PERFORMANCE SHARE RIGHT AGREEMENT
_________________________________
This Performance Share Right Agreement (``Agreement'') is
made this ____ day of _______, 1997, between Xxxxxxx Computer
Leasing Company, Inc., a Kentucky corporation (``Employer'') and
Xxx Xxxxx (``Employee''), who agree as follows:
1.Recitals. Pursuant to an Employment Agreement dated
___________, 1997 (the ``Employment Agreement ''
), Employee ha s
agreed to serve as President of the Employer. Employer desires
to provide certain additional financial inducements and
incentives to Employee pursuant to this Agreement.
2. Employment Services. The terms of the employment of
the Employee with the Employer are set forth in the Employment
Agreement. Unless otherwise indicated, capitalized terms used
herein shall have the same meanings as in the Employment
Agreement.
3. Performance Share Right.
(a) Employee is hereby granted a performance share
right as more fully described herein (the ``Performance Share
Right'' ) to provide Employee with the ability to participate in,
to the extent herein provided, the growth of the '' Value'' (as
defined herein) of the business of Employer during the term of
his employment with the Employer. The purpose of this
Performance Share Right is to provide Employee with additional
incentive to maintain and improve the financial performance and
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strength of the Employer. As a result of this Performance Share
Right, Employee shall receive, as additional Compensation:
(i) Within ten (10) days of the receipt of the
Proceeds from any Dissolution, Asset Sale, Stock Sale or
Reorganization Transaction '' (as defined herein), which is
consummated before the termination of this Agreement, an amount
equal to the following applicable percentage of the Proceeds:
(A) twenty-five percent (25%) of the
Proceeds if such transaction occurs during the first three years
of this Agreement;
(B) twenty percent (20%) of the Proceeds if
such transaction occurs after the third year but prior to the end
of the eighth year of this Agreement; and
(C) twelve and one-half percent (12.5%) of
the Proceeds if such transaction occurs after the eighth year of
this Agreement;
Such applicable amount of the Proceeds shall
be reduced by the following applicable amount:
(A) twenty-five percent (25%) of the
capitalization of Leasing Company if the transaction occurs
during the first three years of this Agreement; or
(B) twenty percent (20%) of the
capitalization of Leasing Company if the transaction occurs after
the third year but prior to the eighth year of this Agreement; or
(C) twelve and one-half percent (12.5%) of
the capitalization of Leasing Company if the transaction occurs
after the eighth year of this Agreement.
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(ii) Upon a termination of Employee's employment,
other than (A) a termination by Employee before the day which is
three (3) years from the date of this Agreement (except for a
termination caused by the Employee's death or ``Disability'' or
for Good Reason (as defined in the Employment Agreement)) or (B)
a termination of Employee by the Employer for ``Cause (as
defined in the Employment Agreement), Employee shall receive an
amount equal to twenty-five percent (25%) of the Value of the
Employer as of the date of the termination of the employment of
the Employee with the Employer, reduced by an amount equal to
twenty-five percent (25%) of the capitalization of Employer. In
the event that Employee is employed by Employer for longer than
three (3) years but less than eight (8) years, twenty percent
(20%) shall be substituted in lieu of twenty-five percent (25%)
in both respective places above. In the event that Employee is
employed by Employer for longer than eight (8) years, twelve and
one-half percent (12.5%) shall be substituted in lieu of twenty
percent (20%) in both respective places above.
(iii) In the event that the death of Employee
occurs when Employee's performance share right under this
Agreement has no Value , Company shall pay to Employee's
designated beneficiary fifty percent (50%) of any insurance
proceeds received by Company upon Employee's death.
For purposes of this Agreement, the following
(b)
definitions shall apply:
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(i) ` Dissolution'' shall mean statutory
dissolution of the Employer pursuant to the terms of Sections
_______, . of the Kentucky Revised Statutes or any
seqetssor provisions thereof.
(ii) Asset Sale shall mean any sale or other
disposition by Employer of all, or substantially all, of its
assets which would fall within the description of a ``Sale of
Entire Assets provided in Section _______ of the Kentucky
''
Revised Statutes or any successor provisions thereof.
(iii)
Stock Sale shall mean (
'' A) the sale
by Employer's shareholders of record of fifty percent (50%) or
more of the Employer's outstanding shares to any person or
persons who were not already shareholders at the time of the
first of such sales or who are not family members or trusts for
the benefit of family members of a shareholder; or (B) any
issuance of shares by Employer to a person who was not previously
a shareholder followed within sixty (60) days of such issuance by
the redemption of fifty percent (50%) or more of the shares
outstanding before such issuance.
(iv) Reorganization Transaction
`` '' shall mean a
reorganization as such term is defined in (A), (B), (C), or (D)
of Paragraph (1) of Section 368(a) of the Internal Revenue Code
of 1986, as amended from time to time.
