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EXHIBIT (c)(9)
EMPLOYMENT AGREEMENT
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This Agreement, entered into as of the 10th day of June, 1999, between
Automobile Protection Corporation, a Georgia corporation, with offices at Xxxxx
000, 00 Xxxxxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 (the "Company") and Xxxxxx
Xxxxx, an individual residing at x/x Xxxxxxxxxx Xxxxxxxxxx Xxxxxxxxxxx, Xxxxx
000, 15 Dunwoody Park Drive, Atlanta, Georgia 30338(the "Executive"). This
Agreement will be effective upon the earlier to occur of (i) the acceptance for
payment of shares of the common stock, par value $.001 per share, of the Company
by AM1 Acquisition Company ("Sub") or any other subsidiary of the Ford Motor
Company ("Parent") pursuant to a tender offer commenced pursuant to the
Agreement and Plan of Merger, dated as of June 10, 1999 among Sub, Parent and
the Company or (ii) the exercise by Parent, in whole or in part, of the option
granted by Employee to Parent pursuant to the Stock Option and Tender Agreement,
dated as of June 10, 1999 between Employee and Parent (the "Effective Date").
RECITALS
1. The Company desires to retain the Executive and the Executive desires to
accept employment with the Company under the terms and provisions set forth
below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
in this Agreement, the Company and the Executive agree as follows:
1. Term. The Term of this Agreement shall commence on the Effective Date and
terminate on December 31, 2002 (the "Employment Period"). Notwithstanding
anything to the contrary contained herein, the Employment Period is subject
to termination pursuant to Section 5.
2. Employment. The Company agrees to employ and engage the services of the
Executive during the Employment Period as Chairman of the Board and Chief
Operating Officer ("Chairman & COO") of the Company and Executive agrees to
serve the Company in such capacity, on a full-time basis, during the
Employment Period of this Agreement. Executive shall perform the services
contemplated and further described herein at the Company Headquarters in
Atlanta, Georgia, except as may be required in the ordinary course of
business. Commercially reasonable efforts will be made to maintain the
Company Headquarters in Atlanta, Georgia.
3. Job Description.
3.1 Position and Duties. During the Employment Period, the Executive's
position, duties and responsibilities shall be those of Chairman & COO
of the Company and Executive shall perform such duties and have such
responsibilities which are of the same character and nature as those
typically performed by a Chairman and COO of
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the Company, and of the character and nature generally performed prior
to the Closing Date (as defined in the Agreement and Plan of Merger
dated as of June 10, 1999 among Parent, Sub and the Company).
Notwithstanding the above, the Board of Directors shall have the
absolute right to modify or change the position, duties,
responsibilities and title of the Executive in any respect, so long as
the Executive shall continue to be employed in a senior executive
capacity during the Employment Period and the modifications or changes
to Executive's position, duties and responsibilities do not have a
material negative impact on Executive's ability to attain EBITE goals
(as defined in Exhibit A) linked to his Incentive Compensation.
3.2 Devotion of Efforts. The Executive shall devote his full business time
during normal business hours to the business and affairs of the
Company, use his reasonable efforts to promote the interests of the
Company and perform the responsibilities assigned to him in accordance
with this Agreement. During the Employment Period of this Agreement,
Executive shall not engage in other employment, except with the prior
consent of the Board of Directors, which consent will not be
unreasonably withheld so long as the other employment does not
conflict with the interests of Ford Motor Company or its affiliates.
Notwithstanding the foregoing, Executive may continue to own up to 25%
of, and be a member of the board of directors of, Safeguard Products
International, Inc. ("Safeguard"), so long as (W) Executive is not
involved in the business of Safeguard (other than oversight of the
business to the extent necessary to discharge Executive's fiduciary
duties as a member of the board of directors of Safeguard); (X) no
resources of the Company are used or directed towards activities of
Safeguard, except for brokerage services provided by The Aegis Group,
Inc. to Safeguard on an arms length basis, consistent with past
practice, and (Y) no business opportunities of the Company of which
Executive is or may become aware are directed to Safeguard.
4. Compensation and Other Employment Terms.
4.1 Base Salary. The Company shall pay the Executive an initial annual
base salary of $72,000 ("Base Salary"). The Base Salary shall be
payable in cash, subject to applicable withholdings, in accordance
with the then current payment policies of the Company for its
executives.
