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STRICTLY CONFIDENTIAL
EMPLOYMENT AGREEMENT
BETWEEN
XXXXX PRODUCTS COMPANY
AND
XXXXXXX X. XXXXXXXXXXXXX
THIS EMPLOYMENT AGREEMENT dated January 1, 1998 is made between Xxxxx
Products Company (the "Company"), a Delaware corporation, and Xxxxxxx X.
Xxxxxxxxxxxxx (the "Executive"). This Agreement is made with reference to the
following facts and objectives:
R E C I T A L S
A. The Executive shall be the Vice President - Customer Development of
the Company and has served the Company as an employee continuously during the
past four years;
B. The Executive acknowledges that the services previously provided by
him to the Company and the services to be performed by him under this Agreement
are of a special and unique character; the business of the Company is currently
international in scope and the Company has plans to continue to expand its
business throughout the world; and the Company competes with other persons that
are or could be located in any part of the world; and in order to assure the
Company that the Company will retain its value and the Company's business as a
going concern, it is necessary that the Executive undertake not to utilize his
special knowledge of the Company, its business and its relationships with
customers and suppliers to compete with the Company if the Executive were to
leave the Company.
C. The Executive further acknowledges that, during his employment to
date by the Company, he has occupied a position of trust and confidence with the
Company and, during such employment, the Company has compensated him, among
other purposes, to develop and preserve customer relationships and other
goodwill exclusively for the Company's benefit and that, as a result, he has
developed customer relationships and goodwill that are valuable and important to
the Company, and has become familiar with the Company's trade secrets,
including, without limitation, its profit margins, customer preferences and
requirements, and with other proprietary and confidential information concerning
the Company and its business.
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D. The Executive further acknowledges that, throughout his employment
under this Agreement, he is expected to continue to occupy a position of trust
and confidence with the Company. In return, the Company will continue to
compensate him, among other purposes, to develop and preserve customer
relationships and goodwill exclusively for the Company's benefit, which will be
valuable and important to the Company. Further, he will likely continue to be
familiar with the Company's trade secrets, including, without limitation, its
profit margins, customer preferences and requirements, and with other
confidential and proprietary information concerning the Company and its
business.
E. The Executive further acknowledges that the use by him for his own
benefit or that of others of such goodwill, trade secrets or proprietary and
confidential information or the solicitation of and/or doing business with any
of the Company's customers and potential customers would have a material adverse
effect on the Company and its business, and would place the Company at a
substantial competitive disadvantage.
F. The Executive further acknowledges that the agreements and covenants
contained in this Agreement, and, in particular, sections 6 (Non-Competition
Covenants) and 7 (Confidentiality and Proprietary Information), are essential to
protect the Company and the goodwill of the Company's business, are a condition
precedent to the Company's willingness to enter this Agreement and to pay the
consideration set forth in this Agreement, and are necessary and reasonable in
light of the particular business of the Company, his knowledge thereof and the
services he has previously performed and will perform under this Agreement.
THE PARTIES ACCORDINGLY AGREE AS FOLLOWS:
AGREEMENT
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby accepts employment by the Company, on the terms and
conditions of this Agreement.
2. EMPLOYMENT TERM
(a) Subject to section 9 (Termination of Employment), the term
of the Executive's employment under this Agreement begins on the date of this
Agreement and ends on the third anniversary of that date; provided, however,
that, commencing on the third anniversary of the date of this Agreement and each
subsequent anniversary, the term shall be extended for an additional one year
period unless either the Executive or the Company gives the other party written
notice at least thirty (30) days before such anniversary that this Agreement
shall terminate on the then scheduled expiration date (the "non-extension
notice"). If such non-extension notice is given, this Agreement shall
automatically terminate on such expiration date.
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(b) The actual term of the Executive's employment under this
Agreement, including any extension, continuation or earlier termination of the
original term, is referred to in this Agreement as the "employment term."
