EXECUTIVE EMPLOYMENT AGREEMENT DATED AS OF OCTOBER 20, 2010 BETWEEN COMMAND CENTER, INC. AND JEFF R. MITCHELL
DATED
AS OF OCTOBER 20, 2010
BETWEEN
AND
XXXX
X. XXXXXXXX
This
EXECUTIVE EMPLOYMENT
AGREEMENT (the “Agreement”) made
effective as of the 20th day of October, 2010 (the “Effective Date”), by
and between COMMAND CENTER,
INC., a Washington corporation (hereinafter called “Company”) and XXXX X. XXXXXXXX, an
individual (hereinafter called “Executive”).
RECITALS
Company
desires to employ Executive and Executive desires to become employed by Company,
all on the terms and conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants set forth in this
Agreement, the parties hereto agree as follows:
1. Employment.
Subject
to the terms and conditions of this Agreement, Company hereby employs Executive,
and Executive hereby accepts such employment, as the Chief Financial Officer of
Company and in such other capacities and for such other duties and services as
will from time to time be mutually agreed upon by Company and Executive,
consistent with the position of the Chief Financial Officer and reporting
directly to the Company’s Chief Executive Officer and the Company’s Board of
Directors.
2. Full Time Occupation.
Executive
will devote Executive's entire business time, attention, and efforts as
reasonably necessary to the performance of Executive's duties under this
Agreement, and will serve Company faithfully and
diligently. Executive may serve on the board of directors of a
noncompeting company and, if approved in advance by the CEO, may accept limited
consulting assignments, but otherwise will not engage in any other employment
while employed by Company.
3. Base Salary.
(a) Salary. During
the Employment Period (as defined herein), Company will pay to Executive, as
full compensation for the services rendered by Executive, a base salary of not
less than $185,000 per annum (“Base
Salary”).
(b) Annual Review. Not
less often than annually, the Compensation Committee will review and evaluate
the Base Salary and other elements of compensation provided to Executive and
make any changes that are beneficial to Executive which the Committee, in its
sole and absolute discretion, determines to be appropriate.
1
4. Base Bonus Plan.
(a) Bonus. In
addition to the Base Salary, Executive will be eligible to receive annual bonus
compensation consisting of the Base Bonus and the Acquisition Bonus. The
Acquisition Bonus is addressed in Section 5 of this Agreement. The
maximum amount of the Base Bonus will be equal to the greater of 100% of the
annual Base Salary or $200,000.
(b) Components of the Base
Bonus. The Base Bonus will consist of three components: (i)
the EBITDA Growth Component, (ii) the Operational Parameters Component, and
(iii) the Personal Performance Component. The EBITDA Growth Component
will consist of up to 50% of the maximum Base Bonus and will be based upon year
over growth in the Company’s earnings before interest, taxes, depreciation and
amortization, computed according to generally accepted accounting
principles. The Operational Parameters Component will consist of up
to 25% of the maximum Base Bonus and will be based upon the same parameters as
are included in the incentive plan of the company’s regional vice presidents, as
those parameters may be changed from time to time, measured on a company-wide
basis. The Personal Performance Component will consist of up to 25% of the
maximum Base Bonus and will be based upon the attainment of personal performance
objectives that will be agreed upon between the CEO and Employee within 60 days
of signing of this contract and each anniversary thereafter.
(c) Development of Component
Specifics. Within 20 days after the first day of each fiscal
year, Company’s CEO, Executive and the Compensation Committee will develop and
agree upon the specifics of each Component of the Base Bonus for the fiscal
year, measured quarterly. The agreement shall be reduced to writing
and signed by each the CEO, Executive and the Chairman of the Compensation
Committee. The words “Compensation
Committee” as used herein, shall mean the Compensation Committee of the
Board of Directors of the Company or, if there is no Compensation Committee,
shall refer to the entire Board of Directors. If after dedicated
effort Executive, the CEO and the Compensation Committee are not able to reach
unanimous agreement on the specifics of each Component, the Components will
remain the same as the preceding year.
