-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PdbyB6PlI/sCqRUgMXfBIAGQiMM6FD0TvkYEt5VLbM3DmabI9eEhEI4yliSEkxUj EmqE/T/6V4x/ZEL1TxopBg== 0000908662-99-000089.txt : 19990416 0000908662-99-000089.hdr.sgml : 19990416 ACCESSION NUMBER: 0000908662-99-000089 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990401 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BACOU USA INC CENTRAL INDEX KEY: 0001006027 STANDARD INDUSTRIAL CLASSIFICATION: OPHTHALMIC GOODS [3851] IRS NUMBER: 050470688 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14311 FILM NUMBER: 99594802 BUSINESS ADDRESS: STREET 1: 10 THURBER BLVD CITY: SMITHFIELD STATE: RI ZIP: 02917 BUSINESS PHONE: 4012330333 MAIL ADDRESS: STREET 1: 10 THURBER CITY: SMITHFIELD STATE: RI ZIP: 02917 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): April 1, 1999 --------------------------------------------------------------- BACOU USA, INC. --------------- (Exact name of registrant as specified in its charter) DELAWARE -------- (State or other jurisdiction of incorporation) 0-28040 05-0470688 ---------------------------------------- (Commission file number) (IRS Employer Identification Number) 10 Thurber Boulevard, Smithfield, RI 02917 ------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 401-233-0333 ---------------------------------------------------------------- Item 2. Acquisition or Disposition Events (a) On April 1, 1999, Bacou USA, Inc. consummated its acquisition of the assets of Perfect Fit Glove Co., Inc., SCHAS Circular Industries, Inc., X-Pert Industrial Products Limited, Perfect Industrial Products, Inc. and Yadkin Leasing Company, Inc. (collectively, "Perfect Fit"), manufacturers and distributors of protective gloves and other related products, as well as related assets owned by Frank A. Stucke and Joseph P. Hoerner. Bacou issued a Press Release announcing the closing of this acquisition on April 5, 1999, which Press Release is attached hereto as Exhibit 99. Perfect Fit manufactures the components of its gloves in a leased facility in Wilkesboro, North Carolina, with assembly and distribution from its owned facility near Buffalo, New York. The assets acquired included physical property, intellectual property and working capital. Bacou intends to continue the use of such assets for the purpose of manufacturing and distributing protective gloves and other related products. Bacou acquired the assets of Perfect Fit for a purchase price of $37.8 million in cash plus the assumption of approximately $16.0 million of the sellers' balance sheet liabilities. In addition, Bacou has agreed to pay an additional earnout of up to $6.0 million to the extent actual consolidated cash flow of the acquired businesses for 1999 exceeds specified targets. In connection with the acquisition, Bacou entered into employment agreements with four of the key executives of Perfect Fit, including Messrs. Stucke and Hoerner. Bacou financed this acquisition by a seven-year term loan from Banque Nationale de Paris at an interest rate per annum equal to three-month LIBOR plus approximately 0.5%. Item 7. Financial Statements and Exhibits Item 601 Exhibit Exhibit Title ------- ------------- Exhibit 2.1 Asset Purchase Agreement dated February 24, 1999 among Bacou USA Safety, Inc. and Perfect Fit Glove Co., Inc., SCHAS Circular Industries, Inc., X-Pert Industrial Products Limited, Perfect Industrial Products, Inc., Yadkin Leasing Company, Inc., Frank A. Stucke, Joseph P. Hoerner and Edward Mesanovic (incorporated by reference to Exhibit 2.12 of the Corporation's Form 10-K for the fiscal year ended December 31, 1998) Exhibit 2.2 Amendment to Asset Purchase Agreement dated March 26, 1999 Exhibit 4.1 Credit Line Agreement between Banque Nationale de Paris and Bacou USA, Inc. dated March 25, 1999 Exhibit 10.1* Employment Agreement dated as of April 1, 1999 between Bacou USA Acquisition Corp. and Frank A. Stucke Exhibit 10.2* Employment Agreement dated as of April 1, 1999 between Bacou USA Acquisition Corp. and Joseph P. Hoerner Exhibit 99 Press Release dated April 5, 1999 - ----------------- * Management contract or compensatory plan or arrangement. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BACOU USA, INC. Registrant By: /s/ Philip B. Barr ---------------------------------------- Philip B. Barr Executive Vice President, Chief Operating Officer, Chief Financial Officer and Secretary Dated: April 1, 1999 EX-2 2 EXHIBIT 2.2 Exhibit 2.2 AMENDMENT TO ASSET PURCHASE AGREEMENT THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (the "Amendment") is made and entered into as of March 26, 1999 by and among Perfect Fit Glove Co., Inc., a New York corporation ("PFG"), SCHAS Circular Industries, Inc., a North Carolina corporation ("SCHAS"), X-Pert Industrial Products Limited, a New York corporation ("X-Pert"), Perfect Industrial Products, Inc., a New York corporation ("PIP"), Yadkin Leasing Company, Inc., a North Carolina corporation ("Yadkin"), Frank A. Stucke, an individual residing in West Seneca, New York ("Stucke"), Joseph P. Hoerner, an individual residing in Orchard Park, New York ("Hoerner"), and Edward Mesanovic, an individual residing in Tonawanda, New York ("Mesanovic") (PFG, SCHAS, X-Pert, PIP, Yadkin, Stucke, Hoerner and Mesanovic collectively referred to herein as "Selling Group") and Bacou USA Safety, Inc., a Delaware corporation ("Bacou Safety"), Bacou USA Transaction, Inc., a Delaware corporation ("Bacou Transaction") and Bacou USA Acquisition Corp., a Delaware corporation (Bacou Transaction and Bacou Acquisition sometimes collectively referred to herein as "Purchaser"). WHEREAS, Selling Group and Bacou Safety entered into an Asset Purchase Agreement dated as of February 24, 1999 (the "Purchase Agreement") according to which Selling Group agreed to sell substantially all of its assets to Bacou Safety and Bacou Safety agreed to assume substantially all of the liabilities of Selling Group and to pay other consideration as set forth in the Purchase Agreement; and WHEREAS, the parties desire to amend the Purchase Agreement to provide that Bacou Transaction and Bacou Acquisition serve as Purchaser in place of Bacou Safety and to make other changes thereto, as set forth herein. NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein set forth and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Bacou Transaction and Bacou Acquisition shall be defined as the Purchaser in the Purchase Agreement in place of Bacou Safety. 2. Bacou Transaction shall purchase substantially all of the assets and assume substantially all of the liabilities of SCHAS and Yadkin pursuant to the Purchase Agreement. 3. Bacou Acquisition shall purchase substantially all of the assets and assume substantially all of the liabilities of PFG, X-Pert and PIP pursuant to the Purchase Agreement. 4. The parties hereto shall enter into an Assignment and Assumption Agreement, the form of which is attached hereto as Exhibit A, to effectuate the assignment and assumption transaction contemplated herein. 5. Notwithstanding the assignment and assumption transaction contemplated herein, Bacou Safety shall remain liable for any and all of its obligations under the Purchase Agreement. 6. Such other minor and technical amendments to the Purchase Agreement as set forth on Exhibit B hereto are hereby agreed to by the parties. IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to Asset Purchase Agreement to be executed by its duly authorized representative as of the day and year first above written. SELLING GROUP: PERFECT FIT GLOVE CO., INC. By: /s/ Joseph P. Hoerner ------------------------------- Joseph P. Hoerner, President By: /s/ Frank A. Stucke ------------------------------- Frank A. Stucke, Vice President SCHAS CIRCULAR INDUSTRIES, INC. By: /s/ Joseph P. Hoerner ------------------------------- Joseph P. Hoerner, President By: /s/ Frank A. Stucke -------------------------------- Frank A. Stucke, Vice President X-PERT INDUSTRIAL PRODUCTS LIMITED By: /s/ Frank A. Stucke ------------------------------- Frank A. Stucke, President By: /s/ Joseph P. Hoerner ------------------------------- Joseph P. Hoerner, Vice President PERFECT INDUSTRIAL PRODUCTS, INC. By: /s/ Edward Mesanovic ------------------------------- Edward Mesanovic, President and Secretary YADKIN LEASING COMPANY, INC. By: /s/ Frank A. Stucke ------------------------------- Frank A. Stucke, President By: /s/ Joseph P. Hoerner ------------------------------- Joseph P. Hoerner, Vice President /s/ Frank A. Stucke ------------------------------- Frank A. Stucke, Individually /s/ Joseph P. Hoerner ------------------------------- Joseph P. Hoerner, Individually /s/ Edward Mesanovic ------------------------------- Edward Mesanovic, Individually BACOU SAFETY: BACOU USA SAFETY, INC. By: /s/ Walter Stepan ------------------------------- Walter Stepan, Chairman, President and CEO By: /s/ Philip B. Barr -------------------------------- Philip B. Barr, Vice Chairman, Secretary and Treasurer PURCHASER: BACOU USA TRANSACTION, INC. By: /s/ Walter Stepan ------------------------------- Walter Stepan, Chairman and President By: /s/ Philip B. Barr ------------------------------- Philip B. Barr, Secretary and Treasurer BACOU USA ACQUISITION CORP. By: /s/ Walter Stepan ------------------------------- Walter Stepan, Chairman and President By: /s/ Philip B. Barr ------------------------------- Philip B. Barr, Secretary and Treasurer EX-4 3 EXHIBIT 4.1 Exhibit 4.1 CREDIT LINE The present Credit Line ("Credit Line") is signed in RHODE ISLAND on 25 March 1999, between BANQUE NATIONALE DE PARIS, a public company (societe anonyme) under French law with a capital of EUR 873,955,200, whose registered offices are located at 16 boulevard des Italiens - 75009 Paris, entered on the Paris Corporate Register under number B 662 042 449, represented by Mr. Jean LOMBARD, Directeur du Departement Entreprises du Groupe d'Agences de DROME-ARDECHE, referred to hereinafter as "BNP" or "BANK" AND BACOU USA INC., a corporation organized and existing under the law of Delaware with its principal office at 10 Thurber Boulevard, Smithfield, RI 02917 USA, represented by Mr. Walter STEPAN, Vice-Chairman, President and CEO, and Mr. Philip B. BARR