors, or files or has filed against him any
petition under any bankruptcy or insolvency law or any action for the
appointment of a receiver or trustee; PROVIDED, HOWEVER, that in the event of an
involuntary bankruptcy or insolvency proceeding, Pledgor shall have 60 days from
the date of filing thereof to stay such proceeding;
(iv) any of the Collateral shall be attached or
levied upon or seized in any legal proceedings, or held by virtue of any levy or
distraint, which attachment, levy or distraint shall not be vacated within 60
days, PROVIDED, HOWEVER, that any such attachment, levy or distraint shall not
constitute a Default so long as it is stayed; or
(v) Pledgor otherwise defaults in any material
respect in the observance or performance of any representation or
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other covenant or agreement contained herein or in the Note, and that default
continues for a period of ten days after notice thereof from the Company.
(b) If a Default shall have occurred and be continuing, the
Company shall be entitled, in addition to any other rights granted under the
Note, to exercise all of the rights and remedies with respect to the Collateral
of a secured party under the Uniform Commercial Code or any other applicable
law, all of which rights and remedies, to the full extent permitted by law,
shall be cumulative and not alternative. Pledgor agrees that 30 days shall
constitute reasonable notice of a sale or other disposition of any of the
Collateral. The remainder of the proceeds from any such sale or other
disposition, after deducting therefrom all expenses incurred in connection
therewith (including reasonable legal fees and expenses) and after payment in
full of Pledgor's obligations to the Company under the Note and this Agreement,
shall be paid over to Pledgor. The Company shall not sell or otherwise dispose
of a greater number of Option Shares or other Collateral than it reasonably
determines is necessary for the payment in full of Pledgor's obligations to the
Company under the Note and this Agreement, including all expenses incurred in
connection with such sale or other disposition. Pledgor further agrees that a
private sale of the Collateral on such terms as the Company approves shall be
deemed to be commercially reasonable: PROVIDED, HOWEVER, that the Company is
authorized in its absolute
5
discretion to restrict the prospective purchasers to those persons who represent
and agree to the satisfaction of the Company and its counsel that they are
purchasing the Collateral for their own account, for investment, and not with a
view to or for sale in connection with a distribution in violation of the
Securities Act of 1933 or any other applicable law or regulation.
5. WAIVER OF RIGHTS OR REMEDIES. (a) The Company, by act,
delay, omission, acceptance of partial payment or otherwise, shall not be deemed
to have waived any rights or remedies hereunder or under the Note unless the
waiver is in writing and signed by the Company, and then only to the extent
therein set forth. A waiver by the Company of any right or remedy on any one
occasion, shall not be construed as a bar to or waiver of any such right or
remedy, or both, that the Company otherwise would have had on any future
occasion.
(b) To the full extent that Pledgor may lawfully so agree,
Pledgor agrees that he will not at any time plead, claim or take the benefit of
any moratorium or redemption law now or hereafter enforced, in order to prevent
or delay the enforcement of this Agreement or the application of any portion or
all of the Collateral as provided by this Agreement, and Pledgor, for himself
and all who may claim under Pledgor, as far as they now or hereafter lawfully
may, hereby waives the benefit of all such laws.
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6. AUTHORIZATION. The Company shall have and be entitled to
exercise all such powers hereunder as are specifically delegated to the Company
by the terms hereof, together with such powers as are reasonable incidental
thereto. The Company may execute any of its duties hereunder by or through
designees and shall be entitled to retain counsel and to act in reliance upon
the advice of such counsel concerning all matters pertaining to its duties
hereunder. Neither the Company, nor any director, officer or employee of the
Company, shall be liable to Pledgor for any action taken or omitted to be taken
by it or them hereunder in connection herewith, except for its or their own
negligence or willful misconduct or breach of this Agreement. The Company shall
be entitled to rely on any communication, instrument or document believed by it
to be genuine and correct and to have been signed or sent by the proper person
or persons.
