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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 17th day of March, 1998, by and
between X.X. XXXXX, INC., a Texas corporation (hereinafter "Company"), and XXXX
X. XXXXX, an individual (hereinafter "Executive").
W I T N E S S E T H:
WHEREAS, on the date hereof, Osage Systems Group, Inc., a Delaware
public company ("Osage") acquired the Company pursuant to the terms of an
Agreement and Plan of Merger (the "Merger Agreement");
WHEREAS in connection with the Merger Agreement, Executive received the
Merger Consideration identified within Paragraph 1.3 of the Merger Agreement and
Executive agreed to remain employed as the President of the Company upon the
terms and conditions herein contained.
NOW, THEREFORE, in consideration of the mutual premises and covenants
of the parties contained within the Merger Agreement and in this Agreement, the
parties hereto, do hereby agree as follows:
1. Employment and Term.
A. The Company hereby employs Executive and Executive
hereby accepts employment by the Company as its President. Executive agrees to
serve the Company in such capacity, subject to the terms and conditions of this
Agreement, for a term, commencing on the date hereof and expiring three years
from that date of this Agreement (the "Term").
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2. Duties.
A. During the Term, Executive shall use his best efforts
to perform all duties required in furtherance of his position, including without
limitation all such duties as are customarily associated with such position or
as are assigned to him from time to time by the Board of Directors of the
Company.
B. Executive shall diligently and faithfully devote his
entire time, energy, skill, and best efforts to the performance of his duties
under this Agreement. Executive shall conduct himself at all times so as to
advance the best interests of the Company, and shall not undertake or engage in
any other business activity or continue or assume any other business
affiliations which conflict or interfere with the performance of his services
hereunder without the prior written consent of the Chairman of the Board of
Directors of the Company. Executive also agrees that he shall not usurp or
misappropriate, either to himself, or to any other person or entity, any
corporate or other opportunities that would otherwise be available to the
Company.
3. Compensation.
A. The Company shall pay Executive and Executive shall
accept, as his compensation for all services rendered to the Company pursuant
hereto, an annual salary of $100,000, to be paid in accordance with the general
payroll practices of the Company as from time to time in effect. Executive shall
also be entitled, subject to the terms and conditions of particular plans and
programs, to all fringe benefits afforded to other executives of Company in the
discretion of the Board of Directors, including, but not by way of limitation,
the right to participate in any pension, retirement, major medical, group
health, disability, accident and life
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insurance, and other employee benefit programs made generally available, from
time to time, by the Company.
B. Upon achievement of certain performance based
criteria identified on Schedule A, Executive shall receive annual incentive
compensation as identified on Schedule A for the first year of employment.
Bonuses in any subsequent years of employment may be granted to Executive in
accordance with the achievement of certain performance based criteria as shall
be determined by the Company at the beginning of each year.
C. Executive shall be entitled to a monthly automobile
allowance in such amount that is equal to the monthly lease payments as are due
and owing under Executive's current leasing arrangement on his Lexus automobile
(leasing account #___________); however, Executive shall continue to be
responsible for the payment of all insurance and maintenance on the leased
vehicle.
4. Vacations, Holidays, Sick Days.
A. Executive shall receive three (3) weeks of paid
vacation in each calendar year, to be taken at times which do not unreasonably
interfere with the performance of the Employee's duties hereunder and in no
event shall Executive schedule more than ten (10) consecutive days of vacation
during any three month period without the prior written consent of the Chairman
of the Board of Directors. Vacation pay shall be non-cumulative and to the
extent not taken shall not be compensated.
B. Executive shall be entitled to those holidays and
compensated sick leave days as are allowed for by the policy of the Company.
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5. Termination.
A. Executive's employment and rights to compensation
hereunder shall terminate immediately if Executive voluntarily leaves the
employment of the Company, except that the Company shall have the obligation to
pay Executive such portion of his base salary provided for in Section 3 hereof
as may be accrued but unpaid on the date Executive voluntarily leaves the
employment of the Company. In the event that Executive voluntarily leaves the
employment of the Company, he shall provide at least ninety (90) days' written
notice.
