1
EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of January
1, 2000 (the "Effective Date"), by and between Genomic Solutions Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx") and
shall supersede that Employment Agreement between Xxxxxxxx and the Company,
dated January 1, 1998.
RECITALS:
The Company desires to continue the employment of Xxxxxxxx and Xxxxxxxx
desires to continue to be employed by the Company, on the terms and subject to
the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
1. Employment.
a. The Company agrees to employ Xxxxxxxx and Xxxxxxxx accepts the
employment, on the terms and subject to the conditions set
forth below. During the term of employment hereunder, Xxxxxxxx
shall at all times serve as President and Chief Executive
Officer of the Company, and shall have the responsibilities
and authorities to do and perform diligently all such
services, acts and things as are customarily done and
performed by the principal executive officer of companies in
similar business and size to the Company, including but not
limited to those authorities and responsibilities not
specifically withheld by the Directors of the Company (the
"Board") or shareholders in the Amended and Restated
Certificate of Incorporation (the "Certificate"), Bylaws or
other agreements executed by the Company of which Xxxxxxxx has
knowledge, together with such other duties as may reasonably
be requested from time to time by the Board, which duties
shall be consistent with Xxxxxxxx' positions as set forth
above. Specifically, Xxxxxxxx' responsibilities include, but
are not limited to:
1). all operating functions of the Company, including marketing,
sales, manufacturing, research and development,
international, finance and accounting, service and technical
support;
2). strategic planning and business development;
3). capital structure and financings; and
4). corporate governance issues, legal structure and standing,
and compliance with laws and regulations.
2
x. Xxxxxxxx shall report directly to the Board throughout the
term of this Agreement.
c. For service as an officer and employee of the Company,
Xxxxxxxx shall be entitled to the full protection of the
applicable indemnification provisions of the Certificate and
Bylaws of the Company, as they may be amended from time to
time, and as provided by law.
2. Term and Location of Employment.
Subject to the provisions for termination provided below, the
term of Xxxxxxxx' employment under this Agreement shall commence on the
Effective Date and shall continue thereafter for a period of three (3)
years after the Effective Date. For the term of this Agreement,
Xxxxxxxx' employment shall be within the immediate vicinity of Ann
Arbor, Michigan.
3. Devotion to the Company's Business.
Xxxxxxxx shall devote his best efforts, knowledge, skill, and
his entire productive time, ability and attention to the business of
the Company during the term of this Agreement.
4. Compensation.
a. During the term of this Agreement, the Company shall pay or
provide, as the case may be, to Xxxxxxxx the compensation and
other benefits and rights set forth in this Agreement,
including but not limited to, paragraphs 4, 5, 6 and 13 of
this Agreement.
b. Base Compensation. As compensation for the services to be
performed hereafter, the Company shall pay to Xxxxxxxx, for
the calendar year 2000, a base salary (the "Base Salary") of
Two Hundred Twenty Five Thousand Dollars ($225,000.00),
payable in twenty-four (24) equal semi-monthly payments of
Nine Thousand Three Hundred Seventy Five Dollars ($9,375.00).
c. Annual Salary Increase. Xxxxxxxx' salary shall be reviewed at
least once annually and may be increased, but shall not be
decreased, in the sole discretion of the Board.
d. Bonuses.
I. Performance Bonus. Xxxxxxxx shall be eligible for the
performance bonuses set forth herein, which if earned
(as set forth on Exhibit A), shall be paid either
annually or semi-annually, as determined by the
Compensation Committee of the Board. For each calendar
year under this Agreement, Xxxxxxxx shall be eligible
for a performance bonus not to exceed fifty
3
percent (50%) of Xxxxxxxx' Base Salary for the year in issue. The
amount, if any, of any performance bonus that Xxxxxxxx' shall be
entitled to receive shall be determined in accordance with
Exhibit A, and if earned, paid no later than March 31st of the
year following the year in which the bonus was earned.