3. RESPONSIBILITIES. During the employment term, the Executive shall
serve as Vice President Customer Development, or in any other position or
capacity to which he may from time to time be elected or appointed, and shall
perform such services for the Company as are reasonably required by the Company,
and as may be required by virtue of the offices and positions held by the
Executive. The Executive agrees that, as a part of his duties under this
Agreement, he may be required from time to time to perform services for
affiliates of the Company. The Executive will not be required to relocate his
residence outside the continental United States, but will be available for such
travel as his responsibilities under this Agreement may reasonably require. The
Executive shall devote his full time and best efforts to the performance of all
responsibilities to the Company and its affiliates and to further their
respective businesses and interests.
4. COMPENSATION
(a) The Company agrees to pay the Executive throughout the
employment term an initial base salary at the rate of $133,333.00 per annum (as
adjusted pursuant to the provision of this paragraph 4(a)) (the "base salary")
payable in equal installments in accordance with Company payroll practices from
time to time in effect. Executive's base salary will be reviewed and may be
adjusted annually by the president of the Company or by the board of directors
of the Company (or the compensation committee thereof) (the "board"), after
taking into consideration the recommendations of the president of the Company,
provided that Executive's base salary may not be decreased below his initial
base salary.
(b) Subject to Section 9 (Termination of Employment), the Company
agrees to pay the Executive throughout the employment term an annual bonus (the
"annual bonus") calculated pursuant to Exhibit A attached hereto. The amount of
the annual bonus payable to the Executive shall be prorated for the portion of a
year the Executive is employed by multiplying the annual bonus determined
pursuant to Exhibit A by a fraction with a numerator equal to the number of days
of the fiscal year during which the Executive was employed, and with a
denominator of 365.
5. OTHER EXECUTIVE BENEFITS
(a) The Executive shall, during the employment term, be eligible to
participate in such pension, profit sharing, bonus, life insurance,
hospitalization and major medical and other employee benefit plans of the
Company in effect from time to time, to the extent that he is eligible under and
complies with the terms of those plans, but the allocation of benefits under any
plan that provides that allocations thereunder shall be in the discretion of the
board shall be as determined from time to time solely by the board in its
discretion.
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(b) The Executive shall also participate in the Company's paid
vacation plan but in no event shall Executive's annual entitlement be less than
4 weeks. Vacation not used by the end of a year shall be forfeited and shall not
be eligible to be carried over to another year or eligible for reimbursement
except as otherwise provided by Company policies.
6. NON-COMPETITION COVENANTS. Throughout the employment term and
commencing with the date of this Agreement and ending on the later of the end of
the period that Executive receives severance pay from the Company pursuant to
Section 9 or the first anniversary of the date on which the Executive ceases to
be employed by the Company for any reason whatsoever, (the "Non-Compete
Period"), the Executive promises and agrees that he will not: (a) directly or
indirectly assist in, engage in, have any financial interest in, or participate
in any way in, as an owner, partner, employee, agent, board member, or
shareholder, any business that involves, in whole or in part, the design,
manufacture, distribution or sale of dry pet foods (or any other business in
which the Company may engage or begin preparation to engage during the
employment term) or make preparation with any person to do any of the foregoing;
provided, however, that the Executive may own, solely as an investment, up to
1.0% of any class of securities of any person if such securities are listed on
any national or regional securities exchange; (b) call upon or have any contact
with any person or any successor in interest to any person who was at any time
during the Executive's last three years of employment with the Company, a
customer of the Company, or call upon or have any contact with any person or any
successor in interest to any person who is a prospective customer of the
Company, and with whom the Executive dealt, or on whose account the Executive
worked, at any time during the Executive's last three years of employment with
the Company, for the purpose of (i) diverting any business of such person from
the Company, or (ii) selling or offering to sell to any such customer any
product or service that is of the same general type or that performs similar