4.2 Incentive Compensation. As further compensation, the Executive shall
be eligible for incentive compensation payments in an amount described
on Exhibit A hereto ("Incentive Compensation ").
4.3 Employee Benefits. In addition to the Base Salary and payments under
any Incentive Compensation arrangement that are payable hereunder, the
Executive shall be eligible during the Employment Period for the
following employee benefits:
(a) Vacation and Sick Leave. Participation in the vacation and
sick leave benefit maintained for executives of the Company;
paid vacation time shall be 4 weeks per year.
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(b) Automobile. Executive will be provided with an automobile on
terms and conditions to be mutually agreed upon by Executive
and the Company.
(c) Business Expense Reimbursement. Reimbursement for, or payment
of, the legitimate business expenses, including appropriate
entertainment expenses incurred by Executive on behalf of the
Company, pursuant to the written policies of the Company.
(d) 401(k) Plan. Participation in the 401(k) retirement benefit
plan made available to the employees of the Company on the
same basis that other executives of the Company participate in
such plan.
(e) Employee Benefit Plans. Participation in the employee benefit
plans of the Company made available to the employees of the
Company on the same basis that other executives of the Company
participate in such plans.
(f) Changes to Employee Benefit Plans. Nothing in this Agreement
shall prevent the Board of Directors of the Company from
changing, modifying, amending or terminating the employee
benefit plans of the Company so as to eliminate, reduce or
otherwise change any benefit payable under this Agreement, so
long as Executive is treated in a manner which is
substantially similar to other employees of the Company.
Executive agrees to submit regular reports of personal use of the
employee benefits as required under the Internal Revenue Code of 1986
to be treated as taxable income to Executive in order to allow the
Company to determine the amount which must be reported to the Internal
Revenue Service as compensation to Executive.
5. Termination.
5.1 Death. This Agreement shall terminate automatically upon the
Executive's death. All benefits and compensation then accrued
hereunder, and under any plans provided for in Section 4.3 hereof,
shall be paid to the Executive's beneficiaries, legal representatives,
or heirs, as appropriate.
5.2 Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, the Executive (A) shall have been absent
from the full-time performance of his duties with the Company for six
consecutive months, and (B) shall not, within 30 days after written
notice of termination is given to the Executive, have returned to the
full-time performance of his duties, the Company may terminate the
Executive's employment for disability. During such period of absence,
the Executive shall continue to receive the benefits provided in
Section 4 hereof, and thereafter the Executive's benefits shall be
determined under the Company's disability insurance plans and policies
provided under Section 4.3 hereof. In the event that Executive's
employment with the Company is terminated pursuant to this Section
5.2, the Company shall pay the Executive his full accrued Base Salary
at the rate in effect at the time of such termination, as well as
accrued Incentive Compensation through the date of termination.
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5.3 Cause. The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, "Cause" shall mean (A) any act of
dishonesty or knowing and willful breach of fiduciary duty on the
Executive's part which is intended to result in his personal
enrichment at the expense of the Company, (B) conviction of a felony
involving moral turpitude or unlawful, dishonest, or unethical
conduct, or other conduct involving moral turpitude, unlawful,
dishonest, or unethical conduct that a reasonable person would
consider damaging to the reputation of the Company; or (C) any
material breach of this Agreement by the Executive, following written
warning and a reasonable opportunity to cure if appropriate. If the
Executive's employment is terminated for Cause, the Company shall pay
the Executive his full accrued Base Salary at the rate in effect at
the time of such termination, as well as accrued Incentive
Compensation through the date of termination. Except as otherwise
provided in Section 6.3 hereof, the Company shall have no further
obligation to the Executive under this Agreement.
5.4 Termination by the Company Other than for Cause. In the event that
this Agreement is terminated for any reason by the Company (except for
a termination for "Cause" as defined in Section 5.3 above or for death
or disability), Executive shall be entitled to receive termination
benefits payable in a lump sum in an amount equal to the greater of
(i) the remaining Base Salary during the Employment Period or (ii) 12
months Base Salary. Executive shall also be entitled to receive
Incentive Compensation through the termination of the Employment
Period, which is December 31, 2002, payable in accordance with the
terms set forth in Paragraph 8 of Exhibit A. Except as provided
otherwise in Section 6.3 hereof, the Executive shall not be entitled
to any further payments under Section 4 except for any appropriate
benefits under Section 4.3 (e) available to terminated employees
generally. The Company shall provide Executive with at least ten (10)
days notice of any termination under this Section 5.4.
