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EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into
this 1st day of July, 1997, to be effective on July 1, 1997 (the "Effective
Date"), by and between MiliRisk, Inc., a Texas corporation ("Employer"), and
Xxxxx X. Xxxxxx, a resident of Texas ("Employee").
W I T N E S S E T H:
WHEREAS, Employer is a corporation engaged in business in the State of
Texas and throughout the United States;
WHEREAS, Employer desires to employ Employee in the capacity of
Executive Vice President and Chief Financial Officer, upon the terms and
conditions hereinafter set forth; and
WHEREAS, Employee is willing to enter into this Agreement with respect
to his employment and services upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, Employer hereby employs Employee and Employee
hereby accepts such employment upon the terms and conditions hereinafter set
forth:
1. Term of Employment. The term of employment under this Agreement
shall be for a period of three (3) years, commencing on the Effective Date and
terminating on June 30, 2000, unless such employment is terminated or extended
prior to the expiration of said period as hereinafter provided.
2. Duties of Employee. Employee agrees that during the term of this
Agreement, he will devote his full professional and business-related time,
skills and best efforts to the businesses of Employer in the capacity of
Executive Vice President and Chief Financial Officer, or such other capacity as
Employer and Employee may agree upon. If there are major significant changes in
the duties or responsibilities of Employee from those listed as Prohibited
Activities on Exhibit A attached hereto, that are not mutually agreed upon,
Employee may terminate his employment within sixty (60) days of any such
change. In addition, Employee shall devote all necessary time and his best
efforts in the performance of any other duties as may be assigned to him from
time to time by the Board of Directors of Employer including, but not limited
to, serving on Employer's Board of Directors if elected. Employee shall devote
his full professional and business skills to Employer as his primary
responsibility. Employee may engage in personal, passive investment activities
provided such activities do not interfere with the performance of his duties
hereunder and violate the noncompetition and nondisclosure provisions set forth
herein.
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3. Compensation.
(a) Base Salary. Employer shall pay Employee an annual base salary
of one hundred fifteen thousand dollars ($115,000) per annum (or
fraction for portions of a year). Such base salary will be adjusted
from time to time in accordance with then current standard salary
administration guidelines of Employer. Employee's salary shall be
subject to all appropriate federal and state withholding taxes and
shall be payable in accordance with the normal payroll procedures of
Employer.
(b) Annual Bonus. In addition to the salary set forth in Section
3(a) hereof, Employee shall receive a bonus each year during the term
of this Agreement in an amount equal to a percentage of a certain net
income target set for each year as established annually in an annual
planning session. If 100% or more of such annual target is achieved in
any year, Employee shall receive in such year a bonus of 50% of his
base salary (the "Maximum Bonus"). If less than 100% of such target is
achieved in any year, Employee shall receive in such year a bonus of a
certain percentage of the Maximum Bonus as determined in accordance
with Schedule 3(b) attached hereto.
(c) Stock Options. Employee shall be granted stock options for
shares of common stock of Employer pursuant to the terms of a Stock
Option Agreement granted under the MiliRisk, Inc. 1997 Stock Option
Plan, as amended, a copy of which has been provided to Employee. The
number of shares of common stock, exercise price and date of grant for
such options is set forth on Schedule 3(c) attached hereto.
(d) Automobile Allowance. During the term of this Agreement,
Employer shall provide Employee with a monthly automobile allowance of
six hundred and fifty dollars ($650.00). Such allowance shall be paid
by Employer to Employee on the first workday of each month or on such
other day during the month as Employer and Employee shall mutually
determine.
4. Fringe Benefits. The terms of this Agreement shall not foreclose
Employee from participating with other employees of Employer in such fringe
benefit or incentive compensation plans as may be authorized and adopted from
time to time by Employer; provided, however, that Employee must meet any and
all eligibility provisions required under said fringe benefit or incentive
compensation plans. Employee may be granted such other fringe benefits or
perquisites as Employee and Employer may from time to time agree upon.
5. Vacations. Employee shall be entitled to the number of paid
vacation days in each calendar year as shall be determined by the Board of
Directors of Employer from time to time. In no event, however, shall Employee
be entitled to less than four weeks paid vacation during each calendar year.
6. Reimbursement of Expenses. Employer recognizes that Employee will
incur legitimate business expenses in the course of rendering services to
Employer hereunder.
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Accordingly, Employer shall reimburse Employee, upon presentation of receipts
or other adequate documentation, for all necessary and reasonable business
expenses incurred by Employee in the course of rendering services to Employer
under this Agreement.