functions as any product or service which has been sold, provided or offered for
sale by the Company at any time during the Executive's last three years of
employment with the Company, (c) solicit any employee of the Company to
terminate his or her employment with the Company or employ any such individual
during his or her employment with the Company and for a period of twelve months
after such individual terminates his or her employment with the Company, or (d)
without the prior written consent of the Company's board of directors, acquire
or discuss the acquisition of any ownership interest in or warrant or right to
acquire any such interest, or acquire any employment or other pecuniary benefit
from any person that, at the time, is a prospective candidate for or was a party
to a control transaction. The term "control transaction" means any transaction
or series of transactions whereby the Company or a controlling interest in the
Company is acquired by another Person (whether by purchase, merger,
consolidation or sale of all or substantially all of the Company's consolidated
assets). The Executive acknowledges and agrees that the consideration and
benefits to be provided to the Executive under this Agreement have been
bargained and negotiated in exchange for, and in consideration of, Executive's
agreement to abide by the terms and provisions of this section 6 and section 7
(Confidentiality and Proprietary Information). The Executive acknowledges and
agrees that all of the Executive's duties and obligations under this section 6
shall survive the expiration or termination of the Executive's employment with
the Company, regardless of the causes therefor.
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7. CONFIDENTIALITY AND PROPRIETARY INFORMATION. In addition to any
common-law restriction upon the Executive's use, disclosure or exploitation of
confidential, proprietary or secret information of the Company, the Executive
covenants and agrees that, without prior written consent of the Company, he will
not at any time during or after the employment term use for himself or disclose
to or use for any other person, directly or indirectly, any secret, confidential
or proprietary information of the Company, including, without limitation, the
Company's processes, formulas, techniques, customer identities, preferences,
requirements, reports and other sensitive customer information, servicing
methods, profit margins, analyses, employee, vendor and supplier information,
business or marketing plans or strategies, financial data and presentation or
sales materials, technologies, computer programs, software, designs and
inventions (collectively, the "confidential information"); provided, however,
that the term confidential information does not include or refer to any
information that is in the public domain (other than by a breach of this
Agreement). The Executive acknowledges that the confidential information is
vital, sensitive, confidential and proprietary to the Company. The Executive
covenants and agrees that all files, reports, lists, materials, records,
documents, notes, memoranda, specifications, product or other formulas,
equipment and other items, and any originals, copies, recordings, abstracts or
notes thereof, relating to the confidential information or the Company business
that the Executive is or was either provided, prepares or prepared himself, uses
or used or simply acquires or acquired during this employment with the Company
(either before or during the employment term), are and shall remain the sole and
exclusive property of the Company and shall be immediately returned to the
Company at any time upon demand and, in all events, immediately at the end of
the employment term. The Executive acknowledges and agrees that all of the
Executive's duties and obligations under this section 7 shall survive the
expiration or termination of the Executive's employment with the Company,
regardless of the cause therefor.
8. REMEDIES FOR BREACH. In the event of a breach or threatened breach
of any of the Executive's duties and obligations under sections 6
(Non-Competition Covenants) or 7 (Confidentiality and Proprietary Information),
the Company shall be entitled, in addition to any other legal or equitable
remedies the Company may have in that connection (including any right to
damages that the Company may suffer), to a temporary, preliminary, and/or
permanent injunction restraining such breach or threatened breach. The
Executive hereby expressly acknowledges that the harm that might result to the
Company's goodwill or its relationships with customers, or as a result of the
disclosure or use of the confidential information, is largely irreparable. The
Executive specifically agrees that, in the event there is a question as to the
enforceability of sections 6 (Non-Competition Covenants) or 7 (Confidentiality
and Proprietary Information), the Executive will not engage in any conduct
inconsistent with or contrary to either of such sections until after the
question has been resolved by a non-appealable final judgement.
