Exhibit 10(f)
EMPLOYMENT AGREEMENT
XXXXX X. XXXX
Exhibit 4.1 - Amended as of February 19, 2002
COMPENSATION
1. Base Salary. During the Employment Period, Employer shall pay to
Executive a Base Salary, payable in equal monthly installments at
such times during each month as is customary with Employer with
respect to its senior executives, at a rate of $258,750 per annum.
2. Short-Term Bonus Arrangement Applicable for Fiscal Year 2002.
(a) Executive shall be entitled to receive an annual cash bonus
for fiscal year 2002 based on the consolidated earnings per
share of Employer ("EPS") as determined under the following
Annual Cash Incentive Matrix:
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ANNUAL CASH INCENTIVE MATRIX
------------------------ ----------------------- ------------------------ -----------------------
FISCAL YEAR EPS/BONUS EPS/BONUS EPS/BONUS
------------------------ ----------------------- ------------------------ -----------------------
2002 $0.98/$40,000 $1.18/$80,000 $1.28/$200,000
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(b) An annual cash bonus shall not be payable for fiscal year
2002 if EPS for such fiscal year is less than $0.98.
(c) If the EPS for fiscal 2002 is between the EPS levels shown
in the above matrix, the amount of the annual cash bonus
shall be prorated between such EPS levels. The maximum
annual cash bonus for fiscal year 2002 is $200,000.
3. Short-Term Bonus Arrangement Applicable for Fiscal Years 2003 and
2004.
(a) Fiscal 2002 actual results, exclusive of the $0.19 per share
non-recurring charge related to adoption of SFAS 142, will
serve as the baseline for establishing the fiscal 2003 and
2004 bonus matrix. Under this matrix, incremental bonus
payments will be made based on EPS improvements of 8%, 15%
and 20% (exclusive of the one-time charge). In the following
example, fiscal 2002 results are assumed to be $1.05 per
share. Based upon $1.05 in fiscal 2002 EPS, the annual cash
incentive matrix for the three-year period would be
structured as follows:
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ANNUAL CASH INCENTIVE MATRIX
--------------------- -------------------------- ------------------------- -------------------------
8% EPS IMPROVE/ 15% EPS IMPROVE/ 20% EPS IMPROVE/
FISCAL YEAR BONUS % BONUS % BONUS %
--------------------- -------------------------- ------------------------- -------------------------
2002 $0.98/$40,000 $1.18/$80,000 $1.28/$200,000
--------------------- -------------------------- ------------------------- -------------------------
2003 $1.34/$40,000 $1.43/$80,000 $1.49/$200,000
--------------------- -------------------------- ------------------------- -------------------------
2004 $1.45/$40,000 $1.64/$80,000 $1.79/$200,000
--------------------- -------------------------- ------------------------- -------------------------
Cumulative $3.77/$120,000 $4.25/$240,000 $4.56/$600,000
===================== ========================== ========================= =========================
(b) An annual cash bonus shall not be payable for fiscal year
2003 or fiscal 2004 if EPS for such fiscal year is less than
the minimum level for each year as reflected in the matrix.
(c) If the EPS for fiscal 2003 or fiscal 2004 is between the EPS
levels reflected in the approved matrix, the amount of the
annual cash bonus shall be prorated between such EPS levels.
The maximum annual cash bonus for fiscal 2003 and fiscal
2004 is $200,000.
4. Short-Term Bonus - Three-Year Cumulative Provision. Due to the
cyclical nature of the Company's business, the matrix will be
structured to include a three-year cumulative catch-up provision
The amount of the annual cash bonus for fiscal year 2004 may be
increased from the amounts determined in the matrix for such year as
a result of the cumulative three-year EPS. The following example
illustrates how the annual cash bonus for fiscal year 2004 may be
increased by the cumulative three-year EPS (assuming the example
matrix presented in item 3 above which is reflective of fiscal 2002
EPS of $1.05).
EPS BONUS
--- -----
Fiscal Year 2002 $ 1.05 $ 54,000
Fiscal Year 2003 $ 1.32 $ 0
Fiscal Year 2004 $ 1.70 $ 128,000
------ -----------
Cumulative Three-Year Total $ 4.07 $ 182,000
Cumulative Adjustment $ 13,000 (additional amount paid in 2004)
-----------
Cumulative Bonus Paid $ 195,000
The cumulative annual bonus for fiscal years 2002, 2003 and 2004
before cumulative adjustment would be $182,000. Because the
cumulative three-year EPS of $4.07 is between $3.77 and $4.25, the
cumulative three-year bonus amount attributable to $4.07 would be
$195,000, a proration between $3.77/$120,000 and $4.25/$240,000. As
such, an additional $13,000 would be payable in 2004 to bring the
fiscal year 2004 bonus to $141,000 and the cumulative three-year
bonus to $195,000.
5. Short-Term Bonus - Timing of Payment. Employer shall pay to Executive
the annual cash bonus payable, if any, within 75 days following the
end of each fiscal year.
6. Short-Term Bonus Arrangement(s) Applicable for Fiscal Years After
2004. Executive shall be entitled to receive annual cash bonuses for
years after fiscal year 2004 under a bonus arrangement or
arrangements to be determined by Employer which shall provide
Executive an annual bonus opportunity of at least $200,000.
7. Long-Term Incentive Arrangement Applicable for Fiscal Years 2000,
2001 and 2002. On November 9, 1999, Executive received a grant of
options to purchase 36,000 shares of Company Common Stock. Pursuant
to the Compensation Committee's grant to Executive, the options, to
the extent not previously exercisable and vested, shall be
immediately exercisable and vested upon the termination of the
Employment Period by Employer without cause pursuant to Section 5.1,
or by Executive for good reason pursuant to Section 5.3, if such
termination occurs within three months prior to or twelve months
after a Change in Control.
8. Long-Term Incentive Arrangement(s) Applicable for Fiscal Years After
2002. In each fiscal year after 2002, Executive shall be entitled to
participate in a long-term incentive arrangement or arrangements to
be determined by Employer, which arrangement or arrangements shall
provide Executive an opportunity to earn an amount no less than the
product of $100,000 multiplied by the numbers of fiscal years to
which the arrangement or arrangements relate.
