EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of December
29, 2008, between DECORATOR INDUSTRIES, INC. (the "Company" or
"Employer"), a
Pennsylvania corporation, and WILLIAM BASSETT ("Employee"), of
Pasco County,
Florida.
WHEREAS, Employee has been President and Chief Executive
Officer of the Company, in which capacity his services have
contributed
materially to the successful operation of the Company's
business;
WHEREAS, the parties entered into an employment agreement,
dated August 2, 1994, and amended both on July 29, 2003 and on May
25, 2004
(collectively the "Prior Agreement"), and insofar as the Prior
Agreement
addressed the employment of Employee on and after January 1, 2008,
the parties
through this Agreement rescind and revoke the Prior Agreement, and
enter into
this Agreement to address the terms and conditions of Employee's
employment by
the Company on and after January 1, 2008.
NOW,
THEREFORE, intending to be legally bound hereby, the
Company hereby agrees to employ Employee, and Employee hereby
agrees to be
employed by the Company, upon the following terms and
conditions:
1. TERM. The
Company will employ Employee and Employee accepts
employment with the Company on the terms and conditions herein from
January 1,
2008 until December 31, 2012 (the "Term"), unless earlier
terminated as provided
in paragraph 8.
2. DUTIES.
Employee shall use his best energies and abilities in
performing such services and duties as are assigned to him by the
Company's
Board of Directors, and as he deems reasonably necessary for the
benefit of the
Company, in the capacity as an executive level consultant and
adviser to the
Company. His duties shall include assistance and advice to the
President of the
Company, review and advice regarding the Company's financial
matters, strategic
planning, and both due diligence for and the negotiation of
acquisitions by the
Company.
3. COMPENSATION.
During the Term of this Agreement, subject to the
provisions of Sections 8 and 9, the Company shall pay to the
Employee a base
annual salary of $216,000, payable in monthly installments of
$18,000 in
accordance with the Company's established payroll policies.
4. HEALTH
INSURANCE BENEFITS.
(a) During Employee's employment hereunder and subsequently for
the
life of Employee
and/or his spouse, Employer shall pay or reimburse, as
applicable, the
following:
(i) the premiums required for the Employee and/or his spouse to
participate in the Employer's group health plans. If Employee
and/or his spouse are not eligible to participate in such group
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health
plans, or if no such plans are maintained, the Employer
shall reimburse the premiums required for Employee and/or his
spouse to participate in Medicare Parts A, B and D (or other
government health plan replacing Medicare) that would otherwise
be
borne by Employee, and the premiums for Medicare Supplement
(Medigap) insurance coverage; and
(ii) premiums for a long-term care policy or policies, procured
by the Company, covering Employee and his spouse; provided
that,
to the extent that such premiums on an annual basis exceed
$10,744.98, Employee shall be responsible for paying such
excess.
(b) Without limitation of the provisions of Section 4(a), the
following
provisions shall apply after the termination of Employee's
employment:
(i) During COBRA Continuation Period. To the extent permitted
by applicable law and Employer's benefit plans, Employer shall
maintain Employee's paid coverage for health insurance through
the
payment of Employee's COBRA premiums until the expiration of
the
COBRA Continuation Period. During the applicable period of
coverage described in the foregoing sentence, the Employee
shall
be entitled to benefits, on substantially the same basis as
would
have otherwise been provided had Employee not been terminated.
To
the extent that such benefits are available under Employer's
benefit plans and Employee had such coverage immediately prior
to
termination of employment, such continuation of benefits for
Employee shall also cover the Employee's dependents for so long
as
Employee is receiving such benefits under this Section 4(b)(i).
The COBRA Continuation Period for health insurance under this
Section 4(b)(i) shall be deemed to run concurrent with the
continuation period federally mandated by COBRA (generally 18
months), or any other legally mandated and applicable federal,
state, or local coverage period for benefits provided to
terminated employees under the health care plan(s).
(ii) After COBRA Continuation Period. Following the conclusion
of the COBRA Continuation Period described above (or, if
sooner,
the cessation of such coverage), Employer will reimburse
Employee
(or Employee's spouse, as applicable, net of applicable
withholdings required by law) for the premium for Employee
and/or
his spouse to participate in Medicare Parts A, B and D (or
other
government health plan replacing Medicare), including the
premiums
for Medicare Supplement (Medigap) insurance coverage that would
otherwise be borne by Employee.
5. LIFE INSURANCE.
(a) The Company shall continue during Employee's employment
hereunder to
reimburse (net of applicable withholdings required by law)
Employee for the
premiums Employee pays on General American Life Ins.