II. Liquidity Bonus. In the event of any acquisition of the Company
by means of merger or other form of corporate reorganization in
which outstanding shares of the Company are exchanged for
securities or other consideration issued by the acquiring
corporation or its subsidiary (other than a mere re-incorporation
transaction), a sale, conveyance or disposition of all or
substantially all of the assets of the Company, or the
effectuation by the Company of a transaction or series of related
transactions in which more than Fifty Percent (50%) of the voting
power is disposed of to a single holder, or group of affiliated
holders, who do not possess said 50% of the voting power at the
time of execution of this Agreement, or should the Company sell
more than Three Million (3,000,000) shares of its common stock
pursuant to a registration statement filed under the Securities
Act of 1933, as amended, at a sale price equal to or exceeding
Eight Dollars ($8) per share (each a "Liquidity Event"), the
Company shall pay to Xxxxxxxx, immediately prior to such
Liquidity Event, One Hundred Fifty Thousand Dollars
($150,000.00). The Company shall be obligated to pay the
Liquidity Event bonus for one, and not more than one, Liquidity
Event.
e. Disability. During any period that Xxxxxxxx fails to perform his
duties hereunder as a result of incapacity due to physical or mental
illness (the "Disability Period"), Xxxxxxxx shall continue to receive
his full Base Salary, bonuses and other benefits at the rate in effect
for such period until his employment is terminated by the Company
pursuant to Section 8a(4) hereof; provided, however, that payments so
made to Xxxxxxxx during the Disability Period shall be reduced by the
amounts, if any, which are paid to Xxxxxxxx at or prior to the time of
any such payment under disability benefit plans of the Company.
5. Benefits.
a. Insurance. The Company shall provide to Xxxxxxxx all benefits normally
provided to employees of the Company, including life, medical, dental
and long term and short term disability insurance for himself, his
spouse and eligible family members as may be determined by the Board
to be consistent with the Company's standard policies. Additionally,
the Company shall compensate Xxxxxxxx in an amount that, net of all
applicable taxes, is sufficient to pay the premiums on a term life
insurance policy on his life in the amount of Seven Hundred Fifty
Thousand Dollars ($750,000.00). The Company shall procure such policy
and pay the premium amounts directly to the insurer for the benefit of
Xxxxxxxx, pay the amounts owing on such compensation to the
appropriate taxing authorities as and when due, and
4
include the gross amount paid for Xxxxxxxx' benefit hereunder in
Xxxxxxxx' W2 income. Xxxxxxxx shall be the owner of such policy.
b. Benefit Plans. Xxxxxxxx, at his election, may participate, during his
employment hereunder, in all retirement plans, 401(k) plans and other
benefit plans of the Company generally available from time to time to
other executive officers of the Company and for which Xxxxxxxx
qualifies under the terms of the plans (and nothing in this Agreement
shall or shall be deemed to in any way affect Xxxxxxxx' right and
benefits under any such plan except as expressly provided herein).
Xxxxxxxx shall also be entitled to participate in any equity, stock
option or other employee benefit plan that is generally available to
senior executives. Xxxxxxxx' participation in and benefits under any
such plan shall be on the terms and subject to the conditions
specified in the governing document of the particular plan.
c. Annual Vacation. Effective as of January 1 of each year hereunder,
Xxxxxxxx shall be entitled to three (3) weeks of paid vacation time
for such year, and up to two (2) weeks of unused vacation time in such
year may be carried over into the next year. Upon any termination of
this Agreement for any reason whatsoever, unused paid vacation time to
which Xxxxxxxx is entitled to in that year shall be paid to Xxxxxxxx
within ten (10) days of such termination based on the Base Salary in
effect on the effective date of such termination.
d. Disability Policy. The Company shall compensate Xxxxxxxx in an amount
that, net of all applicable taxes, is sufficient to pay the premiums
on a disability insurance policy ("Disability Policy"). The Disability
Policy shall, at a minimum, provide for the payment of Sixty Percent
(60%) of Xxxxxxxx Base Salary for the remainder of his life after a
180-day waiting period. The Company shall procure such policy and pay
the premium amounts directly to the insurer for the benefit of
Xxxxxxxx, pay the amounts owing on such compensation to the
appropriate taxing authorities as and when due, and include the gross
amount paid for Xxxxxxxx' benefit hereunder in Xxxxxxxx' W2 income.
Xxxxxxxx shall be the owner of such policy.
6. Reimbursement of Business Expenses.
The Company shall reimburse Xxxxxxxx or provide him with an expense
allowance during the term of this Agreement for travel, car, telephones,
and other expenses reasonably and necessarily incurred by Xxxxxxxx in
connection with the Company's business. Xxxxxxxx shall furnish such
documentation with respect to reimbursement to be paid hereunder as the
Company shall reasonably request.