7. FURTHER ASSURANCES. Pledgor agrees that he shall at the
request of the Company execute and deliver all such further assignments,
endorsements and other documents and take all such further action as the company
may reasonably request in order to effect the purposes and provisions of this
Agreement and to perfect, continue, better assure or confirm the rights of the
Company in the Collateral provided for hereunder.
8. ERMINATION. The security interest and assignment
created and granted hereunder shall terminate only when Pledgor
has fully satisfied all of his obligations hereunder and under
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the Note, and at that time all Collateral remaining in the possession of the
Company shall be returned to Pledgor, accompanied by appropriate stock powers.
Notwithstanding anything contained herein to the contrary, Pledgor may sell
Collateral free and clear of the security interest and assignment created and
granted hereunder, and the Company will cooperate with Pledgor in connection
with such sale, if concurrently with any such sale Pledgor repays the Notes to
the extent requred in accordance with the terms thereof.
9. NOTICES. Notices or other communications to either of the
parties shall be in writing and shall be deemed to have been duly and properly
given on the date such notices or other communications are (i) personally
delivered with receipt acknowledged, or (ii) received when mailed by registered
or certified mail, postage prepaid, return receipt requested, to the addresses
set forth below or to which other address as either party to this Agreement
shall specify to the other:
To Pledgor: Alfred Weber
2583 Cold Spring Road
Lansdale, PA 19446
To the Company: Charter Power Systems, Inc.
1400 Union Meeting Road
Blue Bell, PA 19422
Attention: Chief Financial Officer
-with a copy to-
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, NY 10036
Attention: Steven L. Kirshenbaum, Esq.
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10. MISCELLANEOUS. (a) This Agreement shall be governed by and
interpreted under the laws of the State of New York applicable to contracts made
and performed therein without regard to the principles of conflict of laws
thereof. If any term or provision of this Agreement shall, for any reason, be
held to be illegal, invalid or unenforceable under the laws of any governmental
authority to which this Agreement is subject, the term or provision shall be
deemed severed from this Agreement, and the remaining terms and provisions shall
be enforceable, to the fullest extent, permitted by law.
(b) This Agreement shall inure to the benefit of and shall be
binding upon the respective successors, assigns and legal representatives of the
parties, except that Pledgor shall not be permitted to assign this Agreement or
any interest herein or in the Collateral, or any part thereof, or otherwise
pledge, encumber or grant any option with respect to the Collateral, or any part
thereof, or any cash or property held by the Company as Collateral under this
Agreement, except to the extent provided herein. The Company may assign this
Agreement, any interest herein or in the Collateral or any part thereof, to any
wholly owned affiliated entity of the Company.
(c) Captions used herein are inserted for reference
purposes only and shall not affect the interpretation or meaning
of this Agreement.
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(d) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
(e) This Agreement may not be changed, modified or, except as
provided in Section 8 hereof, terminated, in whole or in part, except by a
written instrument signed by the party against whom any such change,
modification or termination is sought to be enforced.
IN WITNESS WHEREOF, Pledgor has executed this Agreement on the
date hereinabove first written.
/s/ Alfred Weber
----------------------------
Alfred Weber
TO AND ACCEPTED:
CHARTER POWER SYSTEMS, INC.
By: /s/ Stephen E. Markert, Jr.
- ----------------------------------
Title:
10
Charter Power Systems, Inc.
1400 Union Meeting Road
Blue Bell, Pennyslvania 19422
April 30, 1996
Mr. Alfred Weber
2583 Cold Spring Road
Lansdale, PA 19446
Dear Mr. Weber:
We refer to the Promissory Note (the "Note"), dated April 30,
1996, by you to us in the original principal amount of $1,057,138. We hereby
agree to reimburse you for all interest on the Note accruing through the earlier
of April 29, 1997 or the date of prepayment of the Note, plus an amount equal to
the taxes payable by you on any payments made to you pursuant to this letter.
Very truly yours,
CHARTER POWER SYSTEMS, INC.
By:/s/ Stephen E. Markert, Jr.
-------------------------------
Title:
Agreed to:
/s/ Alfred Weber
- ----------------------------------
ALFRED WEBER