Jr., Executive Vice-President and Chief Financial Officer, referred to hereinafter as "BACOU USA" or "Borrower" PREAMBLE Under the terms of negotiations carried out between BACOU USA and BNP, BNP declared that it is prepared, to grant BACOU USA a credit line of USD 50,000,000 (fifty million American dollars) under the terms and conditions set forth below. IN WITNESS WHEREOF, IT IS AGREED AND DECIDED AS FOLLOWS BETWEEN THE PARTIES TO THE PRESENT ARTICLE I - AMOUNT OF THE CREDIT LINE BNP grants BACOU USA a credit line (referred to hereinafter as the "Credit Line") for an amount of USD 50,000,000 (fifty million American dollars). ARTICLE II - OBJECT OF THE CREDIT LINE The object of the Credit Line is the financing of the acquisition of the operating assets of Perfect Fit Glove Co., Inc. of Buffalo, New York, USA, SCHAS Circular Industries, Inc. of Wilkesboro, North Carolina, USA and certain affiliated companies and assets related to the business of manufacturing and selling work gloves, subject to existing liabilities, by BACOU USA. ARTICLE III - TERM OF THE CREDIT LINE The Credit Line is granted for a term of seven years starting from the drawing date as defined in article V hereafter. ARTICLE IV - REPAYMENT The Credit Line shall be repaid quarterly as from the drawing date in twenty seven installments of USD 1,785,700 (One million seven hundred eighty five thousand seven hundred American dollars) and a final installment of USD 1,786,100 (One million seven hundred eighty six thousand one hundred American dollars) At all events, the Credit Line shall be repaid in full no later than the last banking day of the term defined in article III above. A banking day is defined for the needs of the present agreement as a business day. A business day is a day on which dealings in USD are carried on in the Paris Interbank Market, in London and in New York, and BNP is open for domestic and foreign exchange business in Paris and wherever applicable, in financial centers required to be open to permit dealings in connection with this agreement. ARTICLE V - TERMS AND CONDITIONS OF DRAWING The Credit Line shall be drawable fully in one time during a period of twenty days following the date of signature of the present Agreement, with a prior notice of two banking days, through the debit of a special account constituting a simple book statement that will have no legal effects attached to the current account and which shall be opened for this purpose on the books of the BNP VALENCE agency. The drawing date means in the present Agreement the date of the debit of such special account. Such prior notice shall reach BNP no later than 10:00 a.m. (London time) in accordance with the form fixed in Appendix 1 to the present agreement. ARTICLE VI - FINANCIAL TERMS AND CONDITIONS Interest period shall be three months, calculated as from the drawing date. BACOU USA shall due and pay interest to BNP on the last banking day of each such periods of three months. a) Rate of interest: Interest shall be calculated on the exact number of days of the period considered based on 360 days per year at the LIBOR rate (London Interbank Offered Rate) of the USD considered for a period of three months, calculated under the aegis of the British Bankers Association and published by Telerate -- page 3750/3740 or by any other page that might be substituted for it - at 11:00 a.m. (London time), two working days prior to the drawing date or the beginning of an interest period, increased by 0,35 % per year. The rate shall be revised at each interest period. BNP shall notify BACOU USA of the interest rate applicable to each three months interest period. b) Interest on arrears: All sums (including any cost or expenses) not paid on their normal or early due date shall bear interest ipso jure from the day of the said due date included to the day of its full payment excluded at the interest rate applicable as defined above, increased by 1% per year. Interest shall be capitalized if it is due for a full year in application of article 1154 of the Civil Code. These provisions do not apply as the granting of a delay in payment. c) Impossibility of determining the rate of interest: If determination of a rate of interest has become impossible following certain events, BNP shall notify BACOU USA thereof and the parties shall enter into negotiation. If an agreement in view of reaching a solution is not reached within thirty days of the said notification, BACOU USA shall repay the Credit Line in capital, interest, expenses, incidental expenses and possible costs, its being understood that the applicable rate of interest shall be BNP's cost of financing, increased by 1% per year. d) Unavailability of USD: If BNP should observe, either on the occasion of the drawing or on the occasion of a new interest period, that the USD currency is unavailable, it shall advise BACOU USA thereof as rapidly as possible. BACOU USA and BNP shall consult in order to select a replacement currency. Failing agreement within 24 hours of the notice sent to BACOU USA by fax, the Credit Line is considered cancelled ipso jure, and BACOU USA shall repay and pay in FRF or in the single European currency the capital, interest, expenses, commissions and incidental expenses and any possible costs caused to BNP by the unavailability of the currency used. The amount in FRF or in the single European currency being repaid and paid shall be determined in accordance with the most recent quotation of the USD against the FRF or the single European currency. e) Commitment fee 0,25 % per year payable quarterly in advance and calculated starting from the drawing date. It shall be calculated on the basis of a year of 360 days and payable in USD. f) Flat fee 0,08 % payable on the drawing date. g) BACOU USA shall pay a sum of USD 9.200 for file costs on the drawing date. ARTICLE VII - CONDITIONS PRECEDENT No drawing will be made before payment by BACOU USA of all sums, fees and expenses which could be due on the date of such drawing pursuant to this Agreement and receipt by BNP in a form and substance satisfactory to it of the following documents: a) a certified copy of all corporate documents of BACOU USA and of the Guarantor required to authorize the execution of this Agreement and the Guarantee and to empower their representatives for this purpose; b) duly authenticated specimen signatures of each of the empowered representatives of BACOU USA and of the Guarantor, c) a certified copy of the constitutive documents of BACOU USA, d) the Guarantee and evidence it has been duly executed and is in full force and effect; e) an opinion of a legal counsel from the State of Rhode Island in the terms of the Appendix 2 acceptable to BNP and confirming that the representations of BACOU USA made in article VIII are true. ARTICLE VIII - REPRESENTATIONS AND WARRANTIES BACOU USA represents and warrants to BNP that: - -- (i) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Rhode Island, - -- (ii) the execution and performance of this Agreement do not contravene any provision of law or regulation to which BACOU USA is subject, - -- (iii) it has obtained all necessary consents, licenses or authorizations for the execution and performance of this Agreement and especially it has been authorized to acquire and transfer on maturity the necessary currencies for payment of all sums due under this Agreement.; - -- (iv) its capital stock is held of 71,70% by the Guarantor, - -- (v) no tax, registration fee, stamp or similar duty, nor any deposit or any registration is required in connection with this Agreement or for validity of the same, - -- (vi) no proceedings are underway or, to the knowledge of BACOU USA, are about to be instituted to prevent or forbid signature or performance of the Credit Line, or which might have a significant unfavorable effect on the capacity of BACOU USA to perform its obligations under the present Credit Line; - -- (vii) no action is underway for the purposes of liquidation, dissolution or any other similar procedure with regard to BACOU USA; - -- (viii) there exists no fact that is likely to constitute a Case of Default; - -- (ix) the choice of French law and the competence of the French courts provided for in article XIV below are legitimately binding on BACOU USA and shall be validly acknowledged by the courts of the State of Rhode Islands and the Federal Courts of the United States of America, and consequently any or all judgments handed down by the French Courts shall be exequatured and enforceable in United States of America. The representations and warranties contained in the present article shall be considered renewed by BACOU USA at the time of request for drawing. ARTICLE IX - COVENANTS BY BACOU USA So long as it is a debtor or may remain a debtor pursuant to the Credit Line, BACOU USA undertakes: - -- to hand over to BNP all accounting documents and data that BNP might request; - -- to immediately inform BNP of all facts that might significantly lessen its assets or significantly increase the volume of its commitments; - -- to immediately inform BNP of all facts or circumstances that are likely to constitute or become one of the cases mentioned in the article CASES OF DEFAULT; - -- to assume the financial consequences of changes in parity which might intervene up to the time of full repayment of the Credit line. ARTICLE X - NEGATIVE COVENANTS BY BACOU USA Until payment in full of all of BACOU's USA obligations to BNP under this Agreement, BACOU USA covenants and agrees as follows: 1 - Limitation on Borrowing BACOU USA shall not incur, create, assume or permit to exist any Debt or liability on account of deposits or advances or any indebtedness or liability for borrowed money, or any indebtedness or liability evidenced by any notes, bonds, debentures or similar obligations, including leases, except (a) Debt to BNP (b) Debt existing as of the date of the closing of Credit Line and approved in writing by BNP, including up to a total of USD 31,000,000 to CITIZENS BANK OF RI under its line of credit to BACOU USA and a total of USD 6,325,000 under an industrial revenue bond to the Wilkes County Industrial Facilities and Pollution Control Financing Authority to be assumed at closing of the acquisition of SCHAS Circular Industries, Inc. c) Debt pertaining to any capitalized lease obligations provided such Debt when combined with all other capitalized lease obligation does not exceed in the aggregate One Million Dollars per annum (d) Debt the terms and conditions of which have been approved in writing by BNP and which Debt is subordinated, if required by BNP, to the prior payment of all amounts due under the Credit Line, and (e) trade obligations incurred by BACOU USA in the ordinary course of business. 