7. Working Facilities. Employee shall be furnished an office, personal
secretary and such other facilities and services suitable to his position and
adequate for the performance of his duties, which shall be consistent with the
policies of Employer.
8. Termination. The employment relationship between Employee and
Employer created hereunder shall terminate before the expiration of the stated
term of this Agreement upon the occurrence of any one of the following events:
(a) Death or Permanent Disability. The death or permanent
disability of Employee. For the purpose of this Agreement, the
"permanent disability" of Employee shall mean Employee's inability,
because of his injury, illness, or other incapacity (physical or
mental), to perform the essential functions of the position
contemplated herein, with or without reasonable accommodation to
Employee with respect to such injury, illness or other incapacity, for
a continuous period of 150 days or for 180 days out of a continuous
period of 360 days. Such permanent disability shall be deemed to have
occurred on the 150th consecutive day or on the 180th day within the
specified period, whichever is applicable.
(b) Termination for Cause. The following events, which for purposes
of this Agreement shall constitute "cause" for termination:
(1) The willful breach by Employee of any provision of Sections
2, 11, 12, or 13 hereof (including but not limited to a refusal to
follow lawful directives of the Board of Directors of Employer)
after notice to Employee of the particular details thereof and a
period of 10 days thereafter within which to cure such breach and
the failure of Employee to cure such breach within such 10 day
period;
(2) Any act of fraud, misappropriation or embezzlement by
Employee with respect to any aspect of Employer's business;
(3) The illegal use of drugs by Employee during the term of
this Agreement that, in the determination of the Board of Directors
of Employer, substantially interferes with Employee's performance
of his duties hereunder;
(4) Substantial failure of performance by Employee that is
repeated or continued after 30 day written notice to Employee of
such failure and that is reasonably determined by the Board of
Directors of Employer to be materially injurious to the business or
interests of Employer and which failure is not cured by Employee
within such 30 day period; or
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(5) Conviction of Employee by a court of competent jurisdiction
of a felony or of a crime involving moral turpitude.
Any notice of discharge shall describe with reasonable specificity
the cause or causes for the termination of Employee's employment, as
well as the effective date of the termination (which effective date
may be the date of such notice). If Employer terminates Employee's
employment for any of the reasons set forth above, Employer shall have
no further obligations hereunder from and after the effective date of
termination (other than as set forth below) and shall have all other
rights and remedies available under this or any other agreement and at
law or in equity.
(c) Termination by Employee with Notice. Employee may terminate
this Agreement without liability to Employer arising from the
resignation of Employee upon one (1) year written notice to Employer.
Employer retains the right after proper notice of Employee's voluntary
termination to require Employee to cease employment immediately;
provided, however, in such event, Employer shall remain obligated to
pay Employee his salary during the one (1) year notice period or the
remaining term of this Agreement, whichever is less. During such one
(1) year notice period, Employee shall provide such consulting
services to Employer as Employer may reasonably request and shall
assist Employer in training his successor and generally preparing for
an orderly transition.
(d) Termination by Employer with Notice. Employer may terminate
this Agreement at any time upon one (1) year written notice to
Employee; provided, however, upon such notice Employee shall not be
required to perform any services for Employer other than during the
period of three (3) months immediately following the receipt of such
notice of termination in which Employee shall assist Employer in
training his successor and generally preparing for an orderly
transition.
9. Compensation Upon Termination.
(a) General. Upon the termination of Employee's employment under
this Agreement before the expiration of the stated term hereof for any
reason, Employee shall be entitled to (i) the salary earned by him
before the effective date of termination, as provided in Section 3(a)
hereof, prorated on the basis of the number of full days of service
rendered by Employee during the year to the effective date of
termination, (ii) any accrued, but unpaid, vacation or sick leave
benefits, (iii) any authorized but unreimbursed business expenses, and
(iv) any accrued, but unpaid annual bonus.
(b) Termination For Other Than Cause. If such termination is the
result of the discharge of Employee by Employer for any reason other
than (i) his death or permanent disability, (ii) by Employer or
Employee with notice pursuant to Section 8(d) or 8(c), respectively,
or (iii) for cause (as defined in Section 8(b) hereof), then Employee
shall be entitled to receive as a severance payment an amount equal to
the salary (excluding bonuses) that Employee would have received for
the remainder of the term
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of this Agreement in accordance with the regular payroll periods
during the remainder of the term of this Agreement. If Employee's
employment hereunder terminates because of the death of Employee, all
amounts that may be due to him under the terms of this Agreement
shall be paid to his administrators, personal representatives, heirs
and legatees, as may be appropriate.