5.5 Voluntary Termination by Executive. At any time during the Employment
Period, the Executive may voluntarily terminate employment with the
Company upon ninety (90) days' written notice. In the event of such
termination, all rights, duties and obligations of both parties shall
cease to be effective upon the end of the ninety (90) day notice
period, except with respect to the Restricted Covenants, as defined in
Section 12. In the event that Executive terminates his employment with
the Company pursuant to this Section 5.5, the Company shall pay the
Executive his full accrued Base Salary at the rate in effect at the
time of such termination, as well as accrued Incentive Compensation
through the date of termination.
5.6 Retirement. The Executive may terminate his employment hereunder by
retirement during the Employment Period, provided the Company consents
to such retirement action. In such event, this Agreement shall
terminate automatically except with respect to the Restricted
Covenants and the Company's obligations under Section 6.3. All
benefits and compensation then accrued hereunder, and under any plans
provided for in Section 4.3 hereof, shall be paid promptly to the
Executive.
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6. Covenant Not to Compete.
6.1 Executive's Acknowledgment. Executive acknowledges that the covenants
in Section 6 are given in consideration for and in connection with
this Agreement. Executive agrees and acknowledges that in order to
assure the Company that it will retain its value as a going concern,
it is necessary that Executive undertake not to utilize his special
knowledge of the Business and his relationships with customer and
suppliers to compete with the Company. Executive further acknowledges
that:
(a) the Company is and will be engaged in the business of the design,
sale and administration of extended service contracts and extended
warranty programs for motor vehicles (the "Business");
(b) Executive will occupy a position of trust and confidence with the
Company during the Employment Period and, during such period and
Executive's employment under this Agreement, Executive will have
access to and have possession of trade secrets and confidential
information concerning the Company and the Business;
(c) the agreements and covenants contained in this Section 6 are
essential to protect the business and goodwill of the Company; and
(d) Executive's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be
irreparably damaged if Executive were to provide services to any
person or entity in violation of the provisions of this Agreement.
6.2 Competitive Activities. Executive hereby agrees that for the
Restricted Period as defined below, he will not, on behalf of himself,
or on behalf of any other person, company, corporation, partnership or
other entity or enterprise, directly or indirectly, as an employee,
proprietor, stockholder, partner, consultant, or otherwise, engage in
any business or activity competitive with the Business, anywhere in
the United States (the "Territory"); except (i) that Executive may
continue to own up to 25% of, and be a member of the board of
directors of Safeguard Products International, Inc. ("Safeguard"), so
long as (W) Executive is not involved in the business of Safeguard
(other than oversight of the business to the extent necessary to
discharge Executive's fiduciary duties as a member of the board of
directors of Safeguard); (X) no resources of the Company are used or
directed towards activities of Safeguard, except for brokerage
services provided by The Aegis Group, Inc. to Safeguard on an arms
length basis, consistent with past practice, and (Y) no business
opportunities of the Company of which Executive is or may become aware
are directed to Safeguard, and (ii) that nothing contained herein
shall be construed to prevent Executive from investing in the stock of
any competing corporation listed on a national securities exchange or
traded in the over-the-counter market, but only if Executive is not
involved in the business of said corporation and if Executive and his
associates (as such term is defined in Regulation 14(A) promulgated
under the Securities Exchange Act of 1934, as in effect on the date
hereof), collectively, do not own more than an aggregate of two
percent of the stock of such corporation. With respect to the
Territory, Executive specifically acknowledges that the Company has
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conducted or plans to conduct the Business throughout those areas
comprising the Territory and the Company intends to continue to expand
the Business throughout the Territory. For purposes hereof, the
Restricted Period shall mean the sum of (i) the period of time during
which the Executive is employed by the Company and (ii) the
Consultancy Period defined in Section 6.3 below.
6.3 Consultant Agreement. Executive agrees that for the Consultancy Period
as defined below, Employee shall continue to make his services
available to the Company as a consultant, at such times and in such
manner as is mutually agreeable to the parties. For Executive's
services as a consultant and in consideration for the covenant not to
compete as provided in this Section 6, the Company shall pay Executive
annually on the anniversary date of the termination the amounts set
forth in Paragraph 6 of Exhibit A. For purposes hereof, the
Consultancy Period shall mean the three year period commencing on the
date of the Executive's employment termination for any reason.
