Exhibit 10.21
PERSONAL SERVICES AGREEMENT
PERSONAL SERVICES AGREEMENT dated as of March 11, 1993 by and between
American Biltrite Inc., a Delaware corporation ("ABI"), and Congoleum
Corporation, a Delaware corporation ("Congoleum"), pursuant to the Joint Venture
Agreement dated as of December 16, 1992 (the "Agreement"), by and among ABI,
Congoleum and the other corporations in the Hillside Group (as defined in the
Agreement). Capitalized terms not otherwise defined herein have the meaning
assigned to such terms in the Agreenent.
The Agreement provides for, among other things, the sale, assignment and
transfer by ABI to Newco of all of ABI's right, title and interest in and to all
of the Division Assets and the subsequent contribution of the Division Assets by
Newco to Congoleum (as more fully described in the Agreement) at the Closing
Date (the "Asset Transfer").
This Personal Services Agreement is the agreement referred to in Section
6.01(d) of the Agreement.
In consideration of the Asset Transfer and the other agreements and
provisions of the Agreement and this Personal Services Agreement and for other
good and valuable consideration, ABI and Congoleum hereby agree as follows:
1. Consent to Provision of Services. ABI agrees that Xxxxx X. Xxxxxx,
ABI's Chief Executive Officer (the "Executive"), will serve as Chief Executive
Officer of Congoleum, subject to the terms and conditions provided herein. In
this regard, ABI understands that the Executive shall perform such services as
are appropriate to that position and such other services that are assigned to
him from time to time by the Board of Directors of Congoleum. ABI also
understands that the Executive will devote substantially all of his time,
attention and skill to the business and affairs of Congoleum during normal
working hours. Congoleum acknowledges that the Executive will remain a director,
executive officer and employee of ABI, and nothing set forth in this Agreement
shall prohibit the Executive from performing his duties and responsibilities in
such capacities to ABI in a manner consistent with his past performance of such
duties and responsibilities (other than those previously conducted by the
Executive for the Division).
2. Term. The initial term of this Personal Services Agreement shall begin
on the date hereof and shall continue thereafter for a period of five years
ending on the fifth anniversary of the date hereof and may be renewed for
successive one year periods by the approval of both parties hereto prior to the
end of the initial term or any renewal term; provided, however, that
notwithstanding anything in this Personal Services Agreement to the contrary,
the term of this Personal Services Agreement shall expire upon the first to
occur of: (a) the death of the Executive; (b) the Executive's termination of
employment with ABI; (c) the Disability (as hereinafter defined) of the
Executive or (d) the termination of the Executive's association with Congoleum
for Cause (as hereinafter defined). As used herein, "Disability" shall mean the
Executive's inability to perform properly his duties hereunder for a period of
120 consecutive days, or for a period of 120 non-consecutive days during any
consecutive six-month period, by reason of medical, emotional or mental injury,
illness, disease or defect. As used herein, "Cause" shall mean (i) indictment
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for any felony involving dishonesty or moral turpitude; (ii) embezzlement or
misappropriation of funds or property of Congoleum or its affiliates; (iii) the
Executive's willful refusal to obey or perform lawful resolutions of the Board
of Directors of Congoleum, consistent with the Executive's position as Chief
Executive Officer and reflected in approved minutes thereof after written notice
and reasonable opportunity to cure; (iv) the Executive's chronic absenteeism
after written notice and reasonable opportunity to be heard; (v) the Executive's
chronic alcoholism or other form of substance addition after written notice and
reasonable opportunity to be heard; or (vi) the Executive's willful and material
breach of his duties and obligations, after written notice and reasonable
opportunity to cure. In any event, upon termination of the Executive for Cause,
the Board of Directors of Congoleum shall give him written notice thereof
specifying the grounds for such termination, and the Executive shall be afforded
the opportunity to be heard, together with his counsel, at a meeting of the
Board of Directors of Congoleum, to appeal such termination.
