EXHIBIT 10(j)
AGREEMENT
AGREEMENT made December 23, 1981 between Stanley Home Products, Inc.,
a Massachusetts corporation with its principal place of business at 333
Western Avenue, Westfield, Massachusetts ("Stanley") and H.L. Tower, of 250
Halladay Avenue, Suffield, Connecticut ("Employee").
In consideration of the mutual agreements hereinafter contained, the
parties agree as follows:
l. Normal Retirement.
(a) Subject to the provisions of paragraph 9 below, if Employee
retires on or after July 16, 1997, Stanley will pay him each month for the
duration of his life deferred compensation equal to 1/12 of (i) fifty
percent (50%) of the average annual compensation received by him in the
five most highly compensated years of his final ten years of employment, as
determined under paragraph 5 below, less (ii) fifty percent (50%) of his
annual Primary Social Security Benefit, as determined in paragraph 6 below.
(b) The monthly benefit determined under subparagraph (a) above shall
be reduced by the value of the monthly retirement benefit, if any, which
Employee is entitled to receive from any other qualified or non-qualified
plan maintained by Stanley (excluding the portion, if any, of such benefit
based on Employee's contributions to such plan) commencing at such time as
Employee first becomes eligible to receive such benefit, provided, however,
that any such reduction attributable to the Stanley Home Products, Inc.
Pension Plan shall be in an amount such that Tower and his spouse, if she
survives him, will each receive the same benefit under this Contract and
the Pension Plan in combination as he or she would have received under the
Contract alone before the Pension Plan was adopted.
For purposes hereof, the value of the monthly retirement benefit of
any amount which Employee is entitled to receive from a defined
contribution plan based on Stanley's contributions thereto, e.g. a
profit-sharing plan, shall be determined as of the time of Employee's
termination by reference to the annuity table set forth in Exhibit A
attached. It is recognized by the parties that prior to Employee's
termination there may be changes of sufficient importance in one or more of
the assumptions upon which this table is based to make appropriate the use
of an alternative table. In such case, Stanley may substitute an
alternative table but only upon the written recommendation of an
independent nationally recognized firm of compensation consultants, as may
be selected by it, and after written notice to the Employee.
2. Early Retirement. Subject to the provisions of subparagraph 2(d)
and paragraph 9 below,
(a) if Employee's employment terminates during the period from July
16, 1987 to July 16, 1997, Stanley will pay him each month for the duration
of his life the benefit which would be payable if the provisions of
paragraph l above were applied as of the date of such termination, provided
that the portion of the benefit determined under subparagraph l(a) shall be
reduced by the following percentages based on Employee's age at his
termination date (to be adjusted on a daily pro-rata basis if Employee
retires on a day other than his birthday):
Age at Termination Percentage
------------------ ----------
62-64 0%
61 2%
60 4%
59 9%
58 14%
57 19%
56 24%
55 29%
(b) if Employee's employment terminates before July 16, 1987, then,
(i) if such termination is involuntary for any reason other than
for cause, he shall be entitled to receive the benefit
determined under subparagraph 2(a) above as if he had
reached age fifty-five (55) on the date of his termination,
provided that such benefit shall not be payable until his
fifty-fifth (55th) birthday.
(ii) if such termination is voluntary, he shall be entitled to
receive an annual retirement benefit commencing on his
fifty-fifth (55th) birthday, and payable for the remainder
of his life equal to the amount by which (A) the product of
the number of years of employment by Stanley multiplied by
$3,000 exceeds (B) the sum of the annual retirement benefits
received by Employee from any other qualified or
non-qualified plan maintained by Stanley, provided that the
annual benefit payable under this clause (ii) shall not
exceed $50,000. For the purposes hereof, the annual
retirement benefit of any amount which Employee is entitled
to receive from a defined contribution plan, e.g. a profit
sharing plan, shall be the annuity value of such amount
based on the U.S. Life and Actuarial Tables set forth in the
Internal Revenue Service Federal Estate Tax Regulations then
currently in effect.
(c) During the period commencing on the latter to occur of his fifty-
fifth (55th) birthday or termination date, and ending on his sixty-fifth
(65th) birthday, or if different by law such other age as then entitles
Employee to receive his actual, unreduced Primary Social Security Benefit,
Stanley shall pay him an additional monthly amount equal to his Primary
Social Security Benefit.
(d) If Employee's employment terminates by reason of discharge for
cause, neither he nor his wife shall be entitled to receive payment of any
kind under this Agreement; "cause" hereunder shall mean dishonesty,
misconduct, insubordination or any activity which would cause a forfeiture
of rights under paragraph 9 below if it occurred following termination of
employment.