6.4 Solicitation of Employees. Without limiting the generality of the
provisions of Section 6.2 above, Executive agrees that during the
Restricted Period he shall not on behalf of himself or on behalf of
any other person, company, corporation, partnership or other entity or
enterprise, (except on behalf of the Company), directly or indirectly,
solicit employees, agents or consultants of the Company to become
employees, agents or consultants for him or for such businesses to the
extent such businesses are engaged in activities that compete with the
Business. Executive will not be in violation of this Section 6.4 in
the event that either Xxxxx Xxxxxxx and/or Xxxx Xxxxxx terminate their
employment with the Company during the Restricted Period.
7. Confidential Information. During the Confidential Information Period as
defined below, Executive shall keep secret and retain in strictest
confidence, and shall not, without the prior written consent of the Board
of Directors of the Company, furnish, make available or disclose to any
third party or use for the benefit of himself or any third party, any
Confidential Information, except in the normal course of business during
the period of time during which the Executive is employed by the Company.
As used in this Agreement, "Confidential Information" shall mean any
information relating to the business or affairs of the Company or the
Company's affiliates or the Business, including but not limited to
information relating to financial statements, customer identities,
potential customers, employees, suppliers, servicing methods, equipment,
product or service programs, strategies and information, databases and
information systems, analyses, profit margins or other proprietary
information used by the Company or the Company's affiliates; provided,
however, that Confidential Information shall not include any information
which is in the public domain or becomes known in the industry through no
wrongful act on the part of Executive. Executive acknowledges that the
Confidential Information is vital, sensitive, confidential and proprietary
to the Company or the Company's affiliates. For purposes hereof, the
Confidential Information Period shall mean (i) as to Confidential
Information generally, the sum of the Restricted Period plus two years and
(ii) as to Confidential Information that constitutes trade secrets as
defined by Georgia law, forever.
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8. Inventions and Other Intellectual Property. Executive hereby agrees that
all right, title and interest in and to all of the Executive's
"Discoveries" and work product made during the Employment Period related to
the Business of the Company, whether pursuant to this Agreement or
otherwise, shall belong solely to the Company, whether or not they are
protected or protectable under applicable patent, trademark, service xxxx,
copyright or trade secret laws. For purposes of this Section 8,
"Discoveries" means all inventions, designs, discoveries, improvements and
works of authorship, including, without limitation, any information
relating to the Company's know-how, processes, designs, computer programs
and routines, formulae, techniques, developments or experimental work,
work-in-progress, or business trade secrets made or conceived or reduced to
practice by the Company. Executive agrees that all work or other material
containing or reflecting any such Discoveries and work product shall be
deemed to be work made for hire and shall be owned by the Company without
further consideration. If it is determined that any such works are not
works made for hire, the Executive hereby assigns to the Company all of the
Executive's right, title and interest, including all rights of copyright,
patent, and other intellectual property rights, to or in such Discoveries
or work product. Executive covenants that he shall keep the Company
informed of the development of all Discoveries or work product made,
conceived or reduced to practice by the Company, in whole or in part, alone
or with others, which either result from any work Executive may do for, or
at the request of, the Company, or are related to the Company's present or
contemplated activities, investigations, or obligations. Executive further
agrees that at the Company's request and expense, he will execute any
assignments or other documents necessary to transfer any such Discoveries
or work product to the Company and to cooperate with the Company or its
nominee in perfecting the Company's title (or the title of the Company's
nominee) in such materials. The Executive grants the Company a permanent,
non-exclusive, paid-up and worldwide license under the Executive's
intellectual property rights in any Discoveries or work product that is
delivered to the Company by the Executive in connection with the
performance of services for the Company to use, have used, make, have made,
sell and have sold such Discoveries and reproduce in quantities, prepares
derivative works and publicly display and distribute such work product.
9. Interference with Relationships. During the Restricted Period, Executive
shall not, directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or
representative capacity intentionally solicit or encourage any present or
future customer, agent or supplier of the Company to terminate or otherwise
alter his, her or its relationship with the Company in any manner adverse
to the Company.