(d) Payment of
Bonus. The Base Bonus will be paid quarterly within 15 days
following the filing of the Company’s SEC report on Form 10-Q, or in the case of
the fourth quarter on Form 10-K. For the first two fiscal quarters of
the term of this Agreement, Executive will be deemed to qualify for the maximum
Base Bonus. Bonus payments for the first and last fiscal quarters of
the Employment Period (as hereafter defined) will be prorated based upon the
number of days Executive is employed in the quarter compared to the total number
of days in the quarter.
5. Acquisition
Bonus.
(a) Bonus. In
addition to the Base Bonus, Executive shall be eligible for an Acquisition
Bonus, based upon the gross margin realized by the Company directly from an
entity acquired by the Company, for each acquisition identified, investigated,
evaluated and negotiated by Executive and consummated by the
Company. For purposes of the Acquisition Bonus, an acquisition shall
consist of a transaction approved by the board of directors and the CEO, in
which the company, pursuant to an executed purchase contract, acquires and
retains from an unaffiliated entity revenue producing assets, whether tangible
or intangible, or both. With respect to each acquisition, the
Acquisition Bonus shall apply to the first two years following the date of
consummation of the acquisition transaction. “Gross margin” shall be
computed according to generally accepted accounting principles in the same
manner that Company computes gross margin on its profit and loss statements
filed with the SEC
2
(b) Exhibit A. Exhibit
A, which is attached to and made a part of this Agreement, sets forth the
applicable percentages for various levels of gross margins to be utilized in
computing the Acquisition Bonus.
(c) Payment. With
respect to each acquisition, the Acquisition Bonus shall be paid within 20 days
following each of the first two anniversaries of the consummation of the
acquisition transaction.
6. Stock Grant. As of
the Effective Date, Executive will be awarded 250,000 shares of common stock of
the Company, $0.001 par value. The shares awarded will be restricted
securities under Rule 144.
7. Stock Options.
(a) Initial
Grant. Executive is hereby awarded options to acquire 500,000
shares of the Company’s common stock, $0.001 par value at the closing price of
the shares on the Effective Date. These options shall be fully vested
on the date of the grant. Executive acknowledges receipt of a copy of
the 2008 Stock Incentive Plan pursuant to which the options are awarded, the
Prospectus and the Registration Statement. Exhibit B, which is
attached hereto and incorporated into this Agreement by reference, sets forth
the terms and conditions of the award. Exhibit B shall be binding
upon the parties only when it has been executed by Executive and on behalf of
the Company.
(b) Stock Options and Other Incentive
Based Awards. In the sole and absolute discretion of the
Compensation Committee, Executive may become eligible for future option awards
on such terms and conditions as the Committee directs, and on the same basis as
other executive officers of the Company.
8. Relocation
Expenses. For cost incurred in relocating to the Post Falls,
Idaho area, Company will reimburse Executive for moving and relocation costs,
house hunting trips and closing costs in an amount up to
$30,000. Company will reimburse Executive for pre-approved and
reasonable temporary housing costs in an amount up to $20,000.
9. Other Benefits.
(a) Reimbursement.
During
the Employment Period, Company will reimburse Executive for all travel and
entertainment expenses and other ordinary and necessary business expenses
incurred by Executive in connection with the business of Company and Executive's
duties under this Agreement. The term “business expenses”
will not include any item not deductible by Company for federal income tax
purposes. To obtain reimbursement, Executive will submit to Company
receipts, bills, or sales slips for the expenses incurred.
3
(b) Professional Memberships and
Continuing Professional Education. Company will pay for dues
and fees required for any professional licenses maintained by Executive,
membership in professional or industry associations, continuing education
requirements associated with any professional license and conferences and
seminars commonly attended by executives in similar companies.
(c) Vacation. Executive
will be entitled to four weeks paid vacation each year.
(d) Other Benefits.
During
the Employment Period, Executive will be entitled to participate in any group
insurance, pension, retirement, vacation, expense reimbursement, stock option,
and other plans, programs, and benefits approved by the Compensation Committee
and made available from time to time to executive employees of Company generally
during the term of Executive's employment hereunder. The foregoing
will not obligate Company to adopt or maintain any particular plan, program, or
benefit.