2 - Limitation on Encumbrances BACOU USA shall not create, incur, make, assume, or suffer to exist, after the date hereof, any assignment, mortgage, pledge, security interest, lien or other encumbrance of or upon any of its properties or assets, whether now owned or hereafter acquired, to any party other than BNP, excepting (a) liens for taxes not delinquent or being contested in good faith by appropriate proceedings diligently pressed and as to which there have been set aside on its books adequate reserves; (b) encumbrances existing as of the date hereof, disclosed in writing to BNP and approved by BNP in writing, (c) liens imposed by operation of law, such as warehouseman's or mechanics' liens, incurred by BACOU USA in good faith and in the ordinary course of business: and (d) liens securing Debt permitted under the 1 (Limitation on Borrowing). ARTICLE XI - CASES OF DEFAULT The following constitutes a Case of Default once it occurs and whatever the reason, be it attributable to BACOU USA or not: - -- non-payment at its due date of an amount due in principal, interest, commission, expenses or incidental expenses by BACOU USA in performance of the Credit Line, should it not be remedied within five days following the request made by BNP in this sense to BACOU USA; - -- non-compliance by BACOU USA with another commitment or covenant under the terms of the Credit Line; - -- any representation by BACOU USA contained in article VIII of the Credit Line or subsequently renewed proving to be inaccurate; - -- any debt of BACOU USA or the GUARANTOR under another contract becoming repayable or callable prior to its normal due date following a foreclosure of the date for payment opposed due to default; - -- any measure taken with regard to BACOU USA or the GUARANTOR for out-of-court settlement, court-ordered re-organization, court-order redress or court-ordered liquidation or any other analogous measure or proceedings, with the exception of cases of liquidation or dissolution of BACOU USA the terms and conditions of which have been approved by BNP; - -- significative change, in the opinion of BNP, in the shareholding of BACOU USA, including nationalization of BACOU USA; - -- the occurrence of an unlawful act for BACOU USA in performing any one of its obligations under the Credit Line; - -- the occurrence of any decision or event in United States of America or in another country through which the payments are made, that constitutes or could constitute an obstacle to payment by BACOU USA of any amount due to BNP under the present Credit Line, including decisions on foreign exchange control or embargo, - -- the Guarantee specified in article XVI ceases to be valid or becomes unforceable for any reason whatsoever, At the time of the occurrence of any one of the Cases of Default, BNP shall be entitled to pronounce immediate early repayment and payment of all sums under the Credit Line. ARTICLE XII - ELECTION OF DOMICILE For performance of the present agreement and of its consequences, domicile is elected: - -- for BACOU USA, at its principal office address, 10 Thurber Boulevard, Smithfield, RI, 02917 USA. - -- for BNP, at its VALENCE agency, address 1 Boulevard Bancel, 26000 VALENCE, FRANCE, Fax 04.75.79.43.09. ARTICLE XIII - NEW CIRCUMSTANCES 1 The provisions of the Credit Line have been fixed in accordance with the economic and financial conditions, both national and international, and with the legal, fiscal, monetary and professional conditions in force at the time of the signature of the Credit Line in France and abroad. 2 In the event of modification to the said conditions or facts or to their interpretation by any competent authority, or for any other reason, resulting particularly in new charges or in additional costs for BNP subsequent in particular: (a) to new requirements in the area of reserve requirements, quantitative regulations on credit, institution or increase in coefficients for liquidities, equity capital or other requirements relating to all or part of the assets or commitments (including off-balance-sheet commitments), or; (b) to a modification in exchange regulations or in the applicable tax system; BACOU USA undertakes to compensate BNP in full for the additional charges and costs that might be imposed on it. Notification by BNP justifying in any form whatsoever the said charges and costs shall be final and binding, barring error proved by BACOU USA. In such a case, however, BACOU USA shall also have the option of making early payment of the Credit Line in full. ARTICLE XIV - APPLICABLE LAW AND COMPETENT JURISDICTION The present Credit Line Agreement is governed by French law. In the event of dispute, BACOU USA and BNP shall consult in view of an out-of-court settlement. In the failure to reach such a settlement, all litigation relative inter alia to the validity, interpretation or performance of the Credit Line shall be submitted to the exclusive competence of the French courts. ARTICLE XV - MISCELLANEOUS PROVISIONS 1 - Expenses, taxes and duties. BACOU USA shall bear all expenses, duties, commissions, interest or other levies pertaining to the present Credit Line or those that might be the sequel or consequence thereof. In particular, BACOU USA shall cover BNP for all of its expenses and outlays, legal fees included, made in connection with the performance of the Credit Line and with the implementation of BNP's rights under the Credit Line upon presentation of supporting documents. If, through the application of a law, an international agreement or a regulation of any kind, BACOU USA is required to carry out a withholding on payments to be made pursuant to the present agreement, it shall pay BNP an additional amount such that, following deduction of the tax, BNP shall receive the full amounts due that it would have received if the withholding had not existed. 2 - Effective Global Rate (<< Taux Effectif Global >> under French law). The effective global rate is calculated below on the date of 1999/03/16 for USD and for a period of three months. It is specified that, on the basis of the three-month LIBOR rate for the USD (5,00 % at the date of 1999/03/16), taking into account fees, expenses and margin, and on the basis of use for 360 days, full use of the said Credit Line as of the date of 1999/03/16 would come to an effective global rate of 5,6294%. 3 - Payments. All obligations of payment under the Credit Line, shall be paid in full by BACOU USA by means of payments in USD to the BNP at its address referred to in article << ELECTION OF DOMICILE >>. All payments by BACOU USA under this Agreement shall be made without set off or counter claims. BACOU USA shall not be entitled to subordinate such payments to any condition or exception. BACOU USA hereby authorizes BNP, at its convenience, to debit its account in USD n(degree) 140 003/52 held on the BNP's books, for the said payments on the date upon which the said payments are payable for their amount in USD. 4 - Voluntary prepayment. No new drawings. BACOU USA shall be entitled to prepay in full or partially without penalty the Credit Line, but only on the date of the repayment of an installment hereinabove, subject to the receipt by BNP of a prior written notice at least one month before the expected prepayment date. Once repaid or prepaid, BACOU USA shall not be permitted to redraw any sum under the Credit Line. ARTICLE XVI - GUARANTEE The BACOU's USA payment obligations hereunder shall be guaranteed by BACOU SA herein called <> a French company, whose registered office is at VALENCE (26000-France), 168 Avenue des Aureats, entered on the Valence Corporate Register under number B 348 982 307, in the terms of the Appendix 3 hereto. Signed in RHODE ISLAND, on 25 March 1999 In two true copies BACOU USA INC. Banque Nationale de Paris EX-10 4 EXHIBIT 10.1 EMPLOYMENT AGREEMENT THIS AGREEMENT made as of this 1st day of April, 1999, by and Frank A. Stucke ("Executive"), currently residing at 36 Pine Tree Lane, West Seneca, New York 14224, and Perfect Fit Glove Co., Inc., f/k/a Bacou USA Acquisition Corp., a corporation organized under the laws of Delaware (the "Company"), with its principal offices at 10 Thurber Boulevard, Smithfield, RI 02917. W I T N E S S E T H : WHEREAS, Company wishes to secure the services of Executive as the Executive Vice President of the Company and as Executive Vice President of SCHAS Industries, Inc., an affiliate of the Company, for the period provided in this Agreement; and WHEREAS, Executive is willing to enter into this Agreement for such period and on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual promises herein contained, Company and Executive hereby agree as follows: 1. Employment. During the period of employment set forth in Section 2 of this Agreement, Company shall employ Executive, and Executive shall serve as the Executive Vice President of the Company and as Executive Vice President of SCHAS Industries, Inc., reporting to the Chairman, President and CEO of Bacou USA Safety, Inc. Executive agrees to faithfully perform the duties assigned to him to the best of his ability and, except for vacations and periods of temporary illness, to devote his full time and attention to the business of Company. Ancillary employment such as writing, teaching or lecturing, as well as the acceptance of honorific titles may be undertaken by the Executive only with the approval of the Chief Executive Officer of Bacou USA, Inc. ("Bacou") or his designee ("Chairman"). Executive also agrees that he will not engage in any other business activities without the prior approval of the Chairman. Executive may only serve as an officer, director, trustee or committee member, or in any similar position, of a reasonable number (maximum two) of trade associations and religious, charitable, educational, civic or other non-business organizations, subject to the approval of the Chairman. The Executive represents and warrants to Company that he is now under no contract or agreement nor will he execute any contract or agreement that will in any manner interfere, conflict with or prevent him from performing his duties under the terms and conditions of this Agreement, recognizing that his performance hereunder will require the devotion of his full time and attention during and beyond regular business hours during the Term (as hereinafter defined), including extensive travel. 