Policy No. 612860
(Policy 612860), so long as Policy 612860 is in
effect. If
Employee cancels, suspends or surrenders Policy 612860, he
shall notify the
Company before doing so, but giving such notice shall
not create any
right in the Company to make any claim against Policy
612860.
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<PAGE>
(b) On or before December 31, 2008, the Company shall transfer
American General
Life Ins. Policy No. U10017109L ("Policy 10017109L")
to Employee, and
shall thereafter during Employee's employment
hereunder
reimburse (net of applicable withholdings required by law and
plus the Gross-Up
Payment (net of applicable withholdings) provided for
in Section 7(b))
Employee for the premiums Employee pays on Policy
10017109L. If
Employee cancels, suspends or surrenders Policy
10017109L, he
shall notify the Company before doing so, but giving such
notice shall not
create any right in the Company to make any claim
against Policy
10017109L.
6. OTHER FRINGE
BENEFITS.
(a) During Employee's employment hereunder, Employee shall
continue
to receive other
fringe benefits from the Company on no less favorable
a basis than other
employees of the Company of executive rank and
status, except for
benefits not legally available to Employee because
of his status,
compensation, age or similar factors, and subject to a
maximum cost to
the Company of $35,000 per year.
(b) During Employee's employment hereunder, the Company shall
provide Employee a
computer for home use, linked to the Company's
network and
server.
7. TREATMENT OF
TAXABLE BENEFITS.
(a) To the extent required by law, the Company will annually
report
as taxable wages
and/or impute income to Employee the value of any
taxable benefits,
and all payments to the Employee shall be net of
applicable
withholdings as required by law.
(b) To the extent that the reimbursement right provided in
Section
5(b) shall be
subject to income taxation under the federal Internal
Revenue Code of
1986 (the "Code") ("Additional Tax"), Employee shall be
entitled to
receive, and the Company shall pay to Employee, with the
reimbursement
payment, an additional payment ("Gross-Up Payment") in an
amount equal to
the Additional Tax (including federal income tax on
such Additional
Tax, computed at the highest marginal personal income
tax rate).
Employer shall also pay to Employee in 2008 a Gross-Up
Payment (net if
applicable withholdings) in an amount equal to the
Additional Tax due
by Employee on the transfer of the American General
Policy.
Determination of any Gross-Up Payment shall be made by Louis
Plung & Co. or
such other recognized accounting firm mutually accepted
by the Company and
Employee.
(c) Reimbursement to Employee for premiums under Sections 4 or
5
will be available
only to the extent that: (i) such expense is actually
incurred for any
particular calendar year and reasonably substantiated;
(ii) reimbursement
shall be made no later than the end of the calendar
year following the
year in which such expense is incurred by Employee;
and (iii) no
reimbursement provided for any expense incurred in one
taxable year will
affect the amount available in another taxable year.
The Employee is
not entitled to liquidate or exchange for another
benefit any right
to reimbursements or in-kind benefits under this
Agreement.
However, in the event that any benefit provided for in
Sections 4 or 5 of
this Agreement ceases to be commercially available,
the Company shall
use its commercially reasonable best efforts to
provide the
Employee with a substitute in-kind benefit or health or
life insurance
product which preserves for the Employee the practical
realization of the
benefits contemplated in this Agreement.
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8.
TERMINATION.
(a) The Company may involuntarily terminate the employment of
Employee for his
dishonesty or willful misconduct adversely affecting
its business
affairs, based on majority vote of the Company's Board of
Directors and
reasonable written notice to Employee of that vote.
(b) If for any reason Employee becomes totally and permanently
disabled,
physically or mentally, so as to be unable to perform all of
his duties
hereunder, and the Employee is reasonably unlikely to
recover to the
extent necessary to resume his usual duties within 60
days, the Company
by a majority vote of its Board of Directors may
involuntarily
terminate without cause the employment of Employee
hereunder,
effective a reasonable time after receiving written medical
documentation of
such total and permanent disability. The total and
permanent
disability of the Employee shall be substantiated by a
written report of
the Employee's regular physician or any other
physician
satisfactory to the Company and the Employee. The Employee
agrees to make
himself and his medical records available to such
physician for the
purposes of preparing such written report concerning
his total and
permanent disability.
(c) If Employee dies during the Term, his employment hereunder
shall terminate
and the payment of compensation under Section 3 shall
thereupon be
discontinued; provided, however, the Company shall pay
$108,000 to his
designated payee, or if none, to the trustee of his
revocable living
trust, or if no trustee, to his estate. Any such
payment shall be
made within 60 days of the date of Employee's death.
Notwithstanding
such employment termination, the provisions of Section
4 of this
Agreement shall survive for the benefit of Employer's spouse,
