PERFORMANCE-BASED
COMPENSATION AGREEMENT
THIS AGREEMENT, entered into as of this ___ day of ___________, between
CHAPPARRAL BOATS, INC., a Georgia corporation (hereinafter called the
"Company"), and XXXXX X. XXXX, XX. (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Employee and Employee desires to
accept employment on the terms and conditions hereinafter stated; and
NOW, THEREFORE, in consideration of the employment of Employee by the
Company, and the promises and mutual covenants and agreements herein contained,
the parties agree as follows:
1. Definitions
a) The term "Pre-tax Profits" as used herein means the profits of the
Company determined in accordance with generally accepted accounting
principles consistently applied prior to:
(i) any provision being made for a Special Payment (as defined in
Section 1(c);
(ii) any recognition of an extraordinary gain or loss;
(iii) any provision for federal and state income taxes;
(iv) any provision being made for the bonus provided for in Section
3(b) hereof and any bonus provided for in Section 3(b) of the
performance based compensation agreement between the Company and
Xxxxxxx X. Xxxx dated the date hereof; and
The parties acknowledge that in determining Pre-tax Profits (i) the
cost of payments referred to in Section 3(b) hereof shall be expenses
in the period accrued; (ii) interest on the amount of working capital
employed for expansion through acquisitions and/or for Capital
Improvements shall accrue for the account of Parent at the rate of
one-half percent (1/2%) over the prime rate charged by SunTrust Bank,
Atlanta, Georgia at the date of such employment of funds, which
interest shall accrue from the date such funds are contributed or
designated for such employment through the date on which such funds
are deemed repaid to Parent; and (iii) such profit shall be determined
by the independent certified public accountant regularly employed by
the Company in accordance with generally accepted accounting
principles consistently applied except as herein modified; and, in
particular, a sale of goods by the Company shall not be deemed to
occur until the purchaser accepts delivery thereof.
(b) The term "Parent" as used herein means Marine Products Corporation, a
Delaware corporation.
(c) The term "Special Payment" as used herein means any management fee or
charge assessed by Parent against the Company other than charges
(which are no greater than would be charged by an unrelated third
party) for goods and services furnished to the Company by Parent of a
type which the Company customarily obtains or requests and which the
Company would require or would desire to obtain from a third party but
for their availability from or through Parent. Additionally, the term
"Special Payment" shall include intercompany overhead allocation or
general accounting fee.
2. Term and Duties
(a) Employee shall serve the Company as its President, Chief Executive
Officer, Chief Financial Officer and Treasurer for a term of seven
years beginning November 3, 2000 and ending November ___, 20___ unless
earlier terminated as provided herein.
(b) In addition to those duties and responsibilities set forth in the
corporate bylaws of the Company, Employee shall have the duties of
leadership and responsibility normally associated with the offices
President, Chief Executive Officer, Chief Financial Officer and
Treasurer of and shall be responsible for marketing, dealer relations,
accounting and administration. He shall use his best efforts to
perform his duties in a manner which is in the best interest of the
Company. His responsibilities shall include the negotiation and
execution of contracts on behalf of the Company in the ordinary course
of business, and the employment and supervision of personnel required
for the operation of the Company, and such other duties consistent
with his position with the Company as may from time to time be
assigned to him by the Chairman of the Board of Directors of the
Company or the President of the Parent if the Board of Directors of
the Company shall so designate.
(c) For so long as Employee is employed by the Company, Employee agrees
(i) to devote all his time, energy and skill during regular business
hours to the performance of the duties of his employment (accrued
vacations and reasonable absences due to illness excepted), and (ii)
not to engage directly or indirectly in any active work for which he
receives compensation or other emolument without the prior written
consent of the Chairman of the Board of Directors of the Company or
such other person as the Board of Directors of the Company shall
designate from time to time, provided that nothing contained herein
shall be deemed to preclude Employee from owning 1% or less of the
2
outstanding shares of any publicly traded company or from serving on
the board of directors of any company in which Employee invests in
accordance with the terms of this Agreement.
3. Compensation
(a) Employee shall receive a base salary of $67,841 per year paid in
approximately equal weekly installments in arrears and in accordance
with the Company's normal payroll and withholding procedures.
(b) In addition to the compensation provided for in Section 3(a) hereof,
Employee shall be paid an incentive bonus equal to ten (10%) percent
of Pre-tax Profits. The Pre-tax Profits for each fiscal year (or part
thereof) during the term of this Agreement shall be estimated at the
end of each calendar month and an advance payment of the amount of the
estimated incentive bonus which has been earned during such fiscal
year (less previous advances) shall be paid to Employee following such
determination and prior to the end of the next following month. The
definitive amount of the incentive bonus shall be determined by the
firm of certified public accountants employed by the Parent in
connection with their examination of the financial statements of the
Company for each fiscal year during the term of this Agreement which
determination shall be final and binding on Employee and the Company.
Following such determination the Company shall pay Employee any
additional incentive bonus due him or Employee shall reimburse the
Company for any over-payments of the incentive bonus, as the case may
be.
4. Notices
Any notice required or permitted to be given to one party by the other
party hereto pursuant to this Agreement shall be in writing and shall be
personally delivered or sent by United States Mail, certified or registered,
return receipt requested, first class postage and charges prepaid, in envelopes
addressed to the parties as follows:
Employee: Xxxxx X. Xxxx, Xx.
Xxxxxxxxxx Xxxx Xxxx.
Xxxxxxxxx, Xxxxxxx 00000
Company: Chaparral Boats, Inc.
c/o Marine Products Corporation
0000 Xxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
3
or at such other addresses as shall be designated in writing as aforesaid by
either party to the other party hereto. Notices delivered in person shall be
effective on the date of delivery. Notices sent by United States Mail shall be
effective upon the date of actual receipt.
5. Assignment
The assignment by Employee of this Agreement or any interest herein, or of
any money due or to become due by reason of the terms hereof, without the prior
written consent of the Company, shall be void. This Agreement may be assigned by
the Company to any subsidiary or successor; provided, that in the event of any
such assignment, the Company shall obtain an instrument in writing from such
assignee assuming the obligations of the Company hereunder and shall deliver an
executed copy thereof to Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
have affixed their seals as of the date first above written.
COMPANY:
CHAPARRAL BOATS, INC.
By:
----------------------------
Xxxxxxx X. Xxxxxxx
Its: Vice President
(CORPORATE SEAL)
Attest or Witness:
By:
--------------------------------
Title:
-----------------------------
EMPLOYEE:
(SEAL)
------------------------------
Xxxxx X. Xxxx, Xx.
0