2. Period of Employment. The Executive's employment under this Agreement shall initially cover the period beginning April 1, 1999 to December 31, 2004 (the "Initial Term"). On January 1, 2004, and at the end of each year thereafter, the period of employment shall be automatically extended, without further action by either party, for successive one year periods (each a "Renewal Term") unless at least six months prior to the end of any Term either party shall have served written notice on the other of its election to allow this Agreement to terminate at the end of such Term. The Initial Term and any Renewal Terms are hereinafter sometimes collectively referred to as the "Term." If either party notifies the other party that it shall not extend the period of employment pursuant to the provisions of the preceding paragraph, Company may, at its option, decide that the Executive shall take a leave-of-absence for part or all of the remaining time of his employment, continuing to receive all compensation as if actively working. Notwithstanding anything to the contrary in this Section 2, Executive may, at his option, terminate the period of his employment under this Agreement by providing a one-time notice to the Company on or before June 30, 2000 that his Initial Term of employment shall end as of December 31, 2000. If such notice is duly provided by Executive, then his period of employment under this Agreement shall terminate as of such time and all obligations of the parties hereunder, except for those set forth in Sections 6, 7 and 8 hereof, shall no longer be in effect. 3. Termination. The period of employment shall be terminated upon the first to occur of the following: (i) The expiration of the period of employment pursuant to Section 2 of this agreement. (ii) The Executive's death. (iii) The Executive becoming permanently disabled. Permanent disability shall mean physical or mental incapacity of a nature which prevents Executive from performing his duties under this Agreement for a period of more than six months in any twelve month period. (iv) The Executive's employment being terminated by Company for cause. Termination for cause shall mean termination by action of the Board of Directors of Company because of any of the following: (a) the willful failure of Executive to perform his duties and obligations under this Agreement; (b) the failure to abide by, or to execute in a reasonable and responsible manner, the policies and procedures of the Company as in effect from time to time; (c) gross negligence in the performance of his duties under this Agreement; (d) the commission by Executive of a felony; (e) engaging in any activity that is competitive with the business of the Company; or (f) engaging in fraudulent, unethical or dishonest activities. 4. Compensation and Benefits. (a) The Executive shall receive regular compensation (the "Base Salary") at the initial rate of One Hundred Fifty Thousand Dollars ($150,000.00) per annum during the Initial Term. The Base Salary shall be payable in arrears less the usual payroll deductions at the same times and in the same manner as salaries paid to other employees of the Company. The Executive shall participate in any wage increases applicable generally to salaried employees of Company. The Base Salary prevailing at any time shall be reviewed annually for a possible increase beginning in January 2000. (b) In addition to the Base Salary, the Executive shall be entitled to receive annual incentive compensation payments ("Incentive Compensation") for 1999 based on a formula set forth on Exhibit A hereto. For years thereafter, the Executive shall be entitled to receive Incentive Compensation at such times and in such amounts as may be determined pursuant to the Bonus Plan for Executives of subsidiaries of Bacou USA, Inc., as in effect for the applicable year (the "Company Plan"; a copy of the Company Plan for 1999 is attached to this Agreement as Exhibit B). Executive acknowledges that, by agreeing to participate in the Company Plan for the years 2000 and beyond, he thereby waives any rights to participate in any other incentive compensation plan of the Company. (c) Incentive Compensation shall be paid by Company for each fiscal year within ten (10) days after a decision is made by the Board of Directors of Company as to the amount of such Incentive Compensation, but in any event no later than the earlier of the annual meeting of the Board of Directors of the Company or February 28 following the fiscal year for which the Incentive Compensation is paid. (d) The Executive shall be entitled to participate in any stock option plan which Bacou USA, Inc. may adopt for Company at levels to be determined by the Board of Directors of Company in its sole discretion. It is anticipated that contingent upon the closing of the Perfect Fit Glove transaction, you will be granted options to purchase 10,000 shares of the Company's Common Stock pursuant to the Company's 1996 Stock Incentive Plan at the closing price of the stock on that day. (e) The Executive shall be entitled to participate in all savings, thrift, retirement or pension, short term and long term disability, health and accident, Blue Cross/Blue Shield, Major Medical or other hospitalization, holiday, vacation, and other fringe benefit programs generally available to senior executives of Company in accordance with and subject to the terms and conditions of such programs. (f) In addition, the Executive shall be entitled to receive the following benefits: (i) The Executive shall have the use of a company car, subject to the Automobile Policy of Bacou USA, Inc., a copy of which is attached to this Agreement as Exhibit C. To the extent that you have a leased or owned vehicle in place at the beginning of the Initial Term, we shall pay you the standard amount payable pursuant to the Company's Automobile Policy until such time as the lease expires on such vehicle or you are ready or purchase another vehicle. (ii) The Executive shall be entitled to vacation pursuant to the Bacou USA, Inc. Executive Vacation Policy. Vacation days will be taken at a time convenient for both the Executive and Company. To the extent the Executive does not take all vacation days the remaining days will be carried forward for an unlimited period or be paid to the Executive at the level of his Base Salary valid for the fiscal year in which vacation days are not taken. (iii) When traveling on Company business, the Executive will be provided coach-class airfare on domestic trips; business class airfare will be provided on international trips. (iv) The Executive is authorized to incur reasonable expenses in connection with and for the promotion of the business of Company, including expenses for meals and lodging (regular hotel room, no suites), entertainment, and similar items as required from time to time by the Executive's duties. Company shall reimburse the Executive for all such expenses upon the presentation of an account therefor, together with appropriate supporting documentation. 5. Limitations on Authority. Except as otherwise provided herein, approval by the Chairman must be obtained prior to the Executive taking any of the following actions on behalf of the Company: (a) Acquisition or disposition of real property or any rights deriving therefrom, or changing title in any such real property. (b) Making unplanned capital expenditures or any commitment therefor in an amount greater than $10,000 for any individual expenditure and $50,000 in the aggregate in any fiscal year; (c) Borrowing or guaranteeing any borrowings from or on behalf of any party, or altering the terms of any loan agreements for such borrowings except for any such loans or borrowings as shall be agreed upon by the Board of Directors of Company; (d) Hiring, terminating, promoting or demoting executive personnel with annual salary in excess of $50,000 or granting unbudgeted raises, bonuses or other compensatory payments to any employee of the Company; (e) Promoting or hiring anyone to a position above the Manager level (i.e. to Director or above); (f) Granting retirement benefits or other non-earned income to any person; (g) Modification of any qualified plan or other benefit plan, e.g., health insurance; (h) Acquiring the assets or shares of any business; (i) Acquiring or disposing of the assets or shares of the Company or selling any fixed asset of the Company below book value or writing off inventory of the Company with an aggregate book value exceeding $50,000 in any fiscal year; (j) Entering into or terminating agreements of any kind or nature with a monthly financial obligation in excess of U.S. $5,000 for more than six (6) months except purchase orders for materials required for the manufacture of products for sale in the ordinary course of business; (k) Making basic changes in the administration, organization, production, and distribution of Company or any of its affiliates, as well as closing or curtailing the functions of Company or any of its affiliates; (l) Filing any lawsuit; (m) Making cash or non-cash corporate contributions above the annually budgeted amount; (n) When there is a large volume of sales, the making of decisions requiring both extraordinary risks and extraordinary expenditures; (o) Entering into any transaction on behalf of Company or its affiliates which is not in the usual course of its business; (p) Adoption or modification of the annual budget. Notwithstanding the foregoing, approval is not required for any action provided for in