(c) Termination For Cause. If the employment relationship hereunder
is terminated by Employer for cause (as defined in Section 8(b)
hereof), Employee shall not be entitled to any severance compensation,
except as provided in Section 9(a) above.
(d) Termination by Employer with Notice. If the employment
relationship is terminated by Employer other than for cause or the
permanent disability of Employee, then Employee shall be entitled to
receive as a severance payment and as compensation for all services
performed hereunder pursuant to Section 8(d) hereof an amount equal to
the salary that Employee would have received for the remainder of the
term of this Agreement or one (1) year, whichever is less, in
accordance with the regular payroll periods of Employer during the
applicable period.
(e) Termination by Employee with Notice. If the employment
relationship is terminated by Employee pursuant to the provisions of
Section 8(c) hereof, Employee shall be entitled to receive as a
severance payment and as compensation for all services performed
hereunder pursuant to Section 8(c) hereof the salary that Employee
would have received for the remainder of the term of this Agreement or
one (1) year, whichever is less, in accordance with the regular
payroll period of Employer during the applicable period.
(f) Survival. The provisions of Sections 9, 11, 12, and 13 hereof
shall survive the termination of the employment relationship hereunder
and this Agreement to the extent necessary or reasonably appropriate
to effect the intent of the parties hereto as expressed in such
provisions.
10. Other Agreements. This Agreement shall be separate and apart from,
and shall be deemed to alter the terms of, any executive compensation
agreements, deferred compensation agreements, bonus agreements, general
employment benefits plans, stock option plans and any other plans or agreements
entered into between Employee and Employer pursuant to which Employee has been
granted specific rights, benefits or options.
11. Noncompetition. Employee agrees that, during his employment with
Employer and for a period of three (3) years from the date of termination of
his employment with Employer, he will not directly or indirectly compete with
Employer by engaging in the activities set forth on Exhibit A attached hereto
and incorporated herein by reference (the "Prohibited Activities") within the
geographic area that is set forth on Exhibit B attached hereto (the "Restricted
Area"). For purposes of this Section 11, Employee recognizes and agrees that
Employer conducts and will conduct business in the entire Restricted Area and
that Employee will perform his duties for Employer within the entire Restricted
Area. Employee shall be deemed to be engaged in and carrying on the Prohibited
Activities if he engages in the Prohibited Activities in any capacity
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whatsoever, including, but not limited to, by or through a partnership of which
he is a general or limited partner or an employee engaged in such activities,
or by or through a corporation or association of which he owns five percent
(5%) or more of the stock or of which he is an officer, director, employee,
member, representative, joint venturer, independent contractor, consultant or
agent who is engaged in such activities. Employee agrees that during the three
(3) year period described above, he will notify Employer of the name and
address of each employer with whom he has accepted employment during such
period. Such notification shall be made in writing within five (5) days after
Employee accepts any employment or new employment by certified mail, return
receipt requested.
12. Confidential Data. Employee further agrees that, during his
employment with Employer and thereafter, he will keep confidential and not
divulge to anyone, disseminate nor appropriate for his own benefit or the
benefit of another any confidential information described in Exhibit C attached
hereto and incorporated by reference herein (the "Confidential Data"). Employee
hereby acknowledges and agrees that this prohibition against disclosure of
Confidential Data is in addition to, and not in lieu of, any rights or remedies
that Employer may have available pursuant to the laws of any jurisdiction or at
common law to prevent the disclosure of trade secrets, and the enforcement by
Employer of its rights and remedies pursuant to this Agreement shall not be
construed as a waiver of any other rights or available remedies that it may
possess in law or equity absent this Agreement.
13. Nonsolicitation of Employees. Employee covenants that, during his
employment with Employer and for a period of one (1) year from the date of
termination of his employment with Employer, he will not (i) directly or
indirectly induce or attempt to induce any employee of Employer to terminate
his or her employment or (ii) without prior written consent of Employer, offer
employment either on behalf of himself or on behalf of any other individual or
entity to any employee of Employer or to any terminated employee of Employer.