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9. TERMINATION OF EMPLOYMENT
(a) The employment term and the Executive's employment by the
Company shall terminate: (i) upon the death of the Executive; (ii) upon the
disability of the Executive (as defined in section 9(b)(2)) upon thirty (30)
days prior written notice given by the Company to the Executive; (iii) for cause
(as defined in section 9(b)(1)), immediately upon the giving of written notice
thereof by the Company to the Executive or at such later time as the notice may
specify; (iv) without cause, upon not less than thirty (30) days prior written
notice given by the Company to the Executive, or (v) voluntarily by the
Executive upon not less than thirty (30) days prior written notice given to the
Company by the Executive.
(b) In this section 9:
(1) "Cause" means; (a) the Executive has been indicted for or
convicted of a felony; (b) the commission of any act by
Executive constituting financial dishonesty against the Company
(including fraud or embezzlement); (c) gross dereliction of duty
to the Company (other than by reason of death or disability)
after Executive has been advised by the board of directors or
the Company's president of any such dereliction of duty (whether
of the same or similar nature) and has been given an opportunity
to correct his performance; (d) commission of an act involving
moral turpitude which (i) brings the Company into public
disrepute or disgrace, or (ii) causes material injury to the
customer relations, operations or the business prospects of the
Company; (e) the repeated refusal or failure by Executive to
follow the lawful directives of the board of directors or the
president of the Company; or (f) the material breach by
Executive of the provisions of this Agreement.
(2) "Disability" refers to any circumstances in which the
Executive, by reason of illness, incapacity or other disability,
has failed to perform his duties or fulfill his obligations
under this Agreement for a cumulative total of 180 days in any
12-month period.
(c) Upon the termination of the Executive's employment under the
Agreement, the employment term shall end and all rights of the Executive under
this Agreement shall terminate, except that the Executive shall nonetheless be
entitled to receive the following:
(1) If the termination occurs by reason of the death or
disability of the Executive, the Executive shall be entitled to
receive the base salary accrued through the date of termination
and annual bonus prorated through the date of termination.
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(2) If the termination is made by the Company without cause, or
as a result of the Company delivering a non-extension notice
(but not as a result of the Executive delivering a non-extension
notice to the Company), the Executive shall be entitled to
receive severance pay equivalent to his base salary and annual
bonus, if and as each would have been payable if the Executive
had not been so terminated, for the period commencing on the
first day after the date of termination and terminating on the
first anniversary of the date on which Executive ceases to be
employed by the Company. With respect to the annual bonus, for
the year in which the termination of employment occurred, the
Executive shall receive the annual bonus the Executive would
have been entitled to receive if the Executive had remained
employed for the entire year, and for the last calendar year in
which the executive is receiving severance payments, the
Executive shall receive a pro rata portion of the annual bonus
the Executive would have been entitled to receive if the
Executive had remained employed for the entire year with such
pro rata portion being equal to a fraction with a numerator
equal to the number of days of the fiscal year during which the
Executive receives severance pay and with a denominator of 365.
(3) If the termination is made by the Company without cause, or
as a result of the Company delivering a non-extension notice,
and such termination occurs after a control transaction whereby
Xxxxxxx Purina Company or any of its subsidiaries or affiliates
has acquired the Company, the Executive shall be entitled to
receive severance pay equal to his base pay and annual bonus,
with such amounts being calculated in the same manner as set
forth above, except that the annual bonus for each of such years
shall be 50% of the annual base salary at the time of
termination of employment, for the period commencing on this
first day after the date of termination and terminating on the
third anniversary of the date the Executive ceases to be
employed by the Company.
(4) If the termination is made by the Company for cause, or
voluntarily by Executive, the Executive shall be entitled to
receive his base salary through the date of termination. If any
termination for cause made by the Company is ever ultimately
determined by an court, agency or other tribunal to have been
without cause, then the Company's sole liability under the
Agreement or otherwise at law or in equity shall be to pay the
Executive those amounts that would have otherwise been paid to
the Executive under section 9(c)(2) (Termination of Employment,
without cause) and the reasonable attorney's fees and costs
incurred by the Executive in successfully obtaining this
determination from the court, agency or other tribunal.