the approved and applicable annual budget or annual plan of Company. In addition, should the Chairman be unavailable, if an emergency arises which requires the Executive to take immediate action in which approval as set forth in this Section would otherwise be required, the Executive is no longer bound by the limitations described above and is authorized to make a decision in the best interests of Company. The Executive will immediately inform the Chairman of any such decisions made by him. 6. Non-Disclosure of Information. It is understood that the business of Company and its affiliates is of a confidential nature. During the period of the Executive's employment with Company, the Executive may have received and/or may secure confidential information concerning Company or any of Company's affiliates or subsidiaries which, if known to competitors thereof, would damage Company or its said affiliates or subsidiaries. The Executive agrees that during and after the term of this Agreement he will not (except as authorized by Company or in the proper performance of his duties or except as ordered by a court or other body of competent jurisdiction or as otherwise required by law), directly or indirectly, divulge, disclose or appropriate to his own use, or to the use of any third party, any secret, proprietary or confidential information or knowledge obtained by him during the term hereof concerning such confidential matters of Company or its subsidiaries or affiliates, including, but not limited to, information pertaining to trade secrets, systems, manuals, confidential reports, methods, processes, designs, equipment lists, operating procedures, equipment and methods used and preferred by Company's customers. Upon termination of this Agreement, the Executive shall promptly deliver to Company all materials of a secret or confidential nature relating to the business of Company or any of its subsidiaries or affiliates which are, directly or indirectly, in the possession or under the control of the Executive. The provisions of this paragraph shall continue to apply after the Executive ceases to be employed by Company for a period of seven (7) years except in respect of any information or knowledge disclosed to the public, other than through an unauthorized disclosure by the Executive. 7. Trade Secrets. The Executive covenants that he shall, while employed by Company, assign, transfer, and set over to Company or its designee all right, title and interest in and to all trade secrets, secret processes, inventions, improvements, patents, patent applications, trademarks, trademark applications, copyrights, copyright registrations, discoveries and/or other developments (hereinafter "Inventions") which he may, thereafter, alone or in conjunction with others, during or outside normal working hours, conceive, make, acquire or suggest at any time which relate to the products, processes, work, research, or other activities of Company or any of its subsidiaries or affiliates. Any and all Inventions which are of a proprietary nature and which the Executive may conceive, may acquire or suggest, either alone or in conjunction with others, during his employment with Company (whether during or outside normal working hours) relating to or in any way pertaining to or connected with Company's business, shall be the sole and exclusive property of Company or its designee and the Executive, whenever requested to do so by Company, shall, without further compensation or consideration properly execute any and all applications, assignments or other documents which Company or its designee shall deem necessary in order to apply for and obtain Letters Patent of the United States and/or comparable rights afforded by foreign countries for the Inventions, or in order to assign and convey to Company or its designee the sole and exclusive right, title and interest in and to the Inventions. This obligation shall continue beyond the termination of this Agreement with respect to Inventions conceived or made by the Executive during the term of his employment by Company, and shall be binding upon his assigns, executors, administrators, and other legal representatives. 8. Non-Competition. (a) During the term of this Agreement or any renewal thereof and, at Company's option for a period of up to five years thereafter, should the Executive's contract be terminated or not be renewed, the Executive agrees that he will not within the geographical area of the United States, engage, either directly or indirectly, individually or as an owner, partner, joint venturer, employee, officer, director, stockholder, consultant, independent contractor or lender of or to any corporation, holding Company or other business entity which is in a business similar to that of Company or any of its affiliates. In the event that Company chooses to exercise its option to prevent Executive from competing with Company following termination or non-renewal of his employment, Company shall notify Executive in writing either (i) at the time of Executive's last day of employment or (ii) at the time Company provides notice to Executive of its decision that Executive shall take a leave-of-absence, or, if Executive provides written notice to Company of his decision to terminate his employment with Company, Company shall notify Executive in writing within two (2) weeks thereafter, in any case specifying the period of up to five years following termination, resignation, or non-renewal of employment during which such competitive activity shall be prohibited. In the event Company exercises its option, Company shall pay Executive an amount equal to his annual Base Salary at the time of termination, resignation or non-renewal. Notwithstanding the foregoing, Executive (as hereinbefore described in Section 2(d)) may own five (5%) percent of the securities of any business in competition with the business of Company or any of its affiliates, which securities are regularly traded on a public exchange, provided that any such ownership shall not result in Executive becoming a record or beneficial owner at any time of more than five (5%) percent of equity securities of said business entity. (b) The Executive shall not during the term of his Employment under this Agreement or any renewal thereof, and for a period of five (5) years thereafter, employ, retain or arrange to have any other person or entity employ or retain any person who was employed by Company or any of its affiliated companies having an annual compensation of at least U.S. $50,000 per annum during the term of this Agreement or any renewal thereof. (c) If any provision of this Section is held to be unenforceable because of the scope, duration or area of its applicability or otherwise, the legal entity making that determination will have the power to modify the scope, duration or area, or all of them, and the provision will then apply in its modified form. 9. Property. All letters, memoranda, documents, business notes (including all copies thereof) and other information contained on any other computer media including computer disks and hard drives of the Executive in any manner relating to the duties of Executive under this agreement are the property of Company. 10. Notices. Any notices or other communications required to be given pursuant to this Agreement shall be in writing and shall be deemed given: (i) upon delivery, if by hand; (ii) three (3) business days after mailing, if sent by registered or certified mail, postage prepaid, return receipt requested; (iii) one (1) business day after mailing, if sent via overnight courier; or (iv) upon transmission, if sent by telex or facsimile except that if such notice or other communication is received by telex or facsimile after 5:00 p.m. on a business day at the place of receipt, it shall be effective as of the following business day. All notices and other communications hereunder shall be given as follows: (a) If to the Company, to it at: c/o Bacou USA, Inc. 10 Thurber Boulevard Smithfield, RI 02917 Attention: President Telephone No.: 401-233-0333 Telecopier No.: 401-232-2230 (b) If to the Executive, to him at: 36 Pine Tree Lane West Seneca, NY 14224 Telephone No.: ( ) Telecopier No.: ( ) Either party may change its address for receiving notice by written notice given to the other names above in the manner provided above. 11. Full and Complete Agreement; Amendment. This Agreement (together with the Exhibits attached hereto) constitutes the full and complete understanding and agreement of the parties and supersedes all prior understandings and agreements. This Agreement may be modified only by a written instrument executed by both parties (except Exhibits B and C which are subject to modification from time to time by Bacou USA, Inc.) 12. Construction. This Agreement shall be construed under the laws of the State of Rhode Island. 13. Arbitration. Notwithstanding the fact that the parties shall be entitled to equitable relief in order to enforce certain provisions hereunder (e.g., temporary restraining orders or injunctive relief), any dispute, controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled by arbitration in accordance with the "Commercial Arbitration Rules" of the American Arbitration Association in effect on the date of this Agreement, except as varied below. The site of any such arbitration shall be Providence, Rhode Island and any award shall be deemed to be a Providence, Rhode Island award. There shall be a single arbitrator who shall be admitted to practice law in Rhode Island, with no less than ten (10) years experience in the handling of commercial or corporate matters or disputes. The arbitrator shall render a written decision stating his reasons therefor, and shall render an award within six (6) months of the request for arbitration, and such award shall be final and binding upon both parties. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction in any state of the United States or country or application may be made to such court for a judicial acceptance of the award and an enforcement, as the law of such jurisdiction may require or allow. The substantive law to be applied to any case determined pursuant to this Section 13 is that of Rhode Island. The expense of arbitration shall be borne by the respective parties except to the extent that the arbitrators shall determine that the entire expense shall be borne by a single party. 