3. Disability.
(a) In the event Employee becomes disabled after reaching age fifty-
five (55) but while still employed by Stanley, he shall receive, commencing
with the month following the commencement of his disability, a monthly
amount determined under paragraph l that would have been payable to him if
he had remained employed until retirement at age sixty-five (65) at the
annual rate of compensation in effect at the time of his disability,
provided that the amount payable hereunder shall be reduced by the monthly
value of any benefit paid to Employee under a sick leave policy or long
term disability income plan maintained by Stanley for so long as such
benefits remain payable.
(b) If Employee applies for payment of a social security disability
benefit prior to age 65 and his application is denied, the Company shall
also pay Employee an additional amount equal to his Primary Social Security
Benefit for as long as Employee remains ineligible to receive such social
security disability benefit prior to age (sixty-five) 65, or if different
by law the then age at which Employee then becomes entitled to receive his
actual primary social security benefit.
For purposes hereof, an Employee shall be deemed to be disabled when he
is rendered incapable of performing the work for which he was employed by a
medically determinable physical or mental condition which is likely to
result in death or to be of long-continued and indefinite duration.
4. Survivors Benefit.
(a) If Employee's employment is involuntarily terminated prior to age
fifty-five (55) for any reason other than cause, and he dies subsequent to
such termination, Stanley will pay his surviving spouse, subject to
subparagraph (d) below, commencing on the date that Employee would have
been fifty-five (55) had he lived, a monthly amount for the remainder of
her life equal to fifty percent (50%) of the benefit that would have been
paid to Employee commencing on his fifty-fifth (55th) birthday, pursuant to
clause (i) of subparagraph 2(b).
(b) In the event that Employee dies after age fifty-five (55) while
still employed by Stanhome, Stanhome will pay his surviving spouse, subject
to subparagraph (d) below, a monthly amount for the remainder of her life
equal to fifty percent (50%) of the monthly benefit that would have been
paid to Employee under paragraph 1 or subparagraphs 2(a) and (c), whichever
is applicable, had he retired on the day immediately prior to the date of
his death, provided however that supplemental social security payments
pursuant to paragraph 2(c) of this contract to a spouse shall not be
subject to actuarial reduction under subparagraph (d) below, shall not be
payable to her unless and until she reaches the age of fifty-five (55) and
shall only continue until she reaches the age of sixty-five (65), or if
different by law such other age as then entitles her to receive her actual
unreduced Primary Social Security benefit.
(c) In the event that Employee's employment by Stanhome terminates
after age fifty-five (55) and he subsequently dies while receiving payments
hereunder, Stanhome will pay his surviving spouse, subject to subparagraph
(d) below, a monthly amount for the remainder of her life equal to fifty
percent (50%) of the monthly benefit he was receiving at the time of his
death, provided however that supplemental social security payments pursuant
to paragraph 2(c) of this contract to a spouse shall not be subject to
actuarial reduction under subparagraph (d) below, shall not be payable to
her unless and until she reaches the age of fifty-five (55) and shall only
continue until she reaches the age of sixty-five (65), or if different by
law such other age as then entitles her to receive her actual unreduced
Primary Social Security benefit. In the event Employee was disabled and
had been receiving a benefit under paragraph 3, the surviving spouse shall
be entitled to receive fifty percent (50%) of the benefit payable under
paragraph 3 without reduction thereunder for any benefits being paid to
Employee under a sick leave policy or a long-term disability income plan
maintained by Stanhome except to the extent such benefits remain payable to
such spouse following Employee's death, provided however that supplemental
social security payments, pursuant to subparagraph 3(b) of this contract to
a spouse shall not be subject to actuarial reduction under subparagraph (d)
below, shall not be payable to her unless and until she reaches the age of
fifty-five (55) and shall only continue until the she reaches age sixty-
five (65), or, if different by law, such other age as then entitles her to
receive her actual unreduced Primary Social Security benefit.
(d) No amounts shall be paid a surviving spouse under subparagraphs
(a), (b), or (c) above unless she shall have survived Employee for a period
of thirty (30) days and shall have been married to him throughout the one
year period ending on Employee's date of death. Further, if the age of the
Employee at the date of his death exceeds the age of his surviving spouse
on such date by more than five years, the benefit payable to such spouse
hereunder shall be actuarially reduced in a manner calculated to reflect
the difference in her actual life expectancy at the time of his retirement
and her life expectancy if she were five years younger than Employee.