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(5) To the extent permitted by law or group insurance plans
maintained for the Company's employees, Executive will be
entitled to continue coverage under any health, disability and
life insurance program during the period Executive is receiving
severance payments in accordance with paragraphs 9(c)(1) through
(4), at no cost to the Executive. The Executive's rights will
continue under benefit programs that, by their own terms or by
law, extend beyond the date of termination or continued coverage
provided for in the preceding sentence, including, without
limitation, health care under COBRA, pension, stock purchase or
stock option agreements, and non-qualified salary continuation
agreements.
10. NOTICE. Any notice required or permitted to be given under this
agreement must be in writing and is effectively given:
(1) To the Company, when signed by the Executive and delivered in
person to the chairman of the board, president, or secretary
(excluding the Executive) of the Company, or, one day after the
date sent by national commercial courier for next day delivery, or
two days after the date mailed, by certified or registered mail,
postage prepaid, in either case to the address set forth below, or
at such other address as the Company may designate for this purpose
in a notice given to the Executive.
Attn: Chief Executive Officer
Xxxxx Products Company
P.O. Box 000
Xxxx 00xx & Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
(2) To the Executive, when signed by an officer of the Company
(excluding the Executive) and delivered to the Executive in person,
or, one day after the date sent by national commercial courier for
next day delivery, or two days after the date mailed, by certified
or registered mail, postage prepaid, in either case to the address
set forth under the Executive's signature at the end of this
Agreement or at such other address as the Executive may designate
for this purpose in a notice given to the Company.
11. INVALIDITY OF PROVISIONS. If any provision of this Agreement is
adjudicated to be invalid or unenforceable under applicable law, the validity or
enforceability of the remaining provisions shall be unaffected. To the extent
that any provision of this agreement is adjudicated to be invalid or
unenforceable because it is over broad, that provision shall not be void but
rather shall be limited only to the extent required by applicable law and
enforced as so limited.
12. ENTIRE AGREEMENT; WRITTEN MODIFICATIONS. This Agreement contains
the entire agreement between the parties and supersedes all prior or
contemporaneous representations, promises, understandings and agreements
between the Executive and the Company. This Agreement may not be changed except
by written agreement of the parties.
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13. GOVERNING LAW. In light of the Company's contacts with the state of
Missouri and its significant interest in insuring that disputes as to the
validity and enforceability of section 6 (Non-Competition Covenants) and 7
(Confidentiality and Proprietary Information) of this Agreement are resolved on
a uniform basis, the Executive and the Company agree that any litigation
involving noncompliance with or alleged breach of sections 6 (Non-Competition
Covenants) or 7 (Confidentiality and Proprietary Information) must be filed and
conducted in Missouri and the Executive and the Company consent to the personal
jurisdiction of the federal and state courts sitting in Missouri for purposes of
any such litigation. This Agreement shall be governed by the internal laws of
the State of Missouri without regard to Missouri conflict of laws principles.
14. CERTAIN DEFINED TERMS. In this agreement:
(1) "Affiliate" of the Company means any person controlling,
controlled by or under common control with the Company.
(2) "Annual bonus" is defined in section 4(b).
(3) "Base salary" is defined in section 4(a).
(4) "Board" is defined in section 4(a).
(5) "Company" as used in sections 6 (Non-Competition Covenants)
and 7 (Confidentiality and Proprietary Information), includes
each affiliate of the Company for which the Executive performs
services at any time during his employment if the affiliate is
engaged in any business that involves, in whole or in part, the
design, manufacture, distribution or sale of dry pet foods (or
any other business in which the Company may engage or begin
preparation to engage during the employment term).
(6) "Control transaction" is defined in section 6(d).