14. Binding Nature. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, personal representatives, successors and assigns. IN WITNESS WHEREOF, Company and the Executive have duly executed this Agreement as of the day and year first written above. PERFECT FIT GLOVE CO., INC. EXECUTIVE By: /s/ Walter Stepan /s/ Joseph P. Hoerner ---------------------- --------------------- Name: Walter Stepan Joseph P. Hoerner Title: Chairman By: /s/ Philip B. Barr ---------------------- Name: Philip B. Barr Title: Vice Chairman EXHIBIT A |-----------------------------------------------|------------------------------| | Cash Flow Achievement | Bonus Amount | |-----------------------------------------------|------------------------------| |Below 90% of Target | $0 | |-----------------------------------------------|------------------------------| |At least 90% of Target, but less than 100% | 10% of 1999 Salary | |-----------------------------------------------|------------------------------| |At least 100% of Target, but less than 110% | 15% of 1999 Salary | |-----------------------------------------------|------------------------------| |At least 110% of Target, or above | 20% of 1999 Salary | |-----------------------------------------------|------------------------------| The Target amount shall be as set forth in Exhibit 5.05 to the Asset Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group and affiliates of Bacou USA, Inc. Agreed: Walter Stepan ------ Philip B. Barr ------ Frank A. Stucke ------ EX-10 5 EXHIBIT 10.2 EMPLOYMENT AGREEMENT THIS AGREEMENT made as of this 1st day of April, 1999, by and between Joseph P. Hoerner ("Executive"), currently residing at 5555 Armor Duells Road, Orchard Park, New York 14127, and Perfect Fit Glove Co., Inc., f/k/a Bacou USA Acquisition Corp., a corporation organized under the laws of Delaware (the "Company"), with its principal offices at 10 Thurber Boulevard, Smithfield, RI 02917. W I T N E S S E T H : WHEREAS, Company wishes to secure the services of Executive as the President of the Company and as President of SCHAS Industries, Inc., an affiliate of the Company, for the period provided in this Agreement; and WHEREAS, Executive is willing to enter into this Agreement for such period and on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual promises herein contained, Company and Executive hereby agree as follows: 1. Employment. During the period of employment set forth in Section 2 of this Agreement, Company shall employ Executive, and Executive shall serve as the President of the Company and as President of SCHAS Industries, Inc., reporting to the Chairman, President and CEO of Bacou USA Safety, Inc. Executive agrees to faithfully perform the duties assigned to him to the best of his ability and, except for vacations and periods of temporary illness, to devote his full time and attention to the business of Company. Ancillary employment such as writing, teaching or lecturing, as well as the acceptance of honorific titles may be undertaken by the Executive only with the approval of the Chief Executive Officer of Bacou USA, Inc. ("Bacou") or his designee ("Chairman"). Executive also agrees that he will not engage in any other business activities without the prior approval of the Chairman. Executive may only serve as an officer, director, trustee or committee member, or in any similar position, of a reasonable number (maximum two) of trade associations and religious, charitable, educational, civic or other non-business organizations, subject to the approval of the Chairman. The Executive represents and warrants to Company that he is now under no contract or agreement nor will he execute any contract or agreement that will in any manner interfere, conflict with or prevent him from performing his duties under the terms and conditions of this Agreement, recognizing that his performance hereunder will require the devotion of his full time and attention during and beyond regular business hours during the Term (as hereinafter defined), including extensive travel. 2. Period of Employment. The Executive's employment under this Agreement shall initially cover the period beginning April 1, 1999 to December 31, 2004 (the "Initial Term"). On January 1, 2004, and at the end of each year thereafter, the period of employment shall be automatically extended, without further action by either party, for successive one year periods (each a "Renewal Term") unless at least six months prior to the end of any Term either party shall have served written notice on the other of its election to allow this Agreement to terminate at the end of such Term. The Initial Term and any Renewal Terms are hereinafter sometimes collectively referred to as the "Term." If either party notifies the other party that it shall not extend the period of employment pursuant to the provisions of the preceding paragraph, Company may, at its option, decide that the Executive shall take a leave-of-absence for part or all of the remaining time of his employment, continuing to receive all compensation as if actively working. Notwithstanding anything to the contrary in this Section 2, Executive may, at his option, terminate the period of his employment under this Agreement by providing a one-time notice to the Company on or before June 30, 2000 that his Initial Term of employment shall end as of December 31, 2000. If such notice is duly provided by Executive, then his period of employment under this Agreement shall terminate as of such time and all obligations of the parties hereunder, except for those set forth in Sections 6, 7 and 8 hereof, shall no longer be in effect. 3. Termination. The period of employment shall be terminated upon the first to occur of the following: (i) The expiration of the period of employment pursuant to Section 2 of this agreement. (ii) The Executive's death. (iii) The Executive becoming permanently disabled. Permanent disability shall mean physical or mental incapacity of a nature which prevents Executive from performing his duties under this Agreement for a period of more than six months in any twelve month period. (iv) The Executive's employment being terminated by Company for cause. Termination for cause shall mean termination by action of the Board of Directors of Company because of any of the following: (a) the willful failure of Executive to perform his duties and obligations under this Agreement; (b) the failure to abide by, or to execute in a reasonable and responsible manner, the policies and procedures of the Company as in effect from time to time; (c) gross negligence in the performance of his duties under this Agreement; (d) the commission by Executive of a felony; (e) engaging in any activity that is competitive with the business of the Company; or (f) engaging in fraudulent, unethical or dishonest activities. 4. Compensation and Benefits. (a) The Executive shall receive regular compensation (the "Base Salary") at the initial rate of One Hundred Fifty Thousand Dollars ($150,000.00) per annum during the Initial Term. The Base Salary shall be payable in arrears less the usual payroll deductions at the same times and in the same manner as salaries paid to other employees of the Company. The Executive shall participate in any wage increases applicable generally to salaried employees of Company. The Base Salary prevailing at any time shall be reviewed annually for a possible increase beginning in January 2000. (b) In addition to the Base Salary, the Executive shall be entitled to receive annual incentive compensation payments ("Incentive Compensation") for 1999 based on a formula set forth on Exhibit A hereto. For years thereafter, the Executive shall be entitled to receive Incentive Compensation at such times and in such amounts as may be determined pursuant to the Bonus Plan for Executives of subsidiaries of Bacou USA, Inc., as in effect for the applicable year (the "Company Plan"; a copy of the Company Plan for 1999 is attached to this Agreement as Exhibit B). Executive acknowledges that, by agreeing to participate in the Company Plan for the years 2000 and beyond, he thereby waives any rights to participate in any other incentive compensation plan of the Company. (c) Incentive Compensation shall be paid by Company for each fiscal year within ten (10) days after a decision is made by the Board of Directors of Company as to the amount of such Incentive Compensation, but in any event no later than the earlier of the annual meeting of the Board of Directors of the Company or February 28 following the fiscal year for which the Incentive Compensation is paid. (d) The Executive shall be entitled to participate in any stock option plan which Bacou USA, Inc. may adopt for Company at levels to be determined by the Board of Directors of Company in its sole discretion. It is anticipated that contingent upon the closing of the Perfect Fit Glove transaction, you will be granted options to purchase 10,000 shares of the Company's Common Stock pursuant to the Company's 1996 Stock Incentive Plan at the closing price of the stock on that day. (e) The Executive shall be entitled to participate in all savings, thrift, retirement or pension, short term and long term disability, health and accident, Blue Cross/Blue Shield, Major Medical or other hospitalization, holiday, vacation, and other fringe benefit programs generally available to senior executives of Company in accordance with and subject to the terms and conditions of such programs. (f) In addition, the Executive shall be entitled to receive the following benefits: (i) The Executive shall have the use of a company car, subject to the Automobile Policy of Bacou USA, Inc., a copy of which is attached to this Agreement as Exhibit C. To the extent that you have a leased or owned vehicle in place at the beginning of the Initial Term, we shall pay you the standard amount payable pursuant to the Company's Automobile Policy until such time as the lease expires on such vehicle or you are ready or purchase another vehicle. (ii) The Executive shall be entitled to vacation pursuant to the Bacou USA, Inc. Executive Vacation Policy. Vacation days will be taken at a time convenient for both the Executive and Company. To the extent the Executive does not take all vacation days the remaining days will be carried forward for an unlimited period or be paid to the Executive at the level of his Base Salary valid for the fiscal year in which vacation days are not taken. (iii) When traveling on Company business, the Executive will be provided coach-class airfare on domestic trips; business class airfare will be provided on international trips. (iv) The Executive is authorized to incur reasonable expenses in connection with and for the promotion of the business of Company, including expenses for meals and lodging (regular hotel room, no suites), entertainment, and similar items as required from time to time by the Executive's duties. Company shall reimburse the Executive for all such expenses upon the presentation of an account therefor, together with appropriate supporting documentation. 