B. The Company may, upon written notice to Executive
giving the reasons therefor, terminate Executive's employment and his rights to
compensation hereunder for cause. As used herein, the term "cause" shall mean
the following: when the Company's results of operations produce "sales revenues"
or "pre-tax net income" less than those amounts identified on Schedule B hereto,
which is incorporated herein by this reference; conviction of Executive for any
felony, fraud, embezzlement or crime of moral turpitude, except for such conduct
relating to corporate activity to the extent that Executive would be entitled to
be indemnified by the Company for charges arising from such conduct; controlled
substance abuse or drug addiction; alcoholism which interferes with or affects
Executive's responsibilities to the Company or which reflects negatively upon
the integrity or reputation of the Company; gross negligence which is materially
injurious to the Company; any violation of any express written directions or any
reasonable written rule or regulation established by the Company's Board of
Directors from time to time, and consistent with industry standards, regarding
the conduct of its business, which violation has not been cured to the Company's
satisfaction within thirty (30) calendar days of the
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dispatch of written notice to the Executive of the violation; or any violation
by the Executive of any material term or condition of this Agreement. If
Executive is terminated for cause as provided above, Executive's employment and
rights to compensation hereunder shall terminate immediately upon receipt of
written notice, except that the Company shall have the obligation to pay
Executive such portion of his base salary as may be accrued but unpaid on the
date his employment is terminated.
C. If Executive's employment is terminated during the
Term hereof for reasons other than those provided in Subsections 5.A. or 5.B.,
above, Executive shall be entitled to his regular compensation for the balance
of the Term, consisting of:
(1) payment of one hundred percent (100%) of
Executive's monthly base salary payable at regular intervals in accordance with
the Company's normal payroll practices; and
(2) continuation of health insurance and fringe
benefits as set forth herein through the remainder of the Term.
During the period in which payments are made to Executive
pursuant to this Section 5.C., Executive shall remain subject to the limitations
identified in Section 6 hereafter.
6. Confidentiality and Related Matters.
A. Acknowledgment of Nature and Value of Confidential
Information: Executive recognizes and acknowledges: (a) that in the course of
Executive's employment by the Company it will be necessary for Executive to
acquire, in a fiduciary capacity of trust, information which could include, in
whole or in part, but is not limited to: information
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concerning the Company's rate schedules; rate quotations; the names, addresses,
credit terms and nature of services provided by the vendors utilized by the
Company; the names, addresses, credit terms and nature of services provided to
customers of the Company; the identity of the Company's suppliers, sales
representatives, shippers or other entities with whom Executive has come into
contact as a result of his employment with the Company, or which should
otherwise come into his knowledge during the term of this Agreement; the
salaries, skills, education or abilities of the Company's employees; the
Company's sales, sales volume, sales methods and sales proposals; the identities
of the Company's customers and/or prospective customers; the identities of key
purchasing personnel in the employ of customers and prospective customers; the
amounts and/or kinds of customers' purchases from the Company; the Company's
sources of information and supply; the Company's computer programs, system
documentation, special hardware or software, service or product hardware or
software, and related software or hardware development; the Company's manuals,
formulae, processes, methods, machines, compositions, ideas, improvements,
inventions or other information or materials relating to the Company's affairs
(collectively referred to herein as the "Confidential Information"); (b) that
the Confidential Information is the property of the Company and constitutes a
major asset of the Company; (c) that the use, misappropriation or disclosure of
the Confidential Information would constitute a breach of trust and could cause
irreparable injury to the Company; and (d) that it is essential to the
protection of the Company's goodwill and to the maintenance of the Company's
competitive position that the Confidential Information be kept secret and that
Executive neither
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disclose the Confidential Information to others nor use the Confidential
Information to Executive's own advantage or to the advantage of others.
B. Acknowledgment of Necessity for Protections of
Company's Business. Executive further recognizes and acknowledges that it is
essential for the proper protection of the business of the Company, particularly
in view of the recent acquisition of the Company by Osage, that Executive be
restrained: (a) from soliciting or inducing any employee of the Company to leave
the employ of the Company; (b) from hiring or attempting to hire any employee of
the Company; (c) from soliciting the trade of, or trading with, the customers or
suppliers of the Company for any business purpose other than that of the
Company; and (d) from competing against the Company for a reasonable period of
time and within a reasonable geographic area following the termination or
nonrenewal of Executive's employment with the Company, as more fully addressed
in Section 6.F., below.
C. Work Made For Hire. Executive further recognizes and
understands that Executive's duties at the Company may include the preparation
of materials, including without limitation written or graphic materials, and
that any such materials conceived or written by Executive shall be done as "work
made for hire" as defined and used in the Copyright Act of 1976, 17 U.S.C.