5
7. Intentionally Omitted.
8. Termination of Employment.
x. Xxxxxxxx' employment under this Agreement may be terminated
prior to the date ending three (3) years after the Effective
Date under the following circumstances only:
1). by the Company, at any time other than a Disability Period under
Section 4e, for any reason whatsoever or for no reason upon not less
than sixty (60) days written notice to Xxxxxxxx;
2). by the Company, at any time for "cause" as defined below,
but only after written notice to Xxxxxxxx, and Xxxxxxxx'
failure to cure within thirty (30) days of receipt of such
notice;
3) by Xxxxxxxx at any time for any reason whatsoever, or for
no reason, upon not less than sixty (60) days written
notice to the Company.
4) by Xxxxxxxx, at any time should any of the following
occur, but only after written notice to the Company, and
the Company's failure to cure within thirty (30) days of
receipt of such notice: (i) a material breach of this
Agreement by the Company, (ii) the occurrence of any event
set forth in Section 11 hereof, or (iii) should the
Company file a petition of bankruptcy or otherwise be
unable to meet its bills, debts, and other obligations as
they become due;
5) by the Company upon Xxxxxxxx' "permanent disability" as
defined below, without prior notice; and
6) upon Xxxxxxxx' death.
b. For purposes hereof, for "cause" shall mean the material
breach of any provision of this Agreement by Xxxxxxxx
(including but not limited to a material breach of Section
15), or any action of Xxxxxxxx (or Xxxxxxxx' failure to act),
which involves malfeasance, fraud, or moral turpitude, which,
if generally known, would have a material adverse effect on
the Company.
c. For purposes hereof, Xxxxxxxx' "permanent disability" shall be
deemed to have occurred after one hundred eighty (180)
consecutive days during which Xxxxxxxx, by reason of his
physical or mental disability or illness, shall have been
unable to discharge his duties under this Agreement. The date
of permanent disability shall be the one hundred eightieth
(180th) day. In the event either the Company or Xxxxxxxx,
after receipt of notice of Xxxxxxxx' permanent disability from
the other, disputes that Xxxxxxxx' permanent disability shall
have occurred, Xxxxxxxx shall promptly submit to a physical
examination by the chief of medicine of any major accredited
hospital in Michigan and, unless such physician shall issue
his written statement to the effect that in his opinion, based
on his diagnosis, Xxxxxxxx is capable of resuming his
employment and devoting his full time and energy to
discharging his duties within
6
thirty (30) days after the date of such statement, such
permanent disability shall be deemed to have occurred.
9. Compensation Upon Termination or Disability.
a. In the event that the Company terminates Xxxxxxxx' employment
under this Agreement without "cause" pursuant to Section
8(a)(1) hereof, or upon failure of the Company to enter into a
new employment agreement with Xxxxxxxx by the conclusion of
this Agreement, or upon Xxxxxxxx' termination of his
employment pursuant to Section 8(a)(4), the Company shall
promptly pay Xxxxxxxx the sum of: (i) all accrued compensation
and bonus earned through the effective date of termination and
(ii) the greater of the compensation owed Xxxxxxxx for the
remainder of the original three (3) year term of this
Agreement or two times the sum of Xxxxxxxx' Base Salary for
the prior twelve month period.. Additionally, the Company
shall continue to pay and provide Xxxxxxxx all other benefits
under this Agreement for the remainder of the original three
(3) year term of this Agreement unless and until Xxxxxxxx
materially breaches Section 15 of this Agreement.
Notwithstanding anything contained herein to the contrary, in
the event of such termination of employment, the gross amounts
necessary to cover the premiums on the life insurance and
disability insurance policies under Sections 5a and 5d, and
the applicable taxes thereon referenced in such Sections,
shall be paid directly to Xxxxxxxx and he shall be responsible
for the payment of the applicable taxes on all such gross
amounts received.
b. In the event of termination of Xxxxxxxx' employment by the
Company under this Agreement for "cause" pursuant to Section
8(a)(2), or if Xxxxxxxx voluntarily terminates his employment
for any reason other than pursuant to Section 8(a)(4),
Xxxxxxxx shall be entitled to no further compensation or other
benefits under this Agreement, except for any unpaid salary,
bonus and benefits accrued and earned by him hereunder up to
and including the effective date of such termination.
c. In the event of termination of Xxxxxxxx' employment under this
Agreement due to Xxxxxxxx' permanent disability or death
(Sections 8(a)(5) or (6)), Xxxxxxxx (or his successors and
assigns in the event of his death) shall be entitled to that
portion of any unpaid salary, bonus and benefits accrued and
earned by him hereunder up to and including the effective date
of such termination.
d. Notwithstanding anything to the contrary in this Section 9,
the Company's obligation to pay, and Xxxxxxxx' right to
receive, any compensation under this Section 9, shall
terminate as follows: (i) if Xxxxxxxx is then an employee of
the Company, upon the termination of his employment for
"cause" under Section 8(a)(2) for a material breach of Section
15 hereof; or (ii) if Xxxxxxxx is not then an employee of the
Company, upon Xxxxxxxx' material breach of Section 15 hereof.