14. Property of Employer. Employee acknowledges that from time to time
in the course of providing services pursuant to this Agreement he shall have
the opportunity to inspect and use certain property, both tangible and
intangible, of Employer and Employee hereby agrees that such property shall
remain the exclusive property of Employer, and Employee shall have no right or
proprietary interest in such property, whether tangible or intangible,
including, without limitation, Employee's customer and supplier lists, contract
forms, books of account, computer programs and similar property.
15. Equitable Relief. Employee acknowledges that the services to be
rendered by him are of a special, unique, unusual, extraordinary, and
intellectual character, which gives them a peculiar value, and the loss of
which cannot reasonably or adequately be compensated in damages in an action at
law, and that a breach by him of any of the provisions contained in this
Agreement will cause Employer irreparable injury and damage. Employee further
acknowledges that he possesses unique skills, knowledge and ability and that
competition by him in violation of this Agreement or any other breach of the
provisions of this Agreement would be extremely detrimental to Employer. By
reason thereof, Employee agrees that Employer shall be entitled, in
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addition to any other remedies it may have under this Agreement or otherwise,
to injunctive and other equitable relief to prevent or curtail any breach of
this Agreement by him.
16. "Change of Control". In the event (each such event, a "Change of
Control"): (1) Employer becomes a subsidiary of another corporation or entity
or is merged or consolidated into another corporation or entity or
substantially all of the assets of Employer are sold to another corporation or
entity; or (2) any person, corporation, partnership or other entity, either
alone or in conjunction with its "affiliates," as that term is defined in Rule
405 of the General Rules and Regulations under the Securities Act of 1933, as
amended, or other group of persons, corporations, partnerships or other
entities who are not "affiliates" but who are acting in concert, becomes the
owner of record or beneficially of securities of Employer that represent
thirty-three and one-third percent (33 1/3%) or more of the combined voting
power of Employer's then outstanding securities entitled to elect Directors; or
(3) the Board of Directors of Employer or a committee thereof makes a
determination in its reasonable judgment that a "Change of Control" of Employer
has taken place; the term during which this Agreement shall be effective shall
include the remaining term of this Agreement following the date of the Change
of Control plus two (2) years, and Employee's compensation for such period
shall be based on the following formula, shall be subject to the following
conditions, and shall be in lieu of the compensation provided for under Section
3 of this Agreement and in lieu of the compensation upon termination provided
for under Section 9 of this Agreement (except for Section 9(a), which shall
still apply):
(a) Employee shall be paid an annual salary for the remaining term
of this Agreement plus two (2) years consisting of one hundred percent
(100%) of the average amount of total cash compensation, excluding
payments made under tax benefit bonuses paid upon the lapse of resale
restrictions on common stock for certain officers, of Employee for the
two (2) calendar years prior to the Change of Control.
(b) Employee shall be paid an annual amount for the remaining term
of this Agreement plus two (2) years in consideration of the
noncompetition covenant of Section 11 of this Agreement consisting of
fifty percent (50%) of the average amount of total cash compensation,
excluding payments made under tax benefit bonuses paid upon the lapse
or resale restrictions on common stock for certain officers, of
Employee for the two (2) calendar years prior to the Change of
Control. Such annual amounts shall be paid quarterly in advance.
(c) Notwithstanding any of the provisions of this Agreement, the
amount of all payments to be made pursuant to this Section 16 after a
Change of Control shall not exceed one dollar ($1.00) less than that
amount that would cause any such payment to be deemed a "parachute
payment" as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and as Section 280G of the Code is then
in effect at the time of such payment.
(d) Any payments made to Employee following a Change of Control
that shall be disallowed, in whole or in part, as a deductible expense
to Employer for Federal income tax purposes by the Internal Revenue
Service on the basis that Section 280G of the Code
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prohibits such deduction shall be reimbursed by Employee to the full
extent of such disallowance within six (6) months after the date of
which the amount of such disallowance has been finally determined and
Employer has paid the deficiency with respect to such disallowance.
Employer shall legally defend any proposed disallowance by the
Internal Revenue Service and the amount required to be reimbursed by
Employee shall be the amount determined by an appropriate court in a
final, nonappealable decision that is actually disallowed as a
deduction. In lieu of payment to Employer by Employee, Employer may,
in its discretion, withhold amounts from Employee's future
compensation payments until the amount owed to Employer has been
fully recovered. No such withholding shall occur prior to the date on
which Employee would be required to make reimbursement as provided
herein.