Sections 1 et seq. In the event of publication of such materials, Executive
understands that since the work is a "work made for hire", the Company will
solely retain and own all rights in said materials, including right of
copyright.
D. Non-Disclosure of Confidential Information. In
recognition and consideration of the recent acquisition of the Company by Osage
and Executive's employment,
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compensation and fringe benefits, the information which the Company will give
Executive regarding the Company's business, the Executive's introduction to the
Company's customers and prospective customers made in the course of Executive's
employment with the Company, and the carefully-guarded methods of doing business
which the Company utilizes and deems crucial to the successful operation of its
business, Executive agrees to hold and safeguard the Confidential Information in
trust and in a fiduciary capacity for the Company, its successors and assigns.
Executive expressly agrees that he shall not, without the prior written consent
of the Company, misappropriate or disclose or make available to anyone for use
outside the Company's organization at any time, either during Executive's
employment with the Company or subsequent to the termination or nonrenewal of
such employment with the Company, for any reason, including without limitation
termination by the Company for cause or without cause, any of the Confidential
Information, whether or not developed by Executive, except as required by the
Company in the performance of Executive's duties to the Company.
E. Disclosure of Works and Inventions/Assignment of
Patents. In consideration of the promises set forth herein, Executive agrees to
disclose promptly to the Company, or to such person whom the Company may
expressly designate for this specific purpose (its "Designee"), any and all
works, inventions, discoveries and improvements authored, conceived or made by
Executive during the period of employment and related to the business or
activities of the Company, and Executive hereby assigns and agrees to assign all
of Executive's interest in the foregoing to the Company or to its Designee.
Executive agrees that, whenever he is requested to do so by the Company,
Executive shall execute any and all applications,
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assignments or other instruments which the Company shall deem necessary to apply
for and obtain Letters Patent or Copyrights of the United States or any foreign
country or to otherwise protect the Company's interest therein. Such obligations
shall continue beyond the termination or nonrenewal of Executive's employment
with respect to any works, inventions, discoveries and/or improvements that are
authored, conceived of, or made by Executive during the period of Executive's
employment, and shall be binding upon Executive's successors, assigns,
executors, heirs, administrators or other legal representatives.
F. Restrictions on Competition. Executive covenants and
agrees that, for and in consideration of the compensation received hereunder and
the Merger Consideration, the sufficiency and receipt of which is hereby
acknowledged, during the period of Executive's employment hereunder and/or the
period during which payments are made pursuant to Section 5.C. hereof, and for a
period of one (1) year thereafter, Executive shall not, within a 200-mile radius
of any of the places of business of Osage or any of its subsidiaries and
affiliates (including the Company which is a wholly-owned subsidiary of Osage)
engage, directly or indirectly, whether as principal or as agent, officer,
director, employee, consultant, shareholder, or otherwise, alone or in
association with any other person, corporation or other entity, in any
"Competing Business". For purposes of this Agreement, the term "shareholder"
shall exclude any interest owned by Executive in a public company to the extent
the Executive owns less than five percent (5%) of any such company's outstanding
common stock or has an investment in such company of less than $250,000. For the
further purposes of this Agreement, the term "Competing Business", shall mean
any person, corporation or other entity that is engaged in a
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business that competes with, or is similar to, the business of the Company at
the time of such termination or nonrenewal; provided, however, in order to be
construed as a "Competing Business", such person, corporation or other entity
must be engaging in a competitive business that acquires at least fifty (50%)
percent or more of its products/services for resale from: (i) Sun Microsystems,
Inc. ("SUN") or any affiliate, predecessors or successors of Sun; or (ii) any
aggregators, distributors or wholesalers who acquire products from, or are
acting as agents for, Sun, or any affiliates, predecessors or successors of Sun;
or (iii) any manufacturers, aggregators, distributors or wholesalers who at the
time of such termination or nonrenewal, provide the Company with at least fifty
(50%) percent of its products/services for resale.
G. Executive's Abilities. Executive represents that
Executive's experience and capabilities, and the limited provisions of the
immediately-preceding Section 6.F, are such that he will not be prevented from
earning his livelihood in businesses similar to the Company, other than the
"Competing Business," as specifically defined in the immediately preceding
Section 6.F. Executive acknowledges that there are a significant number of
businesses for which his qualifications and experience would render him
qualified for employment that are within the 200 mile radius referred to in
Section 6.F. that do not constitute a "Competing Business" such that his ability
to become employed after the termination or nonrenewal of this Agreement would
not be impaired.