10. Board of
Directors. As of the Effective Date, Executive is appointed to
the Company’s Board of Directors. For subsequent terms, prior to any
annual meeting of the shareholders, Company will request the Board of Directors
to nominate Executive for election to the Board.
11. Term of
Employment.
(a) Employment Term. The term
of Executive's employment hereunder will commence on the Effective Date and will
continue for a period of three years following the Effective Date, unless and
until terminated by either party pursuant to the terms of this Agreement (such
period and any extensions thereof, the “Employment
Period”). The term of Executive's employment hereunder will automatically renew for successive
one-year terms, unless and until terminated by either party giving written
notice to the other not less than 30 days prior to the end of the then-current
term or as otherwise set forth in this
Agreement.
(b) Termination Under Certain
Circumstances.
Notwithstanding anything to the contrary herein
contained:
(i) Death. Executive's
employment will be automatically terminated, without notice, effective upon the
date of Executive's death.
(ii) Disability. If
Executive will fail to perform any of Executive’s job duties under this
Agreement as the result of illness or other incapacity, with or without
reasonable accommodation, for a period of more than eight consecutive weeks, or
for more than eight weeks within any six-month period, as determined by Company,
Company may, at its option, and upon notice to Executive, terminate Executive's
employment effective on the date of that notice.
(iii) Cause. Company may
terminate Executive’s employment during the Employment Period for
Cause. For purposes of this Agreement, “Cause” will mean any
of the following:
4
(1) Executive’s
indictment for, or conviction of, a crime involving moral turpitude whether or
not relating to Company;
(2) gross
negligence or willful misconduct by Executive in the performance of his duties
as an employee of Company;
(3) the
association, directly or indirectly, of Executive, for his profit or financial
benefit, with any person, firm, partnership, association, entity, or corporation
that competes with Company;
(4) the
disclosing or using of any material Confidential Information (as hereinafter
defined) of Company at any time by Executive, except as required in connection
with his duties to Company;
(5) the
breach by Executive of his fiduciary duty or duty of trust to Company,
including, but not limited to, the commission by Executive of an act of fraud or
embezzlement against Company;
(6) chronic
absenteeism;
(7) substance
abuse; or
(8) any
other material breach by Executive of any of the terms or provisions of this
Agreement, which other material breach is not cured within ten business days of
notice by the Company.
(iv) Change of
Control. In the event of a Change of Control (as defined
below), Company or Executive may, each at their respective options, upon written
notice to the other, terminate Executive’s employment by providing the other
party with 30 days' written notice after the effective date of the Change of
Control. For the purposes of this Agreement, a “Change in Control”
will be deemed to have occurred if and when:
(1) Turnover of
Board. The following individuals no longer constitute a
majority of the members of the Board of Directors of Company: (1) the
individuals who, as of the Effective Date, constitute the Board of Directors of
Company (the “Current
Directors”); (2) the individuals who thereafter are elected to the Board
of Directors of Company and whose election, or nomination for election, to the
Board of Directors of Company was approved by a vote of at least two-thirds
(2/3) of the Current Directors then still in office (such directors becoming
“Additional
Directors” immediately following their election); and (3) the individuals
who are elected to the Board of Directors of Company and whose election, or
nomination for election, to the Board of Directors of Company was approved by a
vote of at least two-thirds (2/3) of the Current Directors and Additional
Directors then still in office (such directors also becoming Additional
Directors immediately following their election);
5
(2) Tender Offer. A
tender offer or exchange offer is made whereby the effect of such offer is to
take over and control Company, and such offer is consummated for the equity
securities of Company representing 20% or more of the combined voting power of
Company’s then outstanding voting securities;
(3) Merger or
Consolidation. The shareholders of Company will approve a
merger, consolidation, recapitalization, or reorganization of Company, or
consummation of any such transaction if shareholder approval is not obtained,
other than any such transaction that would result in at least 75% of the total
voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being beneficially owned by the
holders of outstanding voting securities of Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction;
or
(4) Liquidation or Sale of
Assets. The shareholders of Company will approve a plan of
complete liquidation of Company or an agreement for the sale or disposition by
Company of all or a substantial portion of Company's assets (i.e., 50% or more
of the total assets of Company) to another person or entity, which is not a
wholly owned subsidiary of Company
(v)
Without
Cause
(1) Executive
may terminate this Agreement at any time upon giving to Company written notice
sixty days in advance of the proposed termination date.