7
10. Resignation of Executive. Upon any termination of Xxxxxxxx'
employment under this Agreement, Xxxxxxxx shall be deemed to have
resigned from any and all offices and directorships held by
Xxxxxxxx in the Company and any entities controlled by the Company
(the "Affiliates").
11. Effect of the Company's Merger, Sale or Transfer of Assets, and
Termination of Xxxxxxxx' Employment. In the event of any
acquisition of the Company by means of merger or other form of
corporate reorganization in which outstanding shares of the
Company are exchanged for securities or other consideration
issued by the acquiring corporation or its subsidiary (other than
a mere reincorporation transaction), a sale, conveyance or
disposition of all or substantially all of the assets of the
Company, or the effectuation by the Company of a transaction or
series of related transactions in which more than Fifty Percent
(50%) of the voting power is disposed of to a single holder, or
group of affiliated holders, who do not possess said 50% of the
voting power at the time of execution of this Agreement (other
than the Company's sale of its common stock pursuant to a
registration statement filed under the Securities Act of 1933, as
amended), wherein Xxxxxxxx does not elect to continue or accept
employment with the Company or the surviving or purchasing
entity, then the Company shall pay to Xxxxxxxx, immediately prior
to such merger, consolidation, sale or transfer of assets, an
amount equal to the sum of (a) the portion of any unpaid salary,
bonus and benefits accrued and earned by Xxxxxxxx hereunder up to
and including the effective date of such change in control; and
(b) an amount equal to two times the sum of Xxxxxxxx' Base Salary
paid to Xxxxxxxx during the previous twelve (12) months.
12. Stock Options. In the event of termination of Xxxxxxxx'
employment by the Company under this Agreement for "cause"
pursuant to Section 8(a)(2) hereof, all unvested stock options or
other stock based compensation awarded to Xxxxxxxx that has not
vested shall lapse and be of no further force or effect
whatsoever. In the event of termination of Xxxxxxxx' employment
pursuant to Sections 8(a)(3), Xxxxxxxx shall have ninety (90)
days from his last day of employment to exercise all vested
options, including options that may vest during the 90 day
period. In the event of termination of Xxxxxxxx' employment
pursuant to Sections 8(a)(1), (4), (5), and (6)(i) all stock
options and other stock based compensation awarded to Xxxxxxxx
shall immediately become fully vested and immediately
exercisable; and (ii) the Company shall remain obligated to issue
to Xxxxxxxx those stock options identified in Section 13 in
accordance with the terms of Section 13. Any Stock Option
Agreements between the Company and Xxxxxxxx shall be amended to
conform to the provisions of this Section 12.
13. Issuance of Stock Options. Upon execution of this Agreement, the
Company shall enter into an award agreement ( "Award Agreement")
with Xxxxxxxx granting Xxxxxxxx an option ( "Option") to purchase
One Hundred Fifty Thousand (150,000) shares of the Company's
common stock ("Option Shares") with an exercise price equal to
ninety percent (90%) of the initial public offering price should
The Company complete an initial public offering where the
aggregate offering price to the public is at least Twenty Million
Dollars ($20,000,000.00), and where the public offering price per
share is not less than Eight Dollars ($8.00) per share (an
"IPO"). All terms and
8
conditions regarding this option shall be identical to those
contained in that Employment Agreement between Xxxxxxxx and the
Company dated January 1, 1998, which terms and conditions are
hereby incorporated by reference herein, except as specifically
modified by the terms of this Section 13. This option will vest
in five (5) equal annual installments, each consisting of the
right to purchase Thirty Thousand (30,000) shares, with the first
installment vesting upon the closing of the IPO and subsequent
installments vesting upon the ensuing four (4) anniversaries of
the IPO closing thereafter (unless earlier vesting occurs
pursuant to Section 12 hereof). The options may be exercised at
any time after vesting until the expiration of five (5) years
after the date of vesting.