3. Fees and Expenses.
(a) Personal Services Fee. For its agreement to permit the Executive
to provide personal services to Congoleum hereunder, Congoleum shall pay ABI a
personal services fee of $300,000 per year, payable by Congoleum in equal
monthly installments after receipt by Congoleum of an invoice for the same from
ABI. The personal Services fee shall be subject to annual review by the parties,
but any such review shall not in any case result in a decrease in the amount of
such personal services fee.
(b) Incentive Fees. Congoleum shall pay ABI an annual incentive fee,
subject to the attainment by Congoleum of certain business and financial
objectives, as determined by the Board of Directors of Congoleum. The initial
incentive fee payable to ABI under this Section 3(b) (if all stated objectives
are attained) shall be fixed at $200,000. This initial incentive fee, the
incentive targets and other terms of this incentive fee arrangement shall be
subject to annual review by the parties; provided, however, that the incentive
fee payable (if all stated objectives are obtained) shall be $200,000 per year
or more, as determined by the Board of Directors of Congoleum.
(c) Reimbursement of Expenses. Congoleum shall reimburse ABI (or, at
ABI's direction, the Executive) for such reasonable and authorized expenditures,
such as travel and entertainment, which the Executive may incur in conducting
and promoting the business of Congoleum. Such authorized expenditures will be
reimbursed upon presentation by ABI to Congoleum of an itemized accounting of
such expenditures and receipts relating thereto in the form requested by
Congoleum and in conformity with the applicable rules and regulations of the
Internal Revenue Service.
4. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered or mailed if delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like changes of address shall be effective upon receipt):
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(a) If to ABI:
American Biltrite Inc.
00 Xxxxx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
With a copy to:
Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
(b) If to Congoleum:
Congoleum Corporation
000 Xxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx
With a copy to:
Patterson, Belknap, Xxxx & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
5. Headings. The headings contained in this Personal Services Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Personal Services Agreement.
6. Severability. If any term or other provision of this Personal Services
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Personal Services
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Personal Services
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the extent possible.
7. Entire Agreement.This Personal Services Agreement constitutes the
entire agreement and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
8. Parties in Interest. This Personal Services Agreement shall be binding
upon and inure solely to the benefit of each party hereto. Except with respect
to the Executive, who shall be a third party beneficiary of this Personal
Services Agreement, nothing in this Personal Services Agreement, express of
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implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Personal Services
Agreement.
9. Governing Law. This Personal Services Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Personal Services
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
AMERICAN BILTRITE INC.
-------------------------------
By /s/ Xxxxxxx X. Xxxxxx
Title: President
CONGOLEUM CORPORATION
-------------------------------
By: /s/ Xxxxxx X. Xxxxx III
Title: Vice President-Finance
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AMENDMENT TO PERSONAL SERVICES AGREEMENT
THIS AMENDMENT TO PERSONAL SERVICES AGREEMENT, dated as of February 8,
1995, by and between American Biltrite Inc., a Delaware corporation ("ABI"), and
Congoleum Corporation, a Delaware corporation ("Congoleum");
W I T N E S S E T H:
THAT WHEREAS, ABI and Congoleum are parties to a Personal Services
Agreement, dated as of March 11, 1993 (the "Personal Services Agreement"),
pursuant to which ABI agreed that Xxxxx X. Xxxxxx would serve as the Chief
Executive Officer of Congoleum, subject to certain terms and conditions set
forth in the Personal Services Agreement;
WHEREAS, ABI, Congoleum, Hillside Industries Incorporated, a Delaware
corporation ("Hillside"), Congoleum Holdings Incorporated, a Delaware
corporation ("Congoleum Holdings"), and Resilient Holdings Incorporated, a
Delaware corporation ("Resilient Holdings"), are parties to a Plan of
Repurchase, dated as of February 1, 1995 (the "Plan"), pursuant to which, among
other things: Congoleum's direct and indirect parent corporations, Congoleum
Holdings and Resilient Holdings, will be merged with and into Congoleum (the
"Merger"); Congoleum will be recapitalized in the Merger and will issue shares
of its newly authorized Class B common stock, par value $.01 per share (the
"Class B Common Stock"), in the Merger to ABI and Hillside upon the conversion
of their outstanding Class A common stock, par value $.01 per share, and Class B
common stock, par value $.01 per share, respectively, of Congoleum Holdings
outstanding immediately prior to the effectiveness of the Merger; Congoleum will
effect an initial public offering (the "Offering") of shares of newly authorized
Class A common stock, par value $.01 per share; and Congoleum will use the net
proceeds of the Offering, together with certain other funds of Congoleum, to
acquire a portion of the shares of Class B common stock held by Hillside
immediately following the effectiveness of the Merger; and
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Plan that ABI and Congoleum enter into this
amendment to Personal Services Agreement for the purpose of amending the
Personal Services Agreement in certain respects;
NOW, THEREFORE, in consideration of the agreements set forth herein and
the transactions contemplated by the Plan and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Amendment of Section 1. Section 1 of the Personal Services Agreement is
hereby amended to read in full as follows:
"1. Consent to Provision of Services. (a) ABI agrees that Xxxxx X.