(7) "Employment term" is defined in section 2(b).
(8) "Non-extension notice" is defined in section 2(a).
(9) "Person" includes any individual, trust, estate, business
trust, partnership, corporation, unincorporated association,
governmental entity, limited liability company and any other
juridical person.
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15. COMPANY'S AND EXECUTIVE'S RIGHT TO RECOVER COSTS. The Company and
the Executive undertake and agree that, if either party breaches or threatens to
breach any provision of this Agreement, the breaching party shall be liable for
reasonable attorneys' fees and costs incurred by the other party in enforcing
its rights under this Agreement.
16. RULE OF CONSTRUCTION. The rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be employed
in interpreting this Agreement.
17. TOLLING. In view of the parties' recognition and agreement that the
Company is entitled after the expiration or termination of the employment term
to certain limited protection from competition by the Executive, the Executive
and the Company agree that the running of the period set forth in section 6
(Non-Competition Covenants) shall be tolled during any period of time in which
the Executive violates that section.
18. SUCCESSORS AND ASSIGNS. The Company may assign this Agreement or
any right or interest under this Agreement to any person that hereafter becomes
an affiliate of the Company or to any person to which the Company sells all or
any substantial part of its assets and, in such event, the Company shall,
automatically upon the assignee's assumption of the Company's obligations
hereunder, be released from any such obligations. This Agreement shall inure to
the benefit of the Company, and its successors and assigns.
19. NONWAIVER OF RIGHTS. The Company's or the Executive's failure to
enforce at any time any of the provisions of this Agreement or to require at any
time performance by the other party of any of the provisions hereof shall in no
way be construed to be a waiver of such provisions or to affect either the
validity of this Agreement, or any part hereof, or the right of the Company or
the Executive thereafter to enforce each and every provision in accordance with
the terms of this Agreement.
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PLEASE NOTE: BY SIGNING THIS AGREEMENT, THE EXECUTIVE IS HEREBY CERTIFYING THAT
THE EXECUTIVE (A) RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING IT; (B) READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAD
SUFFICIENT OPPORTUNITY BEFORE SIGNING THIS AGREEMENT TO ASK ANY QUESTIONS THE
EXECUTIVE HAD ABOUT THIS AGREEMENT AND RECEIVED SATISFACTORY ANSWERS TO ALL SUCH
QUESTIONS; (D) UNDERSTANDS THE EXECUTIVE'S RIGHTS AND OBLIGATIONS UNDER THIS
AGREEMENT; AND (E) EXECUTED AND DELIVERED THIS AGREEMENT AT THE OFFICES OF THE
COMPANY IN JOPLIN, MISSOURI.
EXECUTED AND EFFECTIVE as of the date first written above.
WITNESS: XXXXX PRODUCTS COMPANY
/s/ Xxxxxxx Xxxxxxxxxxxxx /s/ Xxx X. Xxxxxxxx
---------------------------------- ------------------------------
Xxx X. Xxxxxxxx
President and CEO
WITNESS: EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxxxx
---------------------------------- ------------------------------
0000 Xxxxxxxxx Xx.
------------------------------
Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
------------------------------
City, State, Zip Code
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EXHIBIT A
XXXXX PRODUCTS COMPANY
ANNUAL BONUS PROGRAM
1. For each fiscal year of the Company during the employment term, the
board, after taking into consideration the recommendations of the president of
the Company, will establish objectives comprised of both corporate and
individual goals (each goal will be referred to herein as a "Target"), as well
as the percentage weighting (the "weight") that will apply to each Target,
wherein the sum of the weights shall equal 100%.
2. For the Company's 1998 fiscal year, the board will set an EBITDA
Target for the Company and its subsidiaries which will be weighted at 100% for
the calculation of the bonus payable under this program for the 1998 fiscal
year. The term "EBITDA" will have the same meaning as set forth in the DPC
Acquisition Corp. Option Agreements granted under the DPC Acquisition Corp. 1996
Stock Option Plan.
