Common use of Additional Merger Consideration Clause in Contracts

Additional Merger Consideration. In addition to the Closing Merger Consideration and as an integrated part of the overall Merger Consideration, as security for the performance of the representations, warranties and covenants of the Company Stockholder contained in this Agreement and based on the future performance of the Company and WRG, on the Closing Date an additional $500,000 of Parent Common Stock (the “Additional Merger Consideration”), valued in the same manner as the Closing Merger Consideration, shall be issued at the Closing to the Company Stockholder and shall be held in escrow by legal counsel to the Company Stockholder (the “Escrow Agent”), pursuant to an escrow agreement reasonably acceptable to the Parties and such counsel, and released to the Company Stockholder, as follows. In the event that (A) the combined “Pre-Tax Profits of the Corporations” (as hereinafter defined) in each of the fiscal years ending December 31, 2016, 2017 and 2018 (each a “Measuring Year” and collectively, the “Measuring Years”) shall equal or exceed $8,500,000, and (B) for so long as no material breach of any such representations, warranties and covenants shall have occurred and shall be continuing, that number of shares of Parent Common Stock representing $100,000, valued in the same manner as the Closing Merger Consideration, shall be delivered to the Company Stockholder promptly following the end of December 31, 2016, December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020, respectively. As used in this Agreement, the term “Pre-Tax Profits of the Corporations” shall mean the net combined or consolidated profits of the Company and WRG (collectively, the “Corporations”), exclusive of and after elimination of all inter-company transactions, as determined in accordance with generally accepted accounting principles (“GAAP”), applied on a consistent basis and consistent with the historical reporting practices of such Corporations, and after deduction of all salaries and bonuses, but before deductions for (A) income taxes, (B) payments in respect of interest charges on any of the minimum $35,000,000 of Required Financing incurred by the Parent in order to consummate the acquisition of the Corporations, and (C) payments of any performance bonus payable in respect of the applicable Measuring Year to the Company Stockholder and Xxxxxxxx pursuant to their respective employment agreements.

Additional Merger Consideration. In addition (a) Prior to the Closing Merger Consideration Effective Time, any options granted under the Company's 1996 Performance Option Plan (the "Performance Option Plan") which have not heretofore vested shall, subject to and as an integrated part contingent upon receiving approval by the Stockholders in accordance with Section 280G(b) (5) (B) of the overall Merger ConsiderationCode, as security for the performance of the representations, warranties and covenants of the Company Stockholder contained in this Agreement and based on the future performance of be accelerated by the Company and WRGvest in full. Each holder (each an "Executive" and collectively, the "Executives") of the options granted under the Performance Option Plan shall exercise (the "Executive Option Exercise") the options granted under the Performance Option Plan to purchase the number of Shares set forth opposite his name on Annex II under the heading "Purchased Option Shares" prior to the -------- Effective Time. Immediately prior to the Effective Time, the Company, subject to and contingent upon receiving approval by the Stockholders in accordance with Section 280G(b) (5) of the Code, shall pay to each of the Executives the bonus set forth on Schedule 1.11 opposite such Executive's name (the "Executive ------------- Bonuses"), net of all applicable withholding taxes. The Aggregate Merger Consideration (including the amount of Indebtedness and cash and cash equivalents) shall be determined after giving effect to the payment of the Executive Bonuses as though such payment had occurred on the Closing Date an additional $500,000 close of Parent Common Stock business on October 24, 1997. The Company shall promptly file amended Tax Returns for 1996 and Tax Returns and refund claims for 1997 reflecting the compensation expenses associated with the Executive Option Exercise (and the “Additional Merger Consideration”disposition of the Shares received upon such exercise), valued in the same manner as the Closing Merger Considerationcancellation, shall be issued at the Closing to the Company Stockholder and shall be held in escrow by legal counsel to the Company Stockholder (the “Escrow Agent”)for cash, of certain Employee Stock Options, pursuant to Section 1.5(c) and the Executive Bonuses (the "Executive Deductions"). The Aggregate Merger Consideration includes $1.1 million of consideration ("Tax Payment") that relates to the tax savings realized by the Company when it elected not to make estimated tax payments