Xxxxxx, ABI's Chief Executive Officer, will serve as the Chairman,
President and Chief Executive Officer of Congoleum, subject to the terms
and conditions provided herein. In this regard, ABI understands that he
shall perform such services as are appropriate to that position and such
other services that are assigned to him from time to time by the Board of
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Directors of Congoleum. ABI also understands that he will devote
substantially all of his time, attention and skill to the business and
affairs of Congoleum during normal working hours. Congoleum acknowledges
that Xxxxx X. Xxxxxx will remain a director, executive officer and
employee of ABI, and nothing set forth in this Agreement shall prohibit
him from performing his duties and responsibilities in such capacities to
ABI in a manner consistent with his past performance of such duties and
responsibilities (other than those previously conducted by Xxxxx X. Xxxxxx
for the Division).
(b) ABI agrees that Xxxxxxx X. Xxxxxx, ABI's President and Chief
Operating Officer, will serve as Vice Chairman of Congoleum, subject to
the terms and conditions provided herein. In this regard, ABI understands
that he shall perform such services as are appropriate to that position
and such other services that are assigned to him from time to time by the
Board of Directors of Congoleum. ABI also understands that he will devote
such amount of his business time, attention and skill as is appropriate to
discharge his duties to the business and affairs of Congoleum during
normal working hours. Congoleum acknowledges that Xxxxxxx X. Xxxxxx will
remain a director, executive officer and employee of ABI, and nothing set
forth in this Agreement shall prohibit him from performing his duties and
responsibilities in such capacities to ABI in a manner consistent with his
past performance of such duties and responsibilities (other than those
previously conducted by Xxxxxxx X. Xxxxxx for the Division).
(c) Each of Xxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx is hereinafter
sometimes referred to individually as the "Executive" and they are
hereinafter sometimes referred to collectively as the "Executives."
2. Amendment of Section 2. Section 2 of the Personal Services Agreement is
hereby amended to read in full as follows:
"2. Term. The initial term of this Personal Services Agreement shall
begin on the date hereof and shall continue thereafter for a period of
five years ending on March 11, 1998 and may be renewed for successive one
year periods by the approval of both parties hereto prior to the end of
the initial term or any renewal term (any such renewal by Congoleum to be
authorized by a majority of the disinterested members of the Board of
Directors of Congoleum); provided, however, that notwithstanding anything
in this Personal Services Agreement to the contrary, the term of this
Personal Services Agreement shall expire with respect to a particular
Executive upon the first to occur of: (a) the death of such Executive; (b)
such Executive's termination of employment with ABI; (c) the Disability
(as hereinafter defined) of such Executive or (d) the termination of such
Executive's association with Congoleum for Cause (as hereinafter defined).