H. Non-Solicitation of Customers and Suppliers.
Executive agrees that during the course of his employment with the Company
(including the period during which payments are made pursuant to Section 5.C.
hereof), and for a period of one (1) year thereafter,
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he shall not, directly or indirectly, solicit the trade of, or trade with, any
past, present or prospective customer or supplier of the Company for any
business purpose that competes with the business being undertaken by Osage or
any of its subsidiaries and affiliates (including the Company which is a
wholly-owned subsidiary of Osage).
I. Non-Solicitation of Employees. Executive agrees that,
during his employment with the Company and for one (1) year following any
termination or nonrenewal of Executive's employment with the Company, including,
without limitation, termination by the Company for cause or without cause,
Executive shall not, directly or indirectly, solicit or induce, or attempt to
solicit or induce, any employee of the Company to leave the Company for any
reason whatsoever, or assist or participate in the hiring of any employee of the
Company to work for another entity.
J. No Prior Agreements. Executive represents and
warrants that Executive is not a party to or otherwise subject to or bound by
the terms of any contract, agreement or understanding which in any manner would
limit or otherwise affect Executive's ability to perform his obligations
hereunder, including without limitation any contract, agreement or understanding
containing terms and provisions similar in any manner to those contained in this
Section 6. Executive further represents and warrants that his employment with
the Company will not under any circumstances require him to disclose or use any
confidential information belonging to prior employers or other persons or
entities, or to engage in any conduct which may potentially interfere with the
contractual, statutory or common-law rights of such other employers, persons or
entities. In the event that Executive knows or learns of any facts
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whatsoever which suggest that such interference might arguably occur as the
result of any proposed actions by either Executive or the Company, Executive
expressly promises that he will immediately bring such facts to the Company's
attention.
K. Remedies. In the event of a breach by Executive of
any of the terms of this Agreement, the Company shall be entitled, if it shall
so elect, to institute legal proceedings to obtain damages for any such breach,
or to enforce the specific performance of this Agreement by Executive and to
enjoin Executive from any further violation of this Agreement, and to exercise
such remedies cumulatively or in conjunction with all other rights and remedies
provided by law. Executive acknowledges and agrees that money damages for any
breach by him of any of the provisions of this Agreement may be inadequate to
compensate the Company for the injuries it may suffer as the result of any such
breach, and accordingly that the Company shall be entitled to injunctive relief
against Executive, in addition to money damages, in the event of any such breach
by Executive.
L. Review by Counsel. Executive expressly acknowledges
and represents that Executive has been given a full and fair opportunity to
review this Agreement with an attorney of Executive's choice, and that Executive
has satisfied himself, with or without consulting with counsel, that the terms
and provisions of this Agreement, specifically including, but not limited to,
the restrictive covenant and related provisions of Section 6 hereof, are
reasonable and enforceable.
M. Return of Materials. Upon the termination or
nonrenewal of Executive's employment with the Company for any reason, including
without limitation termination by the
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Company for cause or without cause, or at any time upon demand, Executive shall
promptly deliver to the Company all Company property and materials, including
without limitation all documents or other materials constituting, containing,
referencing or relating to the "Confidential Information" referred to in this
Section 6, and any other Company property of any nature whatsoever, including
without limitation correspondence, computer disks or other electronically-stored
information, drawings, blueprints, manuals, letters, notes, notebooks, reports,
flow-charts, programs, proposals and any documents concerning the Company's
customers, or concerning services, products or processes provided by or to, or
used by, the Company.
N. Company-Created Materials. All material that may be
furnished to the Executive, together with literature, rate schedules, customer
lists, forms, filing systems and any other property, documents or other
materials furnished or made available by the Company to the Executive, shall be
and remain the property of the Company, and shall be returned by the Executive
to the Company upon any termination or nonrenewal of employment or at any time
upon demand.
O. Executive-Created Materials. All material created by
the Executive during the term of his employment with the Company which is
incidental to or related in any way to the Executive's employment, or to the
Company's business, shall be the property of the Company, and shall be delivered
to the Company upon any termination or nonrenewal of Executive's employment or
at any time upon demand.
P. Definitions. For purposes of this Section 6, the
term, "material(s)" shall include, but shall not be limited to, data stored in
computers, voicemail or any other electronic,
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magnetic, or mechanical storage device, any passwords, codes or keys required to
access all or any portion of such material, and the "Confidential Information"
referred to in Section 6.A. hereof.
