PERFORMANCE-BASED COMPENSATION AGREEMENT
Exhibit
10.1
PERFORMANCE-BASED
COMPENSATION
AGREEMENT
THIS
AGREEMENT, entered into as of this 23rd day of
January 2008, 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 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 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 and Chief Executive Officer
for a term of five years beginning November 3, 2007 and ending November 3, 2012
unless earlier terminated.
(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 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.
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(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: | ||
|
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
|
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.
-3-
COMPANY:
CHAPARRAL
BOATS, INC.
/s/ Xxxxxxx X.
Xxxxxxx
Xxxxxxx
X. Xxxxxxx
President
and Chief Executive Officer
Marine
Products Corporation
/s/ Xxxxx X. Xxxx, Xx.
Xxxxx X.
Xxxx, Xx.
President
and Chief Executive Officer
Chaparral
Boats, Inc.
Attest
or Witness:
By: /s/ Xxx
Xxxxxxx
Xxx
Xxxxxxx
Sales
Manager
Sales
Manager
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