(e) If the limitation set forth in this Section 16(c) may at any
time become applicable to the amounts otherwise due pursuant to
paragraphs (a) and (b) of Section 16, then Employer shall continue to
pay Employee all amounts as provided under paragraphs (a) and (b) of
Section 16 until such time as cumulative payments equal the aggregate
amount as limited by paragraph (c), and Employee may terminate his
employment relationship with Employer on three (3) months notice at
any time within the last twelve (12) months of the time period during
which the payments described in this Section 16(e) will be paid
without affecting his rights to receive such payments.
(f) Employer shall have no obligation to pay the amounts set forth
in paragraphs (a) and (b) of Section 16 as limited by paragraph (c) if
there is reasonable proof that the noncompetition or confidential data
provisions of Sections 11 and 12, respectively, of this Agreement are
being violated.
(g) In the event the employment relationship is terminated for
cause (pursuant to Section 8(b) hereof) following a Change of Control,
Employer shall not be obligated to make any further payments of the
compensation amounts provided for in this Agreement, except as
provided in Section 9(a) above. Notwithstanding any other provision of
this Agreement, except for paragraphs (e) and (j) of this Section 16,
which shall control in the event Employee terminates employment as
provided in paragraphs (e) and (j), in the event Employee voluntarily
terminates employment following a Change of Control for other than
Good Reason, as defined hereinafter, compensation amounts set forth in
paragraphs (a) and (b) shall be payable only for a one (1) year period
following termination of employment.
"Good Reason" to terminate employment with Employer occurs if: (1)
duties are assigned that are materially inconsistent with previous
duties; (2) duties and responsibilities are substantially reduced; (3)
base compensation is reduced not as part of an across the board
reduction for all senior officers or executives; (4) participation
under compensation plans or arrangements generally made available to
persons at Employee's level of responsibility at Employer is denied;
(5) a successor fails to assume this Agreement; or (6) termination is
made without compliance with prescribed procedures.
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(h) In the event Employee is involuntarily terminated by Employer
without cause, Employee voluntarily terminates employment for Good
Reason or the employment relationship is terminated by death or
permanent disability of Employee, Employer's obligation to pay the
compensation amounts provided in this Section 16 shall survive
termination of employment.
(i) In the event of termination of employment during the
pendency of a "Potential Change of Control", as hereinafter defined,
paragraphs (g) and (h) of this Section 16 shall apply as if an actual
Change of Control had taken place. A "Potential Change of Control"
shall be deemed to have occurred if: (1) Employer has entered into an
agreement or letter of intent the consummation of which would result
in a Change of Control; (2) any person publicly announces an intention
to take or to consider taking actions that, if consummated, would
constitute a Change of Control; or (3) the Board of Directors of
Employer or a committee thereof in its reasonable judgment makes a
determination that a Potential Change of Control for purposes of this
Agreement has occurred. A Potential Change of Control remains pending
for purposes of receiving payments under this Agreement until the
earlier of the occurrence of a Change of Control or a determination by
the Board of Directors or a committee thereof (at any time) that a
Change of Control is no longer reasonably expected to occur.
(j) Notwithstanding anything contained in this Agreement to the
contrary, Employee and Employer, or the person, corporation,
partnership or other entity acquiring control of Employer pursuant to
this Section 16, with the concurrence of the Chief Executive Officer
and Compensation Committee of the Board of Directors of Employer, may
mutually agree that Employee, with three (3) months' notice, may
terminate his employment and receive a lump sum payment equal to the
present value of remaining payments under this Agreement discounted by
the then current Treasury Xxxx rate for the remaining term of this
Agreement.
17. Successors Bound. This Agreement shall be binding upon Employer
and Employee, their respective heirs, executors, administrators or successors
in interest, including without limitation, any corporation, partnership or
other entity acquiring control of Employer pursuant to Section 16 hereof.
18. Severability and Reformation. The parties hereto intend all
provisions of this Agreement to be enforced to the fullest extent permitted by
law. If, however, any provision of this Agreement is held to be illegal,
invalid, or unenforceable under present or future law, such provision shall be
fully severable, and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision were never a part hereof, and the
remaining provisions shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its
severance.
19. Integrated Agreement. This Agreement constitutes the entire
Agreement between the parties hereto with regard to the subject matter hereof,
and there are no agreements,
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understandings, specific restrictions, warranties or representations relating
to said subject matter between the parties other than those set forth herein or
herein provided for.
20. Attorneys' Fees. If any action at law or in equity, including any
action for declaratory or injunctive relief, is brought to enforce or interpret
the provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees from the nonprevailing party, which fees may
be set by the court in the trial of such action, or may be enforced in a
separate action brought for that purpose, and which fees shall be in addition
to any other relief which may be awarded.
21. Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered personally, mailed by certified mail (return
receipt requested) or sent by overnight delivery service, cable, telegram,
facsimile transmission or telex to the parties at the following addresses or at
such other addresses as shall be specified by the parties by like notice:
(a) If to Employer: MiliRisk, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Attention: F. Xxxxxx Xxxxxx, III
Facsimile No.: (000) 000-0000
(b) If to Employee: 0000 Xx Xxx Xx.
Xxxxxxxxx, Xxxxx 00000
Notice so given shall, in the case of notice so given by mail, be
deemed to be given and received on the fourth calendar day after posting, in
the case of notice so given by overnight delivery service, on the date of
actual delivery and, in the case of notice so given by cable, telegram,
facsimile transmission, telex or personal delivery, on the date of actual
transmission or, as the case may be, personal delivery.
22. Further Actions. Whether or not specifically required under the
terms of this Agreement, each party hereto shall execute and deliver such
documents and take such further actions as shall be necessary in order for such
party to perform all of his or its obligations specified herein or reasonably
implied from the terms hereof.
23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE
OF TEXAS.
24. Assignment. This Agreement is personal to Employee and may not be
assigned in any way by Employee without the prior written consent of Employer.
This Agreement shall not be assignable or delegable by Employer, other than to
an affiliate of Employer, except if there is a
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Change of Control as defined in Section 16, Employer may assign its rights and
obligations hereunder to the person, corporation, partnership or other entity
that has gained such control.
25. Counterparts. This Agreement may be executed in counterparts, each
of which will take effect as an original and all of which shall evidence one
and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
MILIRISK, INC.
By:
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Name:
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Title:
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EMPLOYEE:
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Xxxxx X. Xxxxxx
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EXHIBIT A
PROHIBITED ACTIVITIES
Acting in any capacity, either individually or with any corporation,
partnership or other entity, directly or indirectly, in providing, or proposing
to provide, data processing software systems, related automation support
services and information services to the insurance industry, including, but not
limited to, application software, processing, consulting and related services,
in the performance of any of the following types of duties in any part of the
insurance industry:
1. The performance of the sales and marketing functions.
2. The responsibility for sales revenue generation.
3. The responsibility for customer satisfaction.
4. The responsibility for research and development of insurance data
base products.
5. The responsibility for the research and development of information
data processing systems and services.
6. The providing of input to pricing of products.
7. The planning and management of data processing services resources.
8. The coordination of the efforts of the various aspects of computer
systems services organizations with other functions.
9. The planning and management of information services resources.
10. The providing and management of an operations staff to support the
above listed activities.
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EXHIBIT B
RESTRICTED AREA
Fifty mile radius of the city limits of the following cities:
Dallas/Fort Worth, Texas Milwaukee, Wisconsin
Boston, Massachusetts Sheboygan, Wisconsin
Columbia, South Carolina
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EXHIBIT C
CONFIDENTIAL INFORMATION
1. All software/systems (including all present, planned and future
software), whether licenses or unlicensed, developed by or on behalf of or
otherwise acquired by MiliRisk, Inc. or any of its subsidiaries.
"All software/system" shall mean:
o all code in whatever form
o all data pertaining to the architecture and design of such
software systems
o all documentation in whatever form
o all flowcharts
o any reproduction or recreation in whole or in part of any of the
above in whatever form.
2. All business plans and strategies including:
o strategic plans
o product plans
o marketing plans
o financial plans
o operating plans
o resource plans
o all research and development plans including all data produced
by such efforts.
3. Internal policies, procedures, methods and approaches which are
unique to MiliRisk, Inc. and are not public.
4. Any information relating to the employment, job responsibility,
performance, salary and compensation of any present or future officer or
employee of MiliRisk, Inc.
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SCHEDULE 3(b)
ANNUAL BONUS
% of net income target achieved % of Maximum Bonus
------------------------------- ------------------
More than Up to
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100% or more 100%
90% 100% 90%
80% 90% 75%
70% 80% 60%
60% 70% 45%
50% 60% 30%
40% 50% 15%
30% 40% 10%
20% 30% 5%
20% or less 0%
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SCHEDULE 3(c)
STOCK OPTIONS
IPO OPTIONS
Number of Shares Exercise Price Date of Grant
---------------- -------------- -------------
Pre-Split Post-Split
865 93,154 Initial Price to Public Date of IPO