5. Limitations on Authority. Except as otherwise provided herein, approval by the Chairman must be obtained prior to the Executive taking any of the following actions on behalf of the Company: (a) Acquisition or disposition of real property or any rights deriving therefrom, or changing title in any such real property. (b) Making unplanned capital expenditures or any commitment therefor in an amount greater than $10,000 for any individual expenditure and $50,000 in the aggregate in any fiscal year; (c) Borrowing or guaranteeing any borrowings from or on behalf of any party, or altering the terms of any loan agreements for such borrowings except for any such loans or borrowings as shall be agreed upon by the Board of Directors of Company; (d) Hiring, terminating, promoting or demoting executive personnel with annual salary in excess of $50,000 or granting unbudgeted raises, bonuses or other compensatory payments to any employee of the Company; (e) Promoting or hiring anyone to a position above the Manager level (i.e. to Director or above); (f) Granting retirement benefits or other non-earned income to any person; (g) Modification of any qualified plan or other benefit plan, e.g., health insurance; (h) Acquiring the assets or shares of any business; (i) Acquiring or disposing of the assets or shares of the Company or selling any fixed asset of the Company below book value or writing off inventory of the Company with an aggregate book value exceeding $50,000 in any fiscal year; (j) Entering into or terminating agreements of any kind or nature with a monthly financial obligation in excess of U.S. $5,000 for more than six (6) months except purchase orders for materials required for the manufacture of products for sale in the ordinary course of business; (k) Making basic changes in the administration, organization, production, and distribution of Company or any of its affiliates, as well as closing or curtailing the functions of Company or any of its affiliates; (l) Filing any lawsuit; (m) Making cash or non-cash corporate contributions above the annually budgeted amount; (n) When there is a large volume of sales, the making of decisions requiring both extraordinary risks and extraordinary expenditures; (o) Entering into any transaction on behalf of Company or its affiliates which is not in the usual course of its business; (p) Adoption or modification of the annual budget. Notwithstanding the foregoing, approval is not required for any action provided for in the approved and applicable annual budget or annual plan of Company. In addition, should the Chairman be unavailable, if an emergency arises which requires the Executive to take immediate action in which approval as set forth in this Section would otherwise be required, the Executive is no longer bound by the limitations described above and is authorized to make a decision in the best interests of Company. The Executive will immediately inform the Chairman of any such decisions made by him. 6. Non-Disclosure of Information. It is understood that the business of Company and its affiliates is of a confidential nature. During the period of the Executive's employment with Company, the Executive may have received and/or may secure confidential information concerning Company or any of Company's affiliates or subsidiaries which, if known to competitors thereof, would damage Company or its said affiliates or subsidiaries. The Executive agrees that during and after the term of this Agreement he will not (except as authorized by Company or in the proper performance of his duties or except as ordered by a court or other body of competent jurisdiction or as otherwise required by law), directly or indirectly, divulge, disclose or appropriate to his own use, or to the use of any third party, any secret, proprietary or confidential information or knowledge obtained by him during the term hereof concerning such confidential matters of Company or its subsidiaries or affiliates, including, but not limited to, information pertaining to trade secrets, systems, manuals, confidential reports, methods, processes, designs, equipment lists, operating procedures, equipment and methods used and preferred by Company's customers. Upon termination of this Agreement, the Executive shall promptly deliver to Company all materials of a secret or confidential nature relating to the business of Company or any of its subsidiaries or affiliates which are, directly or indirectly, in the possession or under the control of the Executive. The provisions of this paragraph shall continue to apply after the Executive ceases to be employed by Company for a period of seven (7) years except in respect of any information or knowledge disclosed to the public, other than through an unauthorized disclosure by the Executive. 7. Trade Secrets. The Executive covenants that he shall, while employed by Company, assign, transfer, and set over to Company or its designee all right, title and interest in and to all trade secrets, secret processes, inventions, improvements, patents, patent applications, trademarks, trademark applications, copyrights, copyright registrations, discoveries and/or other developments (hereinafter "Inventions") which he may, thereafter, alone or in conjunction with others, during or outside normal working hours, conceive, make, acquire or suggest at any time which relate to the products, processes, work, research, or other activities of Company or any of its subsidiaries or affiliates. Any and all Inventions which are of a proprietary nature and which the Executive may conceive, may acquire or suggest, either alone or in conjunction with others, during his employment with Company (whether during or outside normal working hours) relating to or in any way pertaining to or connected with Company's business, shall be the sole and exclusive property of Company or its designee and the Executive, whenever requested to do so by Company, shall, without further compensation or consideration properly execute any and all applications, assignments or other documents which Company or its designee shall deem necessary in order to apply for and obtain Letters Patent of the United States and/or comparable rights afforded by foreign countries for the Inventions, or in order to assign and convey to Company or its designee the sole and exclusive right, title and interest in and to the Inventions. This obligation shall continue beyond the termination of this Agreement with respect to Inventions conceived or made by the Executive during the term of his employment by Company, and shall be binding upon his assigns, executors, administrators, and other legal representatives. 8. Non-Competition. (a) During the term of this Agreement or any renewal thereof and, at Company's option for a period of up to five years thereafter, should the Executive's contract be terminated or not be renewed, Executive agrees that he will not within the geographical area of the United States, engage, either directly or indirectly, individually or as an owner, partner, joint venturer, employee, officer, director, stockholder, consultant, independent contractor or lender of or to any corporation, holding Company or other business entity which is in a business similar to that of Company or any of its affiliates. In the event that Company chooses to exercise its option to prevent Executive from competing with Company following termination or non-renewal of his employment, Company shall notify Executive in writing either (i) at the time of Executive's last day of employment or (ii) at the time Company provides notice to Executive of its decision that Executive shall take a leave-of-absence, or, if Executive provides written notice to Company of his decision to terminate his employment with Company, Company shall notify Executive in writing within two (2) weeks thereafter, in any case specifying the period of up to five years following termination, resignation, or non-renewal of employment during which such competitive activity shall be prohibited. In the event Company exercises its option, Company shall pay Executive an amount equal to his annual Base Salary at the time of termination, resignation or non-renewal. Notwithstanding the foregoing, the Executive (as hereinbefore described in Section 2(d)) may own five (5%) percent of the securities of any business in competition with the business of Company or any of its affiliates, which securities are regularly traded on a public exchange, provided that any such ownership shall not result in the Executive becoming a record or beneficial owner at any time of more than five (5%) percent of equity securities of said business entity. (b) The Executive shall not during the term of his Employment under this Agreement or any renewal thereof, and for a period of five (5) years thereafter, employ, retain or arrange to have any other person or entity employ or retain any person who was employed by Company or any of its affiliated companies having an annual compensation of at least U.S. $50,000 per annum during the term of this Agreement or any renewal thereof. (c) If any provision of this Section is held to be unenforceable because of the scope, duration or area of its applicability or otherwise, the legal entity making that determination will have the power to modify the scope, duration or area, or all of them, and the provision will then apply in its modified form. 9. Property. All letters, memoranda, documents, business notes (including all copies thereof) and other information contained on any other computer media including computer disks and hard drives of the Executive in any manner relating to the duties of Executive under this agreement are the property of Company. 