(2) Company
may terminate this Agreement at any time before the expiration of this Agreement
without cause by giving to Executive written notice sixty days in advance of the
proposed termination date.
(vi) Result of
Termination.
(1) In
the event of the termination of Executive's employment by Company for cause
(pursuant to Section
11(b)(iii)) or by
Executive without cause (Section 11(b)(v)(1)
above), Executive will receive no further compensation under this Agreement
following the date of termination. For the fiscal quarter which
includes the date of termination, the Base Bonus and the Acquisition Bonus will
be prorated to the date of termination.
(2) In
the event of the termination of Executive's employment as the result of death or
disability (pursuant to Section 11(b)(i) or 11(b)(ii) above),
Executive or Executive’s personal representative or estate will continue to
receive Executive’s Base Salary, Base Bonus and Acquisition Bonus during
the six-month period following the date of termination of Executive’s
employment. The Acquisition Bonus, as referred to in the preceding
sentence, shall include only those transactions that have been consummated on or
before the date of termination of employment.
6
(3) In
the event of the termination of Executive’s employment as the result of change
of control (pursuant to Section 11(b)(iv) above),
Executive will continue to receive his Base Salary, the maximum Base
Bonus and the Acquisition Bonus for the remainder of the then-current contract
term following the date of termination of Executive’s employment pursuant to
this Agreement. The Acquisition Bonus, as referred to in the
preceding sentence, shall include only those transactions that have been
consummated on or before the date of termination of employment.
(4) In
the event of termination of Executive’s employment during the initial three year
term by Company without cause (pursuant to Section 11(b)(v)(2)
above), Executive will continue to receive his Base Salary, maximum Base
Bonus and the Acquisition Bonus for the remainder of the then-current contract
term following the date of termination of Executive’s employment. The
Acquisition Bonus, as referred to in the preceding sentence, shall include only
those transactions that have been consummated on or before the date of
termination of employment.
(5)
Executive will continue to be bound by Sections 12 and 13 of this Agreement
following termination of Executive’s employment on any basis set forth in this
Section 11(b).
12. Competition and Confidential
Information.
(a) Non-Competition.
During
the term of Executive’s employment with Company and for the period ending on the
latter of: (i) 12-months after the termination of Executive’s employment with
Company, regardless of the reason therefor, or (ii) 12 months after the final
payment of compensation to Executive pursuant to this Agreement, Executive will
not (whether directly or indirectly, as owner, principal, agent, stockholder,
director, officer, manager, executive, partner, participant, or in any other
capacity) engage or become financially interested in any competitive business
conducted within the Restricted Territory or solicit, canvas, or accept, or
authorize any other person, firm, or entity to solicit, canvas, or accept, from
any customers of Company or its subsidiaries, any business within the Restricted Territory
for Executive or for any other person, firm, or entity. As used
herein, “customers of
Company” will mean any persons, firms, or entities that purchased goods
or services from Company during the Employment Period; “competitive business”
will mean any business which sells or provides or attempts to sell or provide
products or services the same as or substantially similar to the products or
services sold or provided by Company or any of its subsidiaries; and the “Restricted Territory”
will mean the United States or, in the alternative, in the event any reviewing
court finds the United States to be overbroad or unenforceable, within 25 miles
of any existing or proposed office location of Company.