10. Return of Company Materials Upon Termination. Executive acknowledges that
all price lists, sales manuals, catalogs, binders, customer lists and other
customer information, supplier lists, financial information, and other
records or documents containing Confidential Information prepared by
Executive or coming into Executive's possession by virtue of Executive's
employment by the Company in any media is and shall remain the property of
the Company or the Company's affiliates as the case may be and that upon
termination of Executive's employment hereunder, Executive shall return
immediately to the Company all such items in his possession, together with
all
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copies thereof.
11. Effect on Termination. Notwithstanding the termination of Executive's
employment with the Company, those provisions contained in Sections 5, 6,
7, 8, 9 10 and 11 hereof shall remain in full force and effect.
12. Remedies. Executive acknowledges and agrees that the covenants set forth in
Sections 6, 7, 8, 9, and 10 of this Agreement (collectively, the
"Restricted Covenants") are reasonable and necessary for the protection of
the Company's business interests, that irreparable injury will result to
the Company if Executive breaches any of the terms of the Restrictive
Covenants, and that in the event of Executive's actual or threatened breach
of any such Restrictive Covenants, the Company will have no adequate remedy
at law. Executive accordingly agrees that in the event of any actual or
threatened breach by him of any of the Restrictive Covenants, the Company
shall be entitled to immediate temporary injunctive and other equitable
relief, without the necessity of showing actual monetary damages, subject
to hearing as soon thereafter as possible. Nothing contained herein shall
be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach, including the
recovery of any damage which it is able to prove.
13. Life Insurance. The Company may at its discretion and at any time apply for
and procure as owner and for its own benefit and at its own expense,
insurance on the life of Employee in such amounts and in some form or forms
as the Company may choose. Executive shall cooperate with the Company in
procuring such insurance and shall, at the request of the Company, submit
to such medical examinations, supply such information and execute such
documents as may be required by the insurance company or companies to whom
the Company has applied for such insurance. Executive shall have no
interest whatsoever in any such policy or policies, except that, upon the
termination of Executive's employment hereunder, Executive shall have the
privilege of purchasing any such insurance from the Company for an amount
equal to the actual premiums thereon previously paid by the Company.
14. Miscellaneous.
14.1 Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the parties and
supersedes any prior understandings or agreements between the parties,
written or oral, to the extent they related in any way to the subject
matter hereof.
14.2 No Assignment; Assumption. This Agreement is personal to the Executive
and shall not be assignable by the Executive, other than by last will
and testament or by the laws of descent and distribution with respect
to any amounts due hereunder. This Agreement shall inure to the
benefit of and be binding upon any successor to the business or assets
of the Company.
14.3 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
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14.4 Arbitration. Any controversy, claim or dispute of whatever nature
between Executive and the Company arising out of or relating to this
Agreement, or arising out of Executive's employment with the Company,
shall be resolved by binding arbitration before a single arbitrator in
New York, New York pursuant to the Employment Dispute Resolution Rules
of the American Arbitration Association. Each party shall bear its own
costs, expenses and fees, including without limitation attorneys' fees
and experts' fees with respect to any such arbitration. Judgment upon
any resulting arbitration award may be entered in any court of
competent jurisdiction.
14.5 Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered
or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to Company: Automobile Protection Corporation
Suite 100
00 Xxxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
with a copy to: Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx, Esq.
If to the Executive: Xxxxxx Xxxxx
Suite 100
00 Xxxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
with a copy to: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Either party may send any notice, request, demand, claim or the other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited
courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication
shall be deemed to have been duly given unless and until it actually is
received by the intended recipient. Either party may change the address to
which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other party notice in the
manner herein set forth.
14.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Georgia without
giving effect
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to any choice or conflict of law provision or rule (whether the State
of Georgia or any other jurisdiction) that would cause the application
of the law of any jurisdiction other than the State of Georgia.
14.7 Amendments. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by both the
Company and the Executive.
14.8 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
*****
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
/s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx
Automobile Protection Corporation
By: /s/ Xxxxx Xxxxxxx
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Title: President and CEO
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EXHIBIT A
INCENTIVE COMPENSATION
1. Executive will be eligible for Incentive Compensation payable quarterly,
subject to applicable tax withholding by the Company and adjustment after
completion of the Company's annual financial audit, for the period
commencing on the Effective Date and ending December 31, 1999 equal to 9.0%
of the 1999 Earnings Before Interest and Taxes (EBIT) before the Incentive
Compensation for Executive and Xxxxx Xxxxxxx is deducted, minus the EBIT
for the period from January 1, 1999 through the Effective Date. For
purposes of this Agreement, the EBIT before Executive and Xxxxx Xxxxxxx
Incentive Compensation will be referred to as EBITE.