in anticipation of a reduction of its 1997 taxable income as a result of Tax Savings (as defined below). On December 15, 1997, the Company shall pay $1.0 million ("December Payment") to an escrow agent selected by mutual agreement reasonably acceptable of the MergerCo and a majority of the Stockholders (the "Escrow Agent") reflecting an additional tax savings that will result from the Company's election not to make a fourth quarter estimated tax payment in anticipation of a reduction of its 1997 taxable income as a result of Tax Savings. Neither the Tax Payment nor the December Payment shall be treated as a Tax Savings for purposes of this Agreement it being understood that the Tax Savings allocated pursuant to clause (i) below shall be Tax Savings in lieu thereof. When, as and if the Company realizes any Tax Savings (as defined below), it shall allocate such Tax Savings as follows: (i) All Tax Savings realized from time to time shall be retained by the Company (rather than paid to the Parties Escrow Agent) until $2.1 million of Tax Savings have been allocated pursuant to this clause (i) and such counselTax Savings shall have either (a) not been reversed or (b) if reversed, the Company shall have received payments from the Stockholders pursuant to Section 6.1(d) equal to the amounts so reversed; then (ii) All Tax Savings realized from time to time shall be paid by the Company to the Escrow Agent until the earlier of (a) such time as $7.9 million of Tax Savings have been allocated pursuant to this clause (ii) and have not been reversed or (b) March 31, 1999; then (iii) All Tax Savings shall be paid by the Company to the Stockholders, pro rata based on their respective Ownership Percentages (as defined below), until such time as $7.9 million of Tax Savings have been allocated pursuant to clause (ii) and this clause (iii) and have not been reversed Any reversal of Tax Savings will be allocated first to reverse allocations of Tax Savings made pursuant to clauses (ii) and (iii), and released then to reverse allocations made pursuant to clause (i) Each date on which the Company files a tax return or a request for a refund of taxes previously paid by it is referred to herein as a "Measurement Date." On or promptly after each Measurement Date, the Company will determine the amount of any Tax Savings for the tax period to which such tax return or request for refund relates by performing two hypothetical calculations of its income tax liability. The first calculation (the "Without Calculation") will be done without giving effect to all Executive Deductions. The second calculation (the "With Calculation") will give effect to all Executive Deductions that have been incurred, have not been disallowed and have not previously given rise to Tax Savings. If the Company would have been required to pay a tax for the relevant period pursuant to the Without Calculation (a "Without Tax") and would have been entitled to receive a tax refund for the relevant period pursuant to the With Calculation (a "With Tax Refund"), then the Company Stockholderwill be deemed to have realized a Tax Savings (x) on the date it files such tax return equal to such Without Tax and (y) on the date it receives the requested refund (or would have received such refund, had it not elected to apply such refund against any tax liability) equal to such With Tax Refund. If the Company would have been required to pay a tax for the relevant period pursuant to the Without Calculation (a "Without Tax") and would have been required to pay a tax for the relevant period pursuant to the With Calculation (a "With Tax"), then the Company will be deemed to have realized a Tax Savings on the date it files such tax return equal to the amount of such Without Tax minus the amount of such With Tax. If the Company would have been entitled to a tax refund for the relevant period pursuant to the Without Calculation (a "Without Tax Refund") and would have been entitled to receive a tax refund for the relevant period pursuant to the With Calculation (a "With Tax Refund"), then the Company will be deemed to have realized a Tax Savings on the date it receives the requested refund (or would have received such refund, had it not elected to apply such refund against any tax liability) equal to the amount of such With Tax Refund minus the amount of such Without Tax Refund. Notwithstanding anything to the contrary herein, once a Tax Savings has been deemed realized, such Tax Savings will not be subsequently reversed as followsa result of the carryback of any losses generated in any subsequent taxable year. Likewise, any Executive Deductions that have not given rise to any Tax Savings shall be carried forward and properly taken into account in subsequent years, but once such Executive Deduction generates a Tax Savings, it will not be utilized again. In the event that any Tax Savings is disallowed, the parties to this Agreement shall have the rights specified in Sections 6.1(d) and (A) e). In the combined “Pre-Tax Profits event