7
(b) Confidential Information. Executive
will maintain in strict secrecy all confidential or trade secret information
relating to the business of Company or any of its subsidiaries (the “Confidential
Information”) obtained by Executive in the course of Executive’s
employment, and Executive will not, unless first authorized in writing by
Company, disclose to, or use for Executive's benefit or for the benefit of any
person, firm, or entity at any time either during or subsequent to the term of
Executive's employment with Company, any Confidential Information, except as
required in the performance of Executive's duties on behalf of
Company. For purposes hereof, “Confidential
Information” will include, without limitation, any trade secrets,
knowledge, or information with respect to processes, policies plans and
objectives; any business methods or forms; any names or addresses of customers
or data on customers or suppliers; and any financial and operational goals and
budgets. Confidential Information may include information prepared by
or under the direction of Executive.
(c) Return of Equipment, Data, Books and Papers. Upon the
termination of Executive's employment with Company for any reason, Executive
will deliver promptly to Company all data, reports, manuals, memoranda,
drawings, plans and specifications; all cost, pricing, and other financial data;
all customer information; all marketing and sales plans, materials and
proposals; all other written or printed materials, as well as all data and
information which is electronically stored in any medium, all of which are the
property of Company; and all other materials which may contain Confidential
Information relating to the business of Company or any of its subsidiaries,
which Executive may then have in Executive's possession whether prepared by
Executive or not. Upon termination of employment, Executive shall
also immediately return to Company all computers, telephones and other equipment
belonging to Company in Executive’s possession.
(d) Disclosure of Information. Executive
will disclose promptly to Company, or its nominee, any and all ideas, designs,
processes, and improvements of any kind relating to the business of Company or
any of its subsidiaries, whether patentable or not, conceived or made by
Executive, either alone or jointly with others, during working hours or
otherwise, during the entire period of Executive's employment with Company, or
within six months thereafter.
(e) Assignment. Executive
hereby assigns to Company or its nominee, the entire right, title, and interest
in and to all discoveries and improvements, whether patentable or not, which
Executive may conceive or make during Executive's employment with Company, or
within six months thereafter, and which relate to the business of Company or any
of its subsidiaries.
(f) Equitable Relief. In the
event a violation of any of the restrictions contained in this Section 12 is established,
Company will be entitled to preliminary and permanent injunctive relief as well
as damages and an equitable accounting of all earnings, profits, and other
benefits arising from such violation, which right will be cumulative and in
addition to any other rights or remedies to which Company may be
entitled. In the event of a violation of any provision of this Section 12, the period for
which those provisions would remain in effect will be extended for a period of
time equal to that period beginning when such violation commenced and ending
when the activities constituting such violation will have been finally
terminated in good faith.
8
(g) Restrictions Separable. Each and
every restriction set forth in this Section 12 is independent and
severable from the others, and no such restriction will be rendered
unenforceable by virtue of the fact that, for any reason, any other or others of
them may be unenforceable in whole or in part.
(h) No Violation.
The
execution and delivery of this Agreement and the performance of Executive’s
services contemplated hereby will not violate or result in a breach by Executive
of, or constitute a default under, or conflict with: (i) any provision or
restriction of any employment, consulting, or other similar agreement; (ii) any
agreement by Executive with any third party not to compete with, solicit from,
or otherwise disparage such third party; (iii) any provision or restriction of
any agreement, contract, or instrument to which Executive is a party or by which
Executive is bound; or (iv) any order, judgment, award, decree, law, rule,
ordinance, or regulation or any other restriction of any kind or character to
which Executive is subject or by which Executive is bound. Executive
agrees to indemnify and hold Company and each of its officers, directors,
stockholders, employees, and agents (each an “Indemnitee”) harmless
for, from, and against any and all damages, losses, liabilities, fines,
penalties, costs, and expenses (including, without limitation, reasonable
counsel fees, costs, and expenses) incurred in the investigation, defense, or
settlement with respect to or arising out of any demand, claim, inquiry,
investigation, proceeding, action, or cause of action that any Indemnitee may
suffer or incur by reason of any breach of this Section 12.