As used herein, "Disability" shall mean such Executive's inability to
perform properly his duties hereunder for a period of 120 consecutive
days, or for a period of 120 non-consecutive days during any consecutive
six-month period, by reason of medical, emotional or mental injury,
illness, disease or defect. As used herein, "Cause" shall mean with
respect to a particular Executive. (i) indictment for any felony involving
dishonesty or moral turpitude; (ii) embezzlement or misappropriation of
funds or property of Congoleum or its affiliates; (iii) the Executive's
willful refusal to obey or perform lawful resolutions of the Board of
Directors of Congoleum, consistent with the Executive's position and
reflected in approved minutes thereof after written notice and reasonable
opportunity to cure; (iv) the Executive's chronic absenteeism after
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written notice and reasonable opportunity to be heard; (v) the Executive's
chronic alcoholism or other form of substance addiction after, written
notice and reasonable opportunity to be heard; or (vi) the Executive's
willful and material breach of his duties and obligations, after written
notice and reasonable opportunity to cure. In any event, upon termination
of either Executive for Cause, the Board of Directors of Congoleum shall
give him written notice thereof specifying the grounds for such
termination, and such Executive shall be afforded the opportunity to be
heard, together with his counsel, at a meeting of the Board of Directors
of Congoleum, to appeal such termination."
3. Amendment of Section 3. Clauses (a) and (b) of Section 3 of the
Personal Services Agreement are hereby amended to read in full as follows:
"(a) Personal Services Fee. For its agreement to permit the
Executives to provide personal services to Congoleum hereunder, Congoleum
shall pay ABI a personal services fee of $500,000 per year, payable by
Congoleum in equal monthly installments after receipt by Congoleum of an
invoice for the same from ABI. Upon the termination of this Agreement with
respect to a particular Executive as provided in Section 2 above, the
personal services fee shall be reduced to $300,000 per year (if the
terminated Executive is Xxxxxxx X. Xxxxxx) or $200,000 per year (if the
terminated Executive is Xxxxx X. Xxxxxx), in each case from and after the
effective date of such termination. The personal services fee shall be
subject to annual review by the parties, but any such review shall not in
any case result in a decrease in the amount of such personal services fee.
The personal services fee shall be increased commencing at the beginning
of each calendar year by a percentage amount, determined by a majority of
the disinterested members of the Board of Directors in good faith, equal
to the increase in the consumer price index in the New York metropolitan
area for the immediately preceding year.
(b) Incentive Fees. Congoleum shall pay ABI an annual incentive fee,
subject to the attainment by Congoleum of certain business and financial
objectives, as determined by a majority of the disinterested members of
the Board of Directors of Congoleum. The maximum amount of the incentive
fee payable to ABI under this Section 3 (b) (if all stated objectives are
attained) shall be limited to $500,000."
4. Ratification. Each of ABI and Congoleum hereby ratifies and confirms
all of the terms and provisions of the Personal Services Agreement, as amended
hereby.
5. Counterparts. This Amendment to Personal Services Agreement may be
executed in one or more counterparts, each of which shall be an original but all
of which shall collectively constitute a single instrument.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment to Personal Services Agreement as of the date first above written.
AMERICAN BILTRITE INC.
By:
---------------------------------
/s/ Xxxxx X. Xxxxxx
Title: Chief Executive Officer
CONGOLEUM CORPORATION
BY:
---------------------------------
/s/ X. X. Xxxxx
Title: Sr. Vice President-Finance
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SECOND AMENDMENT TO PERSONAL SERVICES AGREEMENT
THIS SECOND AMENDMENT TO PERSONAL SERVICES AGREEMENT, dated as of November
15, 1996, by and between American Biltrite Inc., a Delaware corporation ("ABI")
and Congoleum Corporation, a Delaware corporation ("Congoleum");
W I T N E S S E T H:
THAT WHEREAS, ABI and Congoleum are parties to a Personal Services
Agreement, dated as of March 11, 1993 (the "Personal Services Agreement"), as
amended February 8, 1995, pursuant to which ABI agreed that Xxxxx X. Xxxxxx
would serve as the Chief Executive Officer of Congoleum and Xxxxxxx X. Xxxxxx
would serve as the Vice Chairman of Congoleum, subject to certain terms and
conditions set forth in the Personal Services Agreement;
NOW, THEREFORE, in consideration of the agreements set forth herein and
the transactions contemplated by the Plan and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Amendment of Section 3. Clause (b) of Section 3 of the Personal
Services Agreement is hereby amended to read in full as follows:
(b) Incentive Fees. Congoleum shall pay ABI an annual incentive fee
as determined by a majority of the disinterested members of the Board of
Directors.