10. Notices. Any notices or other communications required to be given pursuant to this Agreement shall be in writing and shall be deemed given: (i) upon delivery, if by hand; (ii) three (3) business days after mailing, if sent by registered or certified mail, postage prepaid, return receipt requested; (iii) one (1) business day after mailing, if sent via overnight courier; or (iv) upon transmission, if sent by telex or facsimile except that if such notice or other communication is received by telex or facsimile after 5:00 p.m. on a business day at the place of receipt, it shall be effective as of the following business day. All notices and other communications hereunder shall be given as follows: (a) If to the Company, to it at: c/o Bacou USA, Inc. 10 Thurber Boulevard Smithfield, RI 02917 Attention: President Telephone No.: 401-233-0333 Telecopier No.: 401-232-2230 (b) If to the Executive, to him at: 5555 Armor Duells Road Orchard Park, NY 14127 Telephone No.: ( ) Telecopier No.: ( ) Either party may change its address for receiving notice by written notice given to the other names above in the manner provided above. 11. Full and Complete Agreement; Amendment. This Agreement (together with the Exhibits attached hereto) constitutes the full and complete understanding and agreement of the parties and supersedes all prior understandings and agreements. This Agreement may be modified only by a written instrument executed by both parties (except Exhibits B and C which are subject to modification from time to time by Bacou USA, Inc.) 12. Construction. This Agreement shall be construed under the laws of the State of Rhode Island. 13. Arbitration. Notwithstanding the fact that the parties shall be entitled to equitable relief in order to enforce certain provisions hereunder (e.g., temporary restraining orders or injunctive relief), any dispute, controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled by arbitration in accordance with the "Commercial Arbitration Rules" of the American Arbitration Association in effect on the date of this Agreement, except as varied below. The site of any such arbitration shall be Providence, Rhode Island and any award shall be deemed to be a Providence, Rhode Island award. There shall be a single arbitrator who shall be admitted to practice law in Rhode Island, with no less than ten (10) years experience in the handling of commercial or corporate matters or disputes. The arbitrator shall render a written decision stating his reasons therefor, and shall render an award within six (6) months of the request for arbitration, and such award shall be final and binding upon both parties. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction in any state of the United States or country or application may be made to such court for a judicial acceptance of the award and an enforcement, as the law of such jurisdiction may require or allow. The substantive law to be applied to any case determined pursuant to this Section 13 is that of Rhode Island. The expense of arbitration shall be borne by the respective parties except to the extent that the arbitrators shall determine that the entire expense shall be borne by a single party. 14. Binding Nature. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, personal representatives, successors and assigns. IN WITNESS WHEREOF, Company and the Executive have duly executed this Agreement as of the day and year first written above. PERFECT FIT GLOVE CO., INC. EXECUTIVE By: /s/ Walter Stepan /s/ Joseph P. Hoerner ----------------------- -------------------------- Name: Walter Stepan Joseph P. Hoerner Title: Chairman By: /s/ Philip B. Barr ------------------------ Name: Philip B. Barr Title: Vice Chairman EXHIBIT A 1999 INCENTIVE COMPENSATION The Target amount shall be as set forth in Exhibit 5.05 to the Asset Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group and affiliates of Bacou USA, Inc. |-----------------------------------------------|------------------------------| | Cash Flow Achievement | Bonus Amount | |-----------------------------------------------|------------------------------| |Below 90% of Target | $0 | |-----------------------------------------------|------------------------------| |At least 90% of Target, but less than 100% | 10% of 1999 Salary | |-----------------------------------------------|------------------------------| |At least 100% of Target, but less than 110% | 15% of 1999 Salary | |-----------------------------------------------|------------------------------| |At least 110% of Target, or above | 20% of 1999 Salary | |-----------------------------------------------|------------------------------| The Target amount shall be as set forth in Exhibit 5.05 to the Asset Purchase Agreement dated February 24, 1999 by and among the PFG Selling Group and affiliates of Bacou USA, Inc. Agreed: Walter Stepan ------ Philip B. Barr ------ Frank A. Stucke ------ EX-99 6 PRESS RELEASE Exhibit 99 Contact: At the Company: At The Financial Relations Board: 401-233-0333 212-661-8030 Philip B. Barr Analyst Information John McNamara Chief Financial Officer Media Information: Alan Goldsand Investor Relations General Information: Jeff Bogart FOR IMMEDIATE RELEASE BACOU USA COMPLETES ACQUISITION OF PERFECT FIT GLOVE CO., INC. OF BUFFALO, NEW YORK o Purchase includes SCHAS Circular Industries, Inc. of Wilkesboro, N.C. o Management of Bacou USA expects deal to be accretive to earnings in 1999 Smithfield, R.I., April 5, 1999 -- Bacou USA, Inc. (NYSE: BAU), a leading manufacturer of personal protective equipment, today announced that it has completed the acquisition of Perfect Fit Glove Co., Inc. of Buffalo, New York, and SCHAS Circular Industries, Inc. of Wilkesboro, North Carolina in an all cash transaction. Perfect Fit and SCHAS manufacture and sell non-disposable industrial gloves, specializing in cut and abrasion-resistant and heat-resistant work gloves. "Perfect Fit and SCHAS will form the base for our entry into the hand protection business," said Walter Stepan, Vice-Chairman, President and CEO of Bacou USA. "Both Perfect Fit and SCHAS have experienced management teams and highly dedicated workforces with substantial experience in the industrial glove business, and we are pleased that management and the entire workforce will be joining the Bacou USA family. We plan to continue their existing operations in their current locations. Our main goal is to continue the growth of these companies by providing the necessary capital and by taking advantage of synergies in our common distribution channels." According to a Frost & Sullivan market survey report for 1998, the most recent available, Perfect Fit ranked third in market share for sales of cut and abrasion-resistant work gloves within the U.S. industrial market for non-disposable gloves. The total U.S. industrial market for all types of non-disposable gloves was estimated by Frost & Sullivan to be approximately $1.1 billion. A 1998 survey of the Safety Equipment Distributors Association estimates that, on average, glove sales represent approximately 25% of the total annual sales volume of industrial safety distributors nationwide. The purchase price of approximately $53.8 million for both companies was financed entirely by debt. "Based on the operating history of Perfect Fit and SCHAS, their internal forecasts for 1999 and the current interest rate environment, we expect these acquisitions to be accretive in 1999 excluding the effect of any transaction related non-recurring items," said Stepan. For its year ended December 31, 1998, Bacou USA reported net sales of $219.6 million and, prior to non-recurring items, net profits of $25.8 million and earnings per share of $1.46 on a weighted average 17.6 million shares. After non-recurring items, Bacou USA reported net profits of $19.5 million and earnings per share of $1.19. Bacou USA, Inc. designs, manufactures and sells leading brands of products that protect the sight, hearing, respiratory systems and hands of workers, as well as related instrumentation including visions screeners, gas monitors and test equipment for self-contained breathing apparatus. The company's products, marketed under Uvex(R), Howard Leight(R), Perfect Fit(R), Survivair(R), Pro-Tech(R), Biosystems, Titmus(R), LaserVision and Lase-R Shield(TM) brand names, are sold principally to industrial safety distributors, fire fighting equipment distributors and optical laboratories. News and information about Bacou USA are available on the Worldwide Web at http://www.bacouusa.com. To receive additional information on Bacou USA, Inc., via fax, at no charge, dial 1-800-PRO-INFO and enter code BAU. ### Statements contained in this press release that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities and Litigation Reform Act of 1995. In addition, words such as "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties, including but not limited to the timely development and acceptance of new products, the impact of competitive products and pricing, changing market conditions, the successful integration of acquisitions, continued availability and favorable pricing of raw materials, the ability of the company and its key vendors to successfully respond to Year 2000 issues and the other risks detailed in the company's prospectus filed March 27, 1996, and from time to time in other filings. Actual results may differ materially from those projected. These forward-looking statements represent the company's judgment as of the date of this release. The company disclaims, however, any intent or obligation to update these forward-looking statements. -----END PRIVACY-ENHANCED MESSAGE-----