14. Registration Rights. Xxxxxxxx shall be granted unlimited
"piggyback" rights to the extent permissible under the Company's
current Certificate and Bylaws, and to the maximum extent
possible without breaching the terms of any agreement to which
the Company is currently a party.
15. Confidentiality.
x. Xxxxxxxx agrees that:
1). Except pursuant to, and in accordance with the terms of, any
confidentiality and nondisclosure agreements which from time
to time may be entered into by the Company in pursuing
financing, acquisitions or other transactions, Xxxxxxxx will
not at any time, for so long as any Confidential Information
(as defined below) shall remain confidential or otherwise
remain wholly or partially protectable, either during the
term of this Agreement or thereafter, use or disclose,
directly or indirectly, to any person outside of the Company
or any Affiliate any Confidential Information, except as may
be required for the performance of his duties for the
benefit of the Company; and
2). promptly upon the termination of this Agreement for any
reason, Xxxxxxxx (or in the event of Xxxxxxxx' death, his
personal representative) shall: (i) return to the Company
any and all copies (whether prepared by or at the direction
of the Company or Xxxxxxxx) of all records, drawings,
materials, memoranda and other data constituting or
pertaining to Confidential Information in Xxxxxxxx'
possession; or (ii) certify in writing to the Company the
destruction of, and/or his lack of possession of, all such
materials described in subsection (i) herein.
b. As used in this Agreement, the term "Confidential
Information" shall mean all business information of any
nature and in any form which at the time or times concerned
is not generally known to those persons engaged in business
similar to that conducted or contemplated by the Company or
any Affiliate (other than by the act or acts of an employee
not authorized by the Company or any Affiliate to disclose
such information) and which relates to any one or more of
the aspects of the
9
present or past business of the Company or any of the
Affiliates or any of their respective predecessors.
Confidential Information may include but may not be limited
to, patents and patent applications, inventions and
improvements (whether or not patentable), development
projects, policies, processes, formulas, techniques,
know-how, and other facts relating to sales, advertising,
promotions, financial matters, customers, customer lists,
customer purchases or requirements, and other trade secrets.
x. Xxxxxxxx agrees and understands that the remedy at law for
any breach by him of this Section 15 may be inadequate and
that the damages flowing from such breach are not readily
susceptible to being measured in monetary terms.
Accordingly, it is acknowledged that, upon adequate proof of
Xxxxxxxx' violation of any legally enforceable provision of
this Section 15, the Company shall be entitled to immediate
injunctive relief and may obtain a temporary order
restraining any threatened or further breach. Nothing in
this Section 15 shall be deemed to limit the Company's
remedies at law or in equity for any breach by Xxxxxxxx of
any of the provisions of this Section 15 that may be pursued
or availed of by the Company.
16. Arbitration. Any dispute or controversy arising out of or
relating to this Agreement shall be settled finally and
exclusively by arbitration held in Washtenaw County in the State
of Michigan in accordance with the rules of the American
Arbitration Association then in effect. Such arbitration shall be
conducted by an arbitrator(s) appointed by the American
Arbitration Association in accordance with its rules and any
finding by such arbitrator(s) shall be final and binding upon the
parties. Judgment upon any award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof, and the
parties' consent to the jurisdiction of the courts of the State
of Michigan for this purpose. Nothing contained in this Section
16 shall be construed to preclude the Company from obtaining
injunctive or other equitable relief to secure specific
performance or to otherwise prevent a breach or contemplated
breach of this Agreement by Xxxxxxxx as provided in Section 15
hereof.
17. Notices. All notices, requests, consents and other communications,
required or permitted to be given hereunder to be given under this
Agreement shall be given in writing and shall be deemed
sufficiently given, served and received for all purposes upon the
first to occur of actual receipt, or delivery by generally
recognized overnight courier service, or three (3) days after
deposit in the United States mail, postage prepaid, registered or
certified, return receipt requested addressed, to the following
address (or to a revised address provided to the other party):
If to the Company: In all events, with a copy to:
Genomic Solutions Inc. Jaffe, Raitt, Heuer & Xxxxx,
0000 Xxxxxxx Xxxxx, Xxxxx X Professional Corporation
Xxx Xxxxx, Xxxxxxxx 00000 One Wooward Avenue, Suite 2400
Attn: Chief Financial Officer Xxxxxxx, XX 00000
Attn: Xxxxx Sugar
If to Xxxxxxxx: In all events, with a copy to:
Xxxxxxx X. Xxxxxxxx Golden & Xxxxxx, P.C.