7. Conflict of Interest.
Executive covenants that, during the Term, he will disclose to
the Company, in writing, any and all interests he may have, whether for profit
or compensation or not, in any venture or activity which could potentially
interfere with his ability to perform under this Agreement or create a conflict
of interest for him with the Company. For purposes of this paragraph 7 only,
"conflict of interest" shall mean ownership of greater than five percent (5%)
of, or $300,000 worth of equity in, another company which conducts business
similar to that undertaken by the Company.
8. Notices.
All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, at the following addresses or to such other
address as either party may designate by like notice:
A. If to Executive, to:
Xxxx X. Xxxxx
[INSERT ADDRESS.]
B. If to Company, to:
X.X. Xxxxx, Inc.
C/o Osage Computer Group, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
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Xxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxxxx
C. In all cases, copies to:
Xxxxxxxx Ingersoll Professional Corporation
00 Xxxx Xxxxxx, 00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xx. 00000
Attn: Xxxxxxx X. Xxxxx, Esquire
9. Basic Indemnification.
Company shall indemnify and defend Executive and his heirs,
executors and administrators against any costs or expense (including reasonable
attorneys' fees and amounts paid in settlement, if such settlement is approved
by the Company), fine, penalty, judgment and liability reasonably incurred by or
imposed upon Executive in connection with any action, suit or proceeding, civil
or criminal, to which Executive may be made a party or with which Executive
shall be threatened, by reason of Executive's being or having been an Officer,
unless with respect to such matter Executive shall have been adjudicated in any
proceeding not to have acted in good faith or in the reasonable belief that the
action was in the best interests of the Company, or unless such indemnification
is precluded by law, public policy, or in the judgment of the Company's Board of
Directors, such indemnification is being sought as a result of actions of
Executive which were either: (i) grossly negligent; (ii) reflective of Executive
misconduct; (iii) in violation of rules, regulations or laws applicable to the
Company; or (iv) in disregard of Company policies.
10. Additional Provisions.
A. This Agreement, including without limitation its
confidentiality, restrictive covenant and related provisions, shall inure to the
benefit of, and be binding upon, the Company
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and its successors and assigns and Executive, his heirs, executors,
administrators and legal representatives, subject to the provisions of Section
10.F. hereof, which expressly prohibits the assignment or delegation of any of
Executive's personal rights or obligations hereunder.
B. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and cannot be
modified orally. This Agreement supersedes all prior and contemporaneously-made
written or oral agreements between the parties relating to the subject matter
hereof. No modification or waiver of any of the provisions hereof shall be
effective unless set forth in a writing that specifically states that it is
intended to be a modification of this Agreement and that is signed by the
President of the Company.
C. If any provision(s) of this Agreement shall be or
shall become illegal or unenforceable in whole or in part, for any reason
whatsoever, the remaining provisions shall nevertheless be deemed valid, binding
and subsisting, and any invalid or unenforceable provision(s) shall be deemed
modified to the least extent possible so as to make them valid and enforceable
and so as to give the maximum effect allowable by law to the parties' original
intent as expressed by the terms hereof.
D. No failure on the part of the Company to exercise,
and no delay by the Company in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise by
the Company of any right, power or remedy hereunder, preclude any other or
further exercise thereof, or the exercise of any other right, power or remedy by
the Company.
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E. "Person" as used herein shall mean a natural person,
joint venture, corporation, partnership, trust, estate, sole proprietorship,
governmental agency or authority or other juridical entity.
F. This is a personal services contract and the rights
and obligations set forth herein may not be assigned or delegated by Executive,
except as otherwise specifically provided in this Agreement with respect to
benefits payable upon Executive's disability or death, without the express,
written consent of the Company.
G. The headings of the several sections of this
Agreement have been inserted for convenience of reference only and shall in no
way be used to restrict, modify, or explain any of the terms or provisions
hereof.
H. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard to
its, or any other sovereignty's, conflicts of laws principles. The parties agree
that any claims brought pursuant to this Agreement shall be brought in a court
of competent jurisdiction located in Phoenix, Arizona.
I. Tolling Period. The non-competition, non-disclosure
and non-solicitation obligations contained in Section 6 of this Agreement shall
be extended by the length of time during which Executive shall have been in
breach of any of the provisions of such Section 6, regardless of whether the
Company knew or should have known of such breach.