13. Miscellaneous.
(a) Notices. All
notices, requests, demands, and other communications required or permitted under
this Agreement will be in writing and will be deemed to have been duly given and
received: (i) if mailed by registered or certified mail, three business days
after deposit in the United States mail, postage prepaid, return receipt
requested; (ii) upon confirmation of a receipt of a facsimile or e-mail
transmission; (iii) if hand delivered, upon delivery against receipt or upon
refusal to accept the notice; or (iv) if delivered by a standard overnight
courier, one business day after deposit with such courier, postage prepaid, in
each case, addressed to such party at the address set forth below:
(i) If to
Company:
0000 X
Xxxxx Xxxxxx
Xxxx
Xxxxx, Xxxxx 00000
Fax:
000-000-0000
Attn: Xxxxx
Xxxxxxx
with a copy
to:
0000 X
Xxxxx Xxxxxx
Xxxx
Xxxxx, Xxxxx 00000
Fax:
000-000-0000
Attn: Xxxxxx
Xxxxx
9
(ii) If to
Executive:
Xxxx X.
Xxxxxxxx
0000 X
Xxxxxxxxx
Xxxxx
x’Xxxxx, Xxxxx 00000
Either
party may change the address to which communications or copies are to be sent by
giving notice of such change of address in conformity with the provisions of
this Section
13(a)
for the giving of notice.
(b) Indulgences. Neither
any failure nor any delay on the part of either party to exercise any right,
remedy, power, or privilege under this Agreement will operate as a waiver
thereof, nor will any single or partial exercise of any right, remedy, power, or
privilege preclude any other or further exercise of the same or of any other
right, remedy, power, or privilege, nor will any waiver of any right, remedy,
power, or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power, or privilege with respect to any other
occurrence.
(c) Controlling Law, Jurisdiction and Venue. This
Agreement and all questions relating to its validity, interpretation,
performance, and enforcement will be governed by and construed in accordance
with the laws of the State of Idaho, notwithstanding any Idaho or other
conflict-of-interest provisions to the contrary. Jurisdiction of and
venue for any legal action between the parties shall be in the state and federal
courts serving Kootenai County, Idaho and the parties hereby consent to such
jurisdiction and venue.
(d) Binding Nature of
Agreement.
This
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors, and assigns
except that no party may assign or transfer such party's rights or obligations
under this Agreement without the prior written consent of the other
party.
(e) Execution in Counterparts. This
Agreement may be executed in any number of counterparts, each of which will be
deemed to be an original as against any party whose signature appears thereon,
and all of which will together constitute one and the same
instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
the parties reflected hereon as the signatories.
(f) Provisions Separable. The
provisions of this Agreement are independent of and separable from each other,
and no provision will be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or
unenforceable in whole or in part.
10
(g) Entire Agreement. This
Agreement contains the entire understanding between the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements, and conditions,
express or implied, oral or written, except as herein contained. The
express terms hereof control and supersede: (a)
any course of performance and/or usage of the trade inconsistent with any of the terms hereof; and (b) any
provision of any other plan or agreement maintained by Company for the benefit
of its employees generally inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by
an agreement in writing signed by the parties hereto.
(h) Paragraph Headings. The
paragraph headings in this Agreement are for convenience only; they form no part
of this Agreement and will not affect its interpretation.
(i) Gender. Words
used herein, regardless of the number and gender specifically used, will be
deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the context
requires.
(j) Number of Days.
In
computing the number of days for purposes of this Agreement, all days will be
counted, including Saturdays, Sundays, and holidays; provided, however, that if the
final day of any time period falls on a Saturday, Sunday, or holiday, then the
final day will be deemed to be the next day which is not a Saturday, Sunday, or
holiday.
IN WITNESS WHEREOF, the
parties hereto have executed this Executive Employment Agreement as of Effective
Date.