0000 Xxxxxxxx Xxxxx 000 X. Xxxxx Xx., Xxxxx 000
Xxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
10
18. Miscellaneous.
1). The provisions of this Agreement are severable and if any
one or more provisions are determined to be illegal or
otherwise unenforceable, in whole or in part, the
remaining provisions and any partially unenforceable
provision to the extent enforceable in any jurisdiction
nevertheless shall be binding and enforceable.
2). The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be
binding on, the Company and its successors and assigns,
and the rights and obligations (other than obligations to
perform services) of Xxxxxxxx under this Agreement shall
inure to the benefit of, and shall be binding upon,
Xxxxxxxx and his heirs, personal representatives and
assigns. This Agreement is personal to Xxxxxxxx and he may
not assign his obligations under this Agreement in any
manner whatsoever.
3). The failure of either party to enforce any provision or
protections of this Agreement shall not in any way be
construed as a waiver of any such provision or provisions,
or as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other
provision of this Agreement. The rights granted the
parties herein are cumulative and the waiver of any single
remedy shall not constitute a waiver of such party's right
to assert all other legal remedies available to it under
the circumstances.
4). This Agreement supersedes all agreements and
understandings between the parties and may not be modified
or terminated orally. No modification, termination,
waiver, or attempted waiver shall be valid unless in
writing and signed by the party against whom the same is
sought to be enforced.
5). This Agreement shall be governed by and construed
according to the laws of the State of Michigan.
6). Captions and paragraph headings used herein are for
convenience and are not a part of this Agreement and shall
not be used in construing it.
7). This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the
same instrument.
8). The Company hereby represents and warrants unto Xxxxxxxx
as follows: (i) the Company has the requisite corporate
power and authority to enter into this Agreement and carry
out the transactions contemplated hereby; (ii) the
execution, delivery, and performance of this Agreement and
consummation of the transactions contemplated hereby have
been duly authorized by all requisite corporate action and
do not violate any agreement by which the Company is
bound, or any law, rule, or regulation to which the
Company is subject; and (iii) the person executing this
Agreement on behalf of the Company has the requisite
authority to execute this Agreement, has been duly
authorized to do so, and upon his execution, this
Agreement shall be binding upon the Company in accordance
with its terms and conditions.
11
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
on the date first written above.
COMPANY:
GENOMIC SOLUTIONS INC.
a Delaware corporation
----------------------------------------
J. XXXXXXX XXXXXXXXX
Chairman, Compensation Committee
EXECUTIVE:
----------------------------------------
XXXXXXX X. XXXXXXXX
12
EXHIBIT A
The following shall be used to determine the level of performance bonus payable
to Xxxxxxxx during 2000. Criteria for future performance bonuses shall be
determined by the Board in consultation with Xxxxxxxx.:
1. The maximum annual performance bonus Xxxxxxxx may earn shall not exceed
Fifty Percent (50%) of Xxxxxxxx' Base Salary.
2. The Board shall approve an annual operating plan for each calendar year
(the "Budget"). Seventy Percent (70%) of Xxxxxxxx performance bonus shall
be based on actual achievement versus Budget as follows:
- Net Revenue vs. Budget shall determine 50% of the performance bonus
- Operating Profit vs. Budget shall determine 20% of the performance
bonus
For each of the two Budget categories (a "Category") listed above in this
section 2, the bonus shall be calculated by comparing the actual dollar
performance to the planned dollar performance for the Category in the
Budget. Should the Company achieve 100% or higher of the Budget (as
measured in dollars) than Xxxxxxxx shall receive 100% credit for said
Category. Should the Company achieve between 75% and 100% for the Category,
Xxxxxxxx shall receive pro rata credit for the Category. For example,
should the Company have a Budget of $20 for Net Revenue and the Company
actually achieve $18, Xxxxxxxx would receive 90% credit for the Net Revenue
Category, or 45% (90% x the 50% of the bonus determined by the Net Revenue
Category). For actual performance that is less than 75% of Budget for a
Category, Xxxxxxxx shall receive 0% credit for the Category.
3. Thirty Percent (30%) of Xxxxxxxx' performance bonus shall be based on
achieving certain strategic goals of the Company. This portion of the bonus
shall be at the subjective discretion of the Board based on Xxxxxxxx'
achievements during the year with regard to acquisitions, partnerships,
financings, or other significant strategic events.