2. In accordance with Section 4.2 of the Employment Agreement, Executive will
be eligible for Incentive Compensation payable quarterly, commencing with
the year ending December 31, 2000 according to a formula based on EBITE.
3. EBITE shall be calculated according to GAAP standards, and shall be
consistent with the accounting practices and conventions utilized by the
Company as of December 31, 1998 and will be certified annually by
Pricewaterhouse Coopers, LLC during the Company's annual financial audit.
Any Incentive Compensation amounts paid to Executive prior to completion of
the annual financial audit from Pricewaterhouse Coopers will be subject to
adjustment upon receipt of the results of the financial audit.
4. If there are any material changes to accounting practices (e.g. method of
depreciation, etc.) or conventions from year to year, EBITE shall continue
to be calculated according to the practices and conventions utilized by the
Company as of December 31, 1998, unless the parties mutually agree
otherwise.
5. The Incentive Compensation for calendar years commencing with the year 2000
shall be calculated according to the table below and will be paid quarterly
based on estimated Fiscal Year EBITE, subject to applicable tax withholding
by the Company and adjustment after completion of the Company's annual
financial audit. For purposes hereof, Fiscal Year shall mean January 1 to
December 31.
a. If the Fiscal Year EBITE for the Company is equal to or
exceeds 100% of the EBITE Target as set forth below, the
Executive's Performance Bonus shall be 4.5% of the Company's
Fiscal Year EBITE.
b. If the Fiscal Year EBITE for the Company is equal to or
exceeds 85% and is less than 100% of the EBITE Target as set
forth below, the Executive's Performance Bonus shall be 4.125%
of the Company's Fiscal Year EBITE.
c. If the Fiscal Year EBITE for the Company is equal to or
exceeds 70% and is less than 85% of the EBITE Target as set
forth below, the Executive's Performance Bonus shall be 3.75%
of the Company's Fiscal Year EBITE.
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d. If the Fiscal Year EBITE for the Company is less than 70% of the
EBITE Target as set forth below, the Executive's Performance Bonus
shall be 1.875% of the Company's Fiscal Year EBITE.
e. The EBITE Targets are:
85% OF 70% OF
EBITE EBITE EBITE
TARGET TARGET TARGET
YEAR ($000) ($000) ($000)
---- ------ ------ ------
2000 17,302 14,707 12,111
2001 23,048 19,591 16,134
2002 29,044 24,687 20,331
6. In accordance with Section 6.3 of the Employment Agreement, the Executive
shall be retained as a consultant for the Company for the Consultancy
Period. The annual amount paid pursuant to Section 6.3 of the Employment
Agreement shall be equal to one third (1/3) of the total cumulative annual
Incentive Compensation paid to the Executive for periods between January 1,
2000 and the termination date. This amount will be paid annually in a lump
sum on the first, second and third anniversaries of the date of the
employment termination, provided that Executive has fulfilled his
obligations set forth in Section 6 of the Employment Agreement.
7. In the event the Employment Agreement terminates by reason of disability or
death of the Executive, the Executive or the Executive's beneficiaries,
legal representatives or heirs, as appropriate, shall not be entitled to
any outstanding Incentive Compensation related to years after the date of
death. However, the Executive or Executive's beneficiaries, legal
representatives or heirs, as appropriate, shall be eligible to receive an
amount equal to the consulting fee specified in Paragraph 6 of this Exhibit
A, as if the Executive had not become disabled or had lived throughout the
Consultancy Period upon the same terms and conditions as specified in
Paragraph 6 of this Exhibit A.
8. In the event the Employment Agreement is terminated by the Company other
than for Cause, the Executive will be paid Incentive Compensation through
December 31, 2002, calculated and paid in accordance with Paragraph 5
hereof, using the actual year to date EBITE and pro rata EBITE Target as of
the date of Executive's termination.
9. Terms not otherwise defined herein shall have the same meanings as set
forth in the Employment Agreement.