(e) If the sum of $20,000 exceeds the total amount paid to the
surviving spouse at time of her death, such excess shall be paid to a
beneficiary to be designated by Employee, or in the absence of his
designation, by his surviving spouse, in writing to Stanley, provided that
in the event no beneficiary has been designated or the designated
beneficiary does not survive such spouse for a period of thirty (30) days,
such excess shall be paid to the personal representative of the surviving
spouse.
5. Annual Compensation. For purposes hereof, Employee will be deemed
to have been employed for the entire calendar month during which his
employment terminates and his annual compensation shall be measured on the
basis of twelve month periods ending with the last day of such month.
"Compensation", for purposes hereunder, shall include total wage,
salary and commission payments received by Employee from the Company,
including base pay, overtime, bonuses, and cash dividend equivalency
payments made to him under Section 2(d)(ii) of the March 15, 1978,
Employment Agreement between Employee and Stanley, but not including
Stanley contributions under Stanley's Employees' Profit Sharing Retirement
Plan, Pension Plan, or under any group life insurance or other qualified or
non-qualified employee retirement or benefit plan or any payment designated
by Stanley as an allowance for Employee's business expenses. Management
Incentive Plan bonuses which are normally awarded in the first half of
March of each year if the Plan criteria are met, shall be deemed to have
been received, whether or not payment is deferred, in the calendar year
with respect to which such bonus is earned, allocated thereto on a monthly
basis. Other compensation whose receipt is deferred by Employee shall be
deemed to have been received for the purposes hereof at the time such
compensation would have been received, if there had been no such deferral.
In the event Employee's compensation for the last twelve month period
cannot be determined by the time the first payment becomes due hereunder,
e.g., due to a bonus payable on the results of the Stanley's operations for
a year in which Employee retires prior to the end of such year, then the
first payments due hereunder shall be based on the estimated amount that
Employee will be entitled to actually receive. The exact amount due
Employee shall be determined as soon as practicable, provided that
following such determination and corresponding adjustment in the monthly
payment to Employee Stanley shall pay Employee an additional lump sum to
adjust for any underpayment to Employee and Employee shall refund to
Stanley any overpayment.
If Employee has been employed for less than ten (10) years at the time
of his termination, his compensation shall be based on the five most highly
compensated years of the years employed, or if employed for less than five
years, based on such lesser number of years employed.
6. Primary Social Security Benefit. Employee's Primary Social
Security Benefit shall be determined on the day prior to the date on which
Employee's employment with Stanley terminates and shall be equal to the
estimated old age retirement benefit Employee will be entitled to receive
under the Federal Social Security Act at age sixty-five (65) (or if
different by law such other age as may then entitle a person to receive his
social security retirement benefits based on his unreduced "primary
insurance amount" under the Social Security Act as then in effect) based on
his earnings up to the day preceding his termination date.
7. Payment.
(a) Amounts payable under the above paragraphs will be paid on or about
the end of the month to which the payment relates. Payment will be made
for the full month in which Employee's death occurs.
(b) Notwithstanding any otherwise applicable provision of this
agreement to the contrary, the retirement benefits due to Tower (or his
beneficiary) under this Agreement, if any, shall be paid in a lump sum upon
the occurrence of a Change in Control (as defined in Annex A attached
hereto) of the Company. Such lump-sum payment shall be the present value
of the benefit payable to Tower hereunder using the Pension Benefit
Guaranty Corporation immediate annuity interest rate as is in effect for
the month in which the payment is mad and the mortality table based on the
UP-1984 Table, all as in accordance with generally acceptable actuarial
principles.
8. Confidential Information and Covenant Not to Compete.
(a) Employee agrees that following termination of employment he will
not disclose any trade secrets or any confidential information nor do
anything detrimental to Stanley or any of its affiliated companies.
(b) Employee will neither engage nor assist, during his life, directly
or indirectly, in work for or with any business organization using any
direct selling sales method in the sale of merchandise, nor in any activity
competitive, directly or indirectly, with Stanley or any of its affiliated
companies, without Stanley's written consent in advance, nor will he do
anything to interfere, directly or indirectly, with the business of Stanley
of any of its affiliated companies. "Direct selling sales method" shall
mean the selling or offering to sell, either through employee sales
personnel or through or by independent salespersons, to consumer purchasers
or prospective consumer purchasers at their residences or at other places
not under the control of the seller. This includes, but is not limited to,
party plan or home demonstration, club demonstration and door-to-door
selling.
(c) Employee's obligations under the foregoing subparagraphs of this
paragraph 8 shall continue notwithstanding the termination of his rights to
receive any payments hereunder.
