EXHIBIT 10.1
Xxxx X. Xxxxx. Effective April 1, 2002, Mr. Xxxxx ceased being Vice President
and has entered into a revised two-year employment agreement, which is effective
April 1, 2002 and expires on April 1, 2004. Under his new employment agreement,
Mr. Xxxxx will be devoting time to acquisitions, strategic planning and other
key initiatives, as requested by the Chief Executive Officer or the Board of
Directors, on an as-needed basis. Mr. Xxxxx's base annual salary is currently
set at $250,000 and he is entitled to receive an incentive bonus, payable
quarterly, equal to 0.75% of our net earnings (before deducting the incentive
bonuses of executive officers) provided that our net earnings exceed stated
minimum amounts. The incentive bonus is paid in the form of either cash or
restricted stock at the election of Mr. Xxxxx. The restricted stock vests
quarterly over three years, subject to acceleration in certain circumstances.
Our net earnings did not exceed the minimum amounts for the quarter ended June
30, 2002, and therefore no bonus was paid to Mr. Xxxxx for this quarterly
period. The employment agreement also contains change of control (as defined in
the agreements) and non-compete provisions that, upon a change of control, would
result in payments to Mr. Xxxxx equal to three times his base salary and an
incentive bonus for the preceding four quarters (all payments are to be
grossed-up for the individuals' taxes) and would accelerate the vesting of all
unvested stock options and restricted stock. The employment agreement provides
that the Mr. Xxxxx will receive certain benefits if his employment is terminated
without cause. In the event Mr. Xxxxx's employment agreement is terminated
without cause, Mr. Xxxxx will receive a lump sum distribution consisting of (i)
the total amount of his base annual salary for the remainder of the agreement
term, and (ii) the total amount of incentive compensation payments, calculated
based on a defined formula, as if Mr. Xxxxx had not been terminated.
Additionally, all unvested stock options and restricted stock shares will become
fully vested.
