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Xxxx Xxxxxxxxxx, Xxxxxxx 00000
19 April 2000
From: Xxxx X. Xxxxxxx, Executive VP & COO
To: Smiley X. Xxxxxxx, President & CEO
Xxxxxx X. Xxx, CFO
Subject: REQUEST TO RENEGOTIATE TERMS OF EMPLOYMENT Ref (a): Employment
Agreement dated 3 March 2000
Dear Gentlemen,
Under routine circumstances I would not entertain the notion of
reopening negotiations on an agreement whose terms I have accepted. I understand
that you are under no obligation to entertain such negotiations. That having
been said:
1. I believe very strongly that conditions of my employment as both Executive VP
and Chief Operating Officer of our company, present other than routine
circumstances. In fact, had I completely understood the depth, scope and
complexity of those circumstances which I have now become steeped in, I would
have likely decided against accepting your offer of employment under the current
terms of agreement. I had relied on my perusal of available SEC filings,
material available on the corporate website, and representations of management
and knowledgeable investors. For a number of reasons which need not be discussed
in this forum, I underestimated the tasks at hand as well as the salary
structure, and therefore sold my services short.
2. In the past month, as you both are aware, I have cut a bloated payroll at our
Florida headquarters by approximately $1.4 million per year, while quantifiably
increasing both productivity and sales. Simultaneously, I have taken aggressive
measures to reorganize and restructure the management team into the beginnings
of an effective and re-energized group who have demonstrated a rediscovered
ability and desire to follow through on tasks & goals. Additionally, I am
instituting measures that will ensure further efficiencies, while buffering us
from potential liabilities in the areas of human resources, customer service and
payroll. I trust that you recognize that Company morale, an intangible, but
critical ingredient to our long term success, has palpably improved.
3. I don't believe that it is an overstatement to say that these are far from
the conditions which greeted me upon my arrival. We are on the right track, but
have a number of turbulent issues ahead that must be proactively addressed in
order exploit these improvements, as well as a host of persistent issues which I
have inherited.
4. I would ask that given the information outlined above, as well as many other
significant issues which we have personally discussed on numerous occasions,
that you approve effective immediately, an increase in my base salary from $108K
annually, to $150K annually.
Additionally, I request that the annual bonus paragraph 3.(b) be amended to
reflect a minimum guaranteed bonus in January 2001 in the amount of $45,000 the
maximum being 50% of annual base salary.
I respectfully request that due consideration be given to the increases in
compensation detailed in paragraphs 4 & 5 above, and your decision be evidenced
by your signatures below, and that a copy of this letter be appended to my
current employment agreement.
Most Sincerely,
LtCol A. R. Pavsner USMC (Retired)
Exec VP / COO
APPROVED / DISAPPROVED (circle one and initial) APPROVED / DISAPPROVED (circle one and initial)
/s/ Smiley X. Xxxxxxx 4/24/00 /s/ Xxxxxx X. Xxx 4/20/00
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Smiley X. Xxxxxxx, Pres/CEO Date Xxxxxx X. Xxx, CFO Date