9. Forfeiture of Payments. Stanley may discontinue payments hereunder
and have no further liability under this Agreement in the event that
Employee fails to observe any of the terms of this Agreement, provided,
however, that if his failure to observe is limited to the terms of
subparagraph 8(b) above and is his first failure, Stanley shall give him
written notice thereof, and if, within 15 days of such notice, Employee
gives Stanley written notice of his discontinuance of the activity
complained of, payments hereunder shall be reinstituted.
10. Assignment. Neither Employee nor his wife shall have any right to
commute, encumber, or dispose of the right to receive payments hereunder,
which payments and the right thereto are expressly declared to be
nonassignable and nontransferable. All rights under the Contract are
merely unsecured contractual rights of Employee or Employee's spouse
against Stanhome. Employee and Employee's spouse are unsecured general
creditors of Stanhome. Stanhome intends to set aside certain assets in a
trust for the payment of benefits under this Contract. In the event of the
insolvency or bankruptcy of Stanhome, any assets set aside in such trust
shall at all times be subject to the claims of Stanhome's general creditors
as if such assets were general assets of Stanhome.
11. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of any successor of Stanley and any such successor shall be
deemed substituted for Stanley under the terms of this Agreement. As used
in this Agreement, the term "successor" shall include any person, firm,
corporation, or other business entity which at any time, whether by merger,
purchase, or otherwise, acquires all or substantially all of the assets or
business of Stanley.
12. Not an Employment Agreement. This Agreement is not an employment
agreement and Stanley reserves the right to discharge Employee with or
without cause. The Agreement in no way affects his rights under the
Stanley Home Products, Inc. Employee's Profit Sharing Retirement Plan or
Pension Plan or under any Stanley group or other insurance policy.
13. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered
mail, or delivered, to his residence in the case of Employee, at 250
Halladay Avenue, Suffield, Connecticut, or, in the case of Stanley, to its
principal office at 333 Western Avenue, Westfield, Massachusetts,
Attention: Secretary. Either party may change the address to which
notices are to be addressed by notice in writing given to the other in
accordance with the terms hereof.
14. Waiver of Breach. The waiver by Stanley of a breach of any
provision of this Agreement by Employee shall not operate or be construed
as a waiver of any subsequent breach by Employee.
15. Governing Law. This Agreement shall be deemed made in the
Commonwealth of Massachusetts, and its form, execution, validity,
construction and performance shall be construed in accordance with the laws
of said Commonwealth.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supercedes the retirement benefits provided under
subparagraph 2(c) of the Employment Agreement as of March 15, 1978, between
Employee and Stanley. It may not be changed orally but only by an
agreement in writing signed by Employee and for Stanley by an officer duly
authorized to enter into said amendment by the Board of Directors.
17. Severability. In the event that any of the terms or provisions of
this Agreement or any portion of such terms or provisions shall be
determined to be invalid or inoperative, such determination shall not
affect the efficacy of the balance of the Agreement and any such invalid or
inoperative term or provision shall be deemed severable.
IN WITNESS WHEREOF, the parties have executed this Agreement.
STANHOME INC.
BY:/s/ G.W. Seawright
-----------------------
/s/ H.L.Tower
---------------------
H.L. Tower Attest:
/s/ Bruce H. Wyatt
-------------------------
Secretary
EXHIBIT "A"
Life Annuity Value
Age
Male Female Value of $1. payable annually for
life, with first payment at age
shown on left
49 55 11.7932
50 56 11.6405
51 57 11.4831
52 58 11.3209
53 59 11.1537
54 60 10.9814
55 61 10.8037
56 62 10.6203
57 63 10.4301
58 64 10.2325
59 65 10.0274
60 66 9.8156
61 67 9.5977
62 68 9.3737
63 69 9.1434
64 70 8.9066
65 71 8.6649
66 72 8.4198
67 73 8.1739
68 74 7.9286
69 75 7.6846
70 76 7.4421
ANNEX A
Change In Control:
As used herein, a "Change in Control" means a Change in Control of a
nature that would, in the opinion of Company counsel, be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided that, without limitation, such a Change in
Control shall be deemed to have occurred if
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) (other than the Company or any subsidiary of the
Company, any trustee or fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries or a
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of
the stock of the Company) becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing twenty-five percent (25%) or
more of the combined voting power of the Company's then outstanding
securities; or
(ii) during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at
the beginning of such period constitute the Board and any new
director (other than a director designated by a Person who had
entered into an agreement with the Company to effect a transaction
described in Clause (i), (iii) or (iv) of this paragraph) whose
election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved cease for any reason to constitute a
majority thereof; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), in
combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, at
least 75% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no Person acquires 25% or more of the combined
voting power of the Company's then outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.