3. For purposes of computing the Executive's annual bonus, the bonus
will be equal to 50% of his base salary in effect at the end of the fiscal year
(the "base bonus") and the annual bonus will be computed by summing the
percentages earned for each Target, as determined by computing the sum of
paragraphs in 3(a) through 3(d) below for each Target that has been assigned a
weight, and then multiplying that sum times the base bonus.
(a) Where the actual performance exceeds 85% of the Target
for such fiscal year, Executive will receive 55% of the weight
assigned for the Target.
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(b) For each of the first full 15 percentage points by
which actual performance exceeds 85% of the Target, Executive will
receive 3% of the weight assigned for the Target. The maximum which
Executive may receive under this paragraph 3(b) cannot exceed 45% of
the weight assigned for the Target.
(c) For each of the first full 15 percentage points by which
the actual performance exceeds 100% of the Target, Executive will
receive 6% of the weight assigned for the Target. The maximum which
Executive may receive under this paragraph 3(c) cannot exceed 90% of
the weight assigned for the Target.
(d) For each full percentage point by which the actual
performance exceeds 115% of the Target, Executive will receive 9% of
the weight assigned for the target.
For illustrative purposes, assume the Executive's base bonus is $30,000
and his weighting is as follows:
Target Weight Description of Target
------ ------ ---------------------
1 50% Corporate EBITDA
2 35% Territory Margin Contribution
3 15% Expense Control
Bonus Calculation:
-----------------
Assumed % Earned Weighted
Target Performance for Target Weight % Earned
------ ----------- --------- ------ --------
1 95% 85% x 50% = 42.5%
2 120% 235% x 35% = 82.3%
3 80% 0 x 15% = 0
--------
% of base bonus earned 124.8%
Base bonus $30,000
Bonus earned $37,440
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4. In the event that, after the setting of the Targets, the Company or
any of its subsidiaries acquires additional assets, entities or subsidiaries
that produce the same or similar products, which acquisition, either singly or
together with one or more other acquisitions, the board determines in good faith
may significantly affect the Targets for the fiscal year, the board may, in good
faith, either (a) adjust such Targets to reflect the projected effect of such
acquisition or acquisitions on any Targets or (b) exclude the effects of such
acquisition or acquisitions on the Targets for purposes of determining
Executive's annual bonus by calculating the Targets for such fiscal year on a
pro forma basis as though such acquisition or acquisitions had not been
consummated. Similarly, in the event that, after setting the Targets, the
Company is acquired by another Person (whether by purchase, merger,
consolidation or sale of all or substantially all of the Company's consolidated
assets) and the board determines in good faith that such acquisition may
significantly affect the Targets for the fiscal year, the board may, in good
faith, either (x) adjust such Targets to reflect the projected effect of such
acquisition on any Target or (y) exclude the effects of such acquisition on the
Targets for purposes of determining Executive's annual bonus by calculating the
Targets for such fiscal year on a pro forma basis as though such acquisition had
not been consummated.
5. The annual bonus payable for any fiscal year will be paid within 30
days after the delivery of the Company's audited financial statements for such
fiscal year. In the event of any dispute between the Company and Executive as to
the amount of the bonus for any fiscal year, such dispute will be resolved by
the
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Company's auditors or any one of Price Xxxxxxxxxx, Xxxxxx Xxxxxxxx, or Xxxxx
& Xxxxx, or their successors, as selected by the board, by having such
accounting firm calculate the amount of the bonus for such fiscal year utilizing
the Company's audited financial statements for such fiscal year. The decision of
such accounting firm will be final and binding on the Company and Executive.
6. Except as otherwise provided herein, capitalized terms used herein
which are not defined herein have the meanings given to such terms under the
Employment Agreement to which this Annual Bonus Program is attached.