J. Company Violation Not a Defense. In an action by the
Company to enforce any provision of this Agreement, any claims asserted by
Executive against the Company shall not constitute a defense to the Company's
action.
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K. Construction. This Agreement shall be construed
according to the plain meaning of its terms, and not strictly for or against
either party hereto.
L. Counterparts. This Agreement may be executed in
counterparts, and the counterparts, taken together, shall constitute the entire
Agreement. The Agreement may further be executed by facsimile transmission, and
the facsimile signatures may be deemed original signatures for all purposes,
including for purposes of the Best Evidence Rule and all other rules or
doctrines of similar effect.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.
IMPORTANT NOTICE: THIS AGREEMENT RESTRICTS EXECUTIVE'S RIGHTS TO OBTAIN
OTHER EMPLOYMENT FOLLOWING HIS EMPLOYMENT WITH THE COMPANY. BY SIGNING
IT, EXECUTIVE ACKNOWLEDGES THIS FACT, AND FURTHER ACKNOWLEDGES THAT HE
HAS BEEN ADVISED BY THE COMPANY TO READ THE AGREEMENT CAREFULLY, AND/OR
TO CONSULT WITH COUNSEL OF HIS CHOICE CONCERNING THE LEGAL EFFECTS OF
SIGNING THE AGREEMENT, PRIOR TO SIGNING IT.
X.X. XXXXX, INC.
By: Xxxx X. Xxxxx
________________________________ Dated:______________________________
Chairman, Board of Directors
XXXX X. XXXXX
By: Xxxx X Xxxxx
________________________________ Dated:______________________________
Xxxx X. Xxxxx, as Executive
WITNESS:
___________________________________
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SCHEDULE "A"
Executive shall be entitled to receive and Company agrees to pay to
Executive, an incentive bonus (the "Incentive Bonus") based upon the
satisfaction in full, or partially, of the following objectives:
1) If during the first quarter commencing April 1, 1998 (the "Commencement
Date"), Company completes the development and packaging of a
proprietary service offering(s) for "Systems and Network
Interoperability" (the "Proprietary Services") pursuant to applicable
guidelines of Osage Computer Systems, Inc. ("Osage"), Executive shall
at the end of such quarter earn $10,000 of the Incentive Bonus.
2) If prior to the end of the third quarter following the Commencement
Date, the Company has completed the sale and delivery of 16 consulting
engagements based upon the Proprietary Services, Executive shall at the
end of such third quarter, earn an aggregate of $10,000 (i.e. $625 per
engagement) of the Incentive Bonus.
3) If prior to the end of the third quarter following the Commencement
Date, Executive has completed the sale and delivery of an additional 6
consulting engagements based upon the Proprietary Services into
geographic territories covered by other Osage offices, Executive shall
at the end of such third quarter earn an aggregate of $5,000 (i.e. $833
per engagement) of the Incentive Bonus.
4) If prior to the end of the third quarter following the Commencement
Date, Executive has completed the sale and delivery of 2 consulting
engagements based upon the Proprietary Services from other Osage
offices into the geographic territory covered by Company, Executive
shall at the end of such third quarter earn an aggregate of $5,000
(i.e. $2,500 per engagement) of the Incentive Bonus.
5) Executive shall earn an Incentive Bonus equal to 4.5% of the gross
profits generated on service delivered by the Company during the first
year following the Commencement Date. The Incentive Bonus earned during
each month of the year shall be paid to the Executive in accordance
with the established guidelines of the Company with regard to the
payment of commissions.
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SCHEDULE "B"
1) During the first year following the Commencement Date (as defined in
Schedule "A"), the Company shall have generated "sales revenues" of
less than $6.0 million or shall have incurred a cumulative net loss for
the year.
2) During the second year following the Commencement Date, the Company
shall have during any two (2) consecutive quarters, generated "pre-tax
net income" of less than $100,000.
3) During the third year following the Commencement Date, the Company
shall have during any two (2) consecutive quarters, generated "pre-tax
net income" of less than $150,000.
For the purposes hereof, the terms "sales revenues" and "pre-tax net
income" shall have the meanings ascribed thereto in paragraph 1.3(b) of the
Agreement and Plan of Merger by and among Pacific Rim Entertainment, Inc., Xxxxx
Acquisition Corp., X.X. Xxxxx, Inc. and Xxxx X. Xxxxx.
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