(v) Proceeds shall mean (A) when used in
connection with a Dissolution, the total book value of the assets
of the Employer that are available to be distributed to
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Employer's shareholders reduced by all of Employer's liabilities;
(B) when used in connection with an Asset Sale, the total
purchase price paid for the assets sold pursuant to an Asset Sale
reduced by the amount of all of the Employer's liabilities not
assumed by the purchaser in connection with such Asset Sale; (C)
when used in connection with a Stock Sale, the price per share
paid to the shareholder(s) participating in such sale multiplied
by the total number of the outstanding shares as of the day
before such sale (or the day before an issuance followed by a
sale); or (D) when used in connection with a Reorganization
Transaction, the fair market value of the property (whether
stock, securities or other property) received by the shareholders
in exchange for the shareholders' stock or assets; provided that
the term Proceeds'' shall exclude any promissory notes, non-
cash assets or stock received as consideration in connection with
an Asset Sale, Stock Sale or Reorganization Transaction, until
such promissory notes are paid or such assets or stock are sold.
In the event that a Stock Sale or Reorganization
Transaction would occur between the shareholders of Xxxxxxx
Computer Resources, Inc. and an acquiring entity, the parties
agree that such a transaction shall constitute an Asset Sale or
Reorganization Transaction for purposes of this Agreement and the
parties agree to implement the procedure set forth in item (vi)
to determine the Value of Xxxxxxx Computer Leasing Company, Inc.
as a part of the total consideration paid in the Stock Sale or
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Reorganization Transaction for Xxxxxxx Computer Resources, Inc.'s
shares.
(vi) The Value shall be an amount mutually
agreed upon by Employer and Employee within thirty (30) days
after the termination of Employee's employment with Employer. In
the event Employer and Employee are unable between themselves to
agree upon a Value for all the outstanding stock of Employer,
Employer and Employee shall appoint a Big Six accounting firm or
top 25 investment banking firm with at least ten years experience
in valuing leasing companies to determine the fair market value
of 100% of the outstanding stock of Employer. The fair market
value of 100% of the stock Employer as determined by such
appraiser, shall be the Value for purposes of this Agreement.
The cost of such appraiser shall be divided equally between the
parties.
4. ___________ Termination.
In the event the Employee terminates his
employment with the Employer either (A) after the day which is
three (3) years from the date of this Agreement; or (B) as a
result of Employee's death or Disability or termination of
employment for Good Reason, the amount payable pursuant to
Section 3(a)(ii) shall be payable in sixty (60) equal monthly
installments commencing the first day of the month following the
determination of Value as set forth herein. Such payments may be
made in cash or, if the stock of Xxxxxxx Computer Resources, Inc.
is publicly traded at the time of payment, deliver, in lieu of
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cash, to Employee, registered or freely tradable shares of the
common stock of Xxxxxxx Computer Resources, Inc., having a fair
market value equal to 100% of the amount due Employee hereunder.
For purposes of this Section, the fair market value of the stock
shall be deemed to be the average of its bid and asked prices on
the date of distribution. If Employee should die prior to or
during such sixty (60) month period, prior to receiving all of
such payments, any remaining payments shall be paid to his
designated beneficiary, as due. Provided, however, in the event
that Employer would receive any insurance proceeds upon the death
of Employee, Employer would use up to 50% of such insurance
proceeds (but not more than the amount due) to apply against the
balance due hereunder and any remaining payments shall be made
over the remaining term, as due.
In the event of termination by the Employee before
(b)
the day which is three (3) years from the date of this Agreement
(except for termination caused by Employee's death or Disability
or termination of employment for Good Reason), Employee shall
forfeit any Performance Share Right otherwise earned and/or
payable pursuant to the terms of this Agreement.
(c) In the event of the termination of the employment
of the Employee for Cause, Employee shall forfeit any Performance
Share Right earned and/or payable pursuant to the terms of this
Agreement.
5. Public Offering. In the event of an initial public
offering of the shares of the Employer, the Employer and Employee
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shall use their best efforts to negotiate the impact of such
initial public offering on the Performance Share Right granted to
Employee hereunder.
6. Withholding. Employer shall withhold all applicable
federal, state and local taxes from every payment of compensation
made pursuant to the terms of this Agreement.
7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Kentucky. Any action arising out of this Agreement or the
claimed breach thereof shall only be brought in a court of
competent jurisdiction in Xxxxx County, Kentucky, and the parties
hereto hereby consent to jurisdiction and venue in such courts.
8. Entire Agreement. This Agreement and Employee's
Employment Agreement with Xxxxxxx Computer Resources, Inc. and
the Exhibits thereto contain the entire understanding of the
parties hereto with respect to the subject matter contained
herein and may be altered, amended or superseded only by an
amendment in writing, signed by the party against whom
enforcement of any waiver, change, modification, extension or
discharge is sought.
9. Xxxxxxx Computer Resources, Inc., the parent company of
Xxxxxxx Computer Leasing Company, Inc. hereby guarantees all the
obligations of Employer to Employee under the terms and
conditions of this Performance Share Right Agreement.
Signed on the date above.
COMPANY, INC.
By:
________________________________
___________________________________
XXX XXXXX
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