the Company engages in any transactions out of the Corporations” (as hereinafter defined) in each ordinary course of business after the fiscal years ending December 31, 2016, 2017 Effective Time and 2018 (each a “Measuring Year” and collectively, the “Measuring Years”) shall equal or exceed $8,500,000, and (B) for so long as no material breach of any such representations, warranties and covenants shall have occurred and shall be continuing, that number of shares of Parent Common Stock representing $100,000, valued in the same manner as the Closing Merger Consideration, shall be delivered prior to the Company Stockholder promptly following the end of December 1997 (other than transactions contemplated by the Recapitalization Agreement and refinancing of the Company's bridge indebtedness), the net losses resulting from such transactions will not reduce any Tax Savings that have been, or otherwise would be, realized in 1996 or 1997, but will be taken into account in determining any Tax Savings for any tax period after 1997. The amounts to be held in escrow, as described above shall be released to the Surviving Corporation to the extent necessary to satisfy any indemnity claims under Section 6.1(d). All funds held in escrow that are not requested to be disbursed to the Surviving Corporation prior to March 31, 20161999, December 31will be distributed to the Stockholders, 2017, December 31, 2018, December 31, 2019 and December 31, 2020, respectively. As used in this Agreement, pro rata based upon their proportionate share --- ---- of ownership of Shares on a fully-diluted basis assuming the term “Pre-Tax Profits of the Corporations” shall mean the net combined or consolidated profits of the Company and WRG (collectively, the “Corporations”), exclusive of and after elimination exercise of all inter-company transactionsoptions and warrants outstanding as of October 4, as determined in accordance with generally accepted accounting principles 1997 (“GAAP”the "Ownership Percentage"), applied on a consistent basis and consistent with the historical reporting practices of such Corporations, and after deduction of all salaries and bonuses, but before deductions for (A) income taxes, (B) payments in respect of interest charges on any of the minimum $35,000,000 of Required Financing incurred by the Parent in order to consummate the acquisition of the Corporations, and (C) payments of any performance bonus payable in respect of the applicable Measuring Year to the Company Stockholder and Xxxxxxxx pursuant to their respective employment agreements.

Additional Merger Consideration. In addition to the Closing Merger Consideration and as an integrated part of the overall Merger Consideration, as security for the performance of the representations, warranties and covenants of the Company Stockholder contained in this Agreement and based on the future performance of the Company and WRG, on the Closing Date an additional $500,000 of Parent Common Stock (the “Additional Merger Consideration”), valued in the same manner as the Closing Merger Consideration, shall be issued at the Closing to the Company Stockholder and shall be held in escrow by legal counsel to the Company Stockholder (the “Escrow Agent”), pursuant to an escrow agreement reasonably acceptable to the Parties and such counsel, and released to the Company Stockholder, as follows. In the event that (A) the combined “Pre-Tax Profits of the Corporations” (as hereinafter defined) in each of the fiscal years ending December 31, 2016, 2017 and 2018 (each a “Measuring Year” and collectively, the “Measuring Years”) shall equal or exceed $8,500,000, and (B) for so long as no material breach of any such representations, warranties and covenants shall have occurred and shall be continuing, that number of shares of Parent Common Stock representing $100,000, valued in the same manner as the Closing Merger Consideration, shall be delivered to the Company Stockholder promptly following the end of December 31, 2016, December 31, 2017, December 31June 30, 2018, December 31June 30, 2019 2018 and December 31, 2020, respectively. As used in this Agreement, the term “Pre-Tax Profits of the Corporations” shall mean the net combined or consolidated profits of the Company and WRG (collectively, the “Corporations”), exclusive of and after elimination of all inter-company transactions, as determined in accordance with generally accepted accounting principles (“GAAP”), applied on a consistent basis and consistent with the historical reporting practices of such Corporations, and after deduction of all salaries and bonuses, but before deductions for (A) income taxes, (B) payments in respect of interest charges on any of the minimum $35,000,000 of Required Parent Financing incurred by the Parent in order to consummate the acquisition of the Corporations, and (C) payments of any performance bonus payable in respect of the applicable Measuring Year to the Company Stockholder and Xxxxxxxx pursuant to their respective employment agreements.