EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of this 15th day of October, 1996, is by
and between Bay State Computer Group, Inc. a Massachusetts corporation (the
"Company") and a wholly-owned subsidiary of U.S. Office Products Company
("USOP"), a Delaware corporation, and Xxxxx X. Xxxxxxxxx ("Employee").
RECITALS
The Company desires to continue to employ Employee and to have the benefit
of his skills and services, and Employee desires to continue employment with the
Company, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. EMPLOYMENT; TERM. The Company hereby employs Employee to perform the
duties described herein, and Employee hereby accepts employment with the
Company, for a term beginning on the date hereof and continuing for a period of
3 years (the "Term"). This Agreement may be terminated prior to the end of the
Term in the manner provided for in Section 6 below.
2. POSITION AND DUTIES. The Company hereby employs Employee as Director,
President, Treasurer and Clerk. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of a Director,
President, Treasurer and Clerk of the Company. Employee will report directly to
the Board of Directors of the Company (the "Board"). Employee hereby accepts
this employment upon the terms and conditions herein contained and agrees to
devote all of his professional time, attention, and efforts to promote and
further the business of the Company. Employee shall faithfully adhere to,
execute, and fulfill all policies established by the Company
3. COMPENSATION. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) BASE SALARY. Effective on the date hereof, the base salary payable to
Employee shall be $300,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures, but not less often than monthly.
On at least an annual basis, the Board will review Employee's performance and
may make increases to such base salary if, in its sole discretion, any such
increase is warranted.
(b) INCENTIVE BONUS. During the Term, Employee shall be eligible to receive
an incentive bonus up to the amount, based upon the criteria, and payable at
such times as are, specified in Exhibit A attached hereto. To the extent that
such bonus is to be determined in light of financial performance during a
specified fiscal period and this Agreement commences on a date after the start
of such fiscal period, any bonus payable in respect of such fiscal period's
results may be prorated. In addition, if the period of Employee's employment
hereunder expires before the end of a fiscal period, and if Employee is eligible
to receive a bonus at such time (such eligibility being subject to the
restrictions set forth in Section 6 below), any bonus payable in respect of such
fiscal period's results shall be prorated.
(c) PERQUISITES, BENEFITS, AND OTHER COMPENSATION. During the Term, Employee
shall be entitled to receive such perquisites and benefits as are customarily
provided by the Company to its employees, subject to such changes, additions, or
deletions as the Company may make from time to time, as well as such other
perquisites or benefits as may be specified from time to time by the Board.
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4. EXPENSE REIMBURSEMENT. The Company shall reimburse Employee for (or, at
the Company's option, pay) all business travel and other out-of-pocket expenses
reasonably incurred by Employee in the performance of his services hereunder
during the Term. All reimbursable expenses shall be appropriately documented in
reasonable detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense reporting
policy, as well as applicable federal and state tax record keeping requirements.
5. PLACE OF PERFORMANCE. Employee understands that he may be requested by
the Company to relocate from his present residence to another geographic
location in order to more efficiently carry out his duties and responsibilities
under this Agreement or as part of a promotion or a change in duties and
responsibilities. In such event, if Employee agrees to relocate, the Company
will provide Employee with a relocation allowance, in an amount determined by
the Company, to cover the reasonable costs of moving himself, his immediate
family, and their personal