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COMMAND CENTER, INC., a
Washington
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|
corporation
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By:
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/s/ Xxxxx
Xxxxxxx
|
|
|
Xxxxx
Xxxxxxx, Chief Executive Officer
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||
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Date:
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October
20, 2010
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|
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EXECUTIVE
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||
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/s/ Xxxx
X. Xxxxxxxx
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||
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Xxxx
X. Xxxxxxxx, an individual
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Date:
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October
20,
2010
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11
Exhibit
A
Acquisition
Bonus
Sliding
Scale
| Year 1 |
Year
2
|
||||||||||||||||||||
| Acquired GM $'s Range |
Acquired
GM $'s Range
|
||||||||||||||||||||
| Minimum |
Maximum
|
Bonus
|
% |
Minimum
|
Maximum
|
Bonus
|
% | ||||||||||||||
| $ |
-
|
$ | 4,999,999 | 5.00 | % | $ | - | $ | 4,999,999 | 2.50 | % | ||||||||||
| $ |
5,000,000
|
$ | 9,999,999 | 4.00 | % | $ | 5,000,000 | $ | 9,999,999 | 2.00 | % | ||||||||||
| $ |
10,000,000
|
$ | 14,999,999 | 3.00 | % | $ | 10,000,000 | $ | 14,999,999 | 1.50 | % | ||||||||||
| $ |
15,000,000
|
$ | 19,999,999 | 2.00 | % | $ | 15,000,000 | $ | 19,999,999 | 1.00 | % | ||||||||||
| $ |
20,000,000
|
Beyond
|
1.00 | % | $ | 20,000,000 |
Beyond
|
0.50 | % | ||||||||||||
Example
#1
Command
Center acquires the accounts of Company A. The Gross Margin generated
from those acquired accounts in Years #1, #2 and #3 are $3,000,000, $4,000,000
and $5,000,000 respectively. The calculation would be as
follows:
|
Year
|
GM
$'s
|
Company
|
Employee
%
|
Company
$
|
Employee
$
|
|
||||||||||||||||
|
#1
|
$ | 3,000,000 | 95.00 | % | 5.00 | % | $ | 2,850,000 | $ | 150,000 | ||||||||||||
|
#2
|
$ | 4,000,000 | 97.50 | % | 2.50 | % | $ | 3,900,000 | $ | 100,000 | ||||||||||||
|
#3
|
$ | 5,000,000 | 100.00 | % | 0.00 | % | $ | 5,000,000 | $ | - | ||||||||||||
|
Totals
over 3 years
|
$ | 12,000,000 | $ | 11,750,000 | $ | 250,000 |
2.08
|
% | ||||||||||||||
Example
#2
Command
Center acquires the accounts of Company B. The Gross Margin generated
from those acquired accounts in Years #1, #2 and #3 are $6,000,000, $8,000,000
and $11,000,000 respectively. The calculation would be as
follows:
|
Year
|
GM
$'s
|
Company
%
|
Employee
%
|
Company
$
|
Employee
$
|
|
||||||||||||||||
|
#1
|
$ | 4,999,999 | 95.00 | % | 5.00 | % | $ | 4,749,999 | $ | 250,000 | ||||||||||||
| $ | 1,000,001 | 96.00 | % | 4.00 | % | $ | 960,001 | $ | 40,000 | |||||||||||||
| $ | 6,000,000 | $ | 5,710,000 | $ | 290,000 | |||||||||||||||||
|
#2
|
$ | 4,999,999 | 97.50 | % | 2.50 | % | $ | 4,874,999 | $ | 125,000 | ||||||||||||
| $ | 3,000,001 | 98.00 | % | 2.00 | % | $ | 2,940,001 | $ | 60,000 | |||||||||||||
| $ | 8,000,000 | $ | 7,815,000 | $ | 185,000 | |||||||||||||||||
|
#3
|
$ | 4,999,999 | 100.00 | % | 0.00 | % | $ | 4,999,999 | $ | - | ||||||||||||
| $ | 5,000,000 | 100.00 | % | 0.00 | % | $ | 5,000,000 | $ | - | |||||||||||||
| $ | 1,000,001 | 100.00 | % | 0.00 | % | $ | 1,000,001 | $ | - | |||||||||||||
| $ | 11,000,000 | $ | 11,000,000 | $ | - | |||||||||||||||||
|
Grand
Totals
|
$ | 25,000,000 | $ | 24,525,000 | $ | 475,000 |
1.90
|
% | ||||||||||||||
12