4. Ratification. Each of ABI and Congoleum hereby ratifies and confirms
all of the terms and provisions of the Personal Services Agreement, as amended
hereby.
5. Counterparts. This Amendment to Personal Services Agreement may be
executed in one or more counterparts, each of which shall be an original but all
of which shall collectively constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment to Personal Services Agreement as of the date first above written.
AMERICAN BILTRITE INC. CONGOLEUM CORPORATION
------------------------------ ---------------------------------
By: /s/ Xxxxx X. Xxxxxx By: /s/ X. X. Xxxxx
Title: Chief Executive Officer Title: Sr. Vice President-Finance
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THIRD AMENDMENT TO PERSONAL SERVICES AGREEMENT
THIS THIRD AMENDMENT TO PERSONAL SERVICES AGREEMENT, dated as of March 10,
1998, by and between American Biltrite Inc., a Delaware corporation ("ABI") and
Congoleum Corporation, a Delaware corporation ("Congoleum");
W I T N E S S E T H
THAT WHEREAS, ABI and Congoleum are parties to a Personal Services
Agreement, dated as of March 11, 1993 (the "Personal Services Agreement"), as
amended February 8, 1995 and November 15, 1996, pursuant to which ABI agreed
that Xxxxx X. Xxxxxx would serve as the Chief Executive Officer of Congoleum and
Xxxxxxx X. Xxxxxx would serve as the Vice Chairman of Congoleum, subject to
certain terms and conditions set forth in the Personal Services Agreement:
NOW, THEREFORE, in consideration of the agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Extension of Term: The term of the Personal Services Agreement is
renewed for a five-year period beginning on March 11, 1998.
2. Ratification. Each of ABI and Congoleum hereby ratifies and confirms
all of the terms and provisions of the Personal Services Agreement, as amended
hereby.
3. Counterparts. This Amendment to Personal Services Agreement may be
executed in one or more counterparts, each of which shall be an original but all
of which shall collectively constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment to Personal Services Agreement as of the date first above written.
AMERICAN BILTRITE INC. CONGOLEUM CORPORATION
------------------------------ ---------------------------------
By: /s/ X. X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
Title: Chief Executive Officer Title: Sr. Vice President-Finance
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FOURTH AMENDMENT TO PERSONAL SERVICES AGREEMENT
THIS FOURTH AMENDMENT TO PERSONAL SERVICES AGREEMENT, dated as of November
7, 2002 by and between American Biltrite Inc., a Delaware corporation ("ABI")
and Congoleum Corporation a Delaware corporation ("Congoleum");
WITNESSETH:
THAT WHEREAS, ABI and Congoleum are parties to a Personal Services
Agreement, dated as of March 11, 1993 (the "Personal Services Agreement"), as
amended February 8, 1995, November 15, 1996, and March 10, 1998, pursuant to
which ABI agreed that Xxxxx X. Xxxxxx would serve as the Chief Executive Officer
of Congoleum and Xxxxxxx X. Xxxxxx would serve as the Vice Chairman of
Congoleum, subject to certain terms and conditions set forth in the Personal
Services Agreement;
NOW, THEREFORE, in consideration of the agreement set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Extension of Term. The term of the Personal Services Agreement is
renewed for a five-year period ending on March 10, 2008.
2. Ratification. Each of ABI and Congoleum hereby ratifies and confirms
all of the terms and provisions of the Personal Services Agreement,
as amended hereby.
3. Counterparts. This Amendment to Personal Agreement may be executed
in one or more counterparts, each of which shall be an original but
all of which shall collectively constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
amendment to Personal Services Agreement as of the date first above written.
AMERICAN BILTRITE, INC. CONGOLEUM CORPORATION
By: By:
------------------------ ------------------------------
/s/ Xxxxxxx X. Xxxxxx /s/ X. X. Xxxxx
Title: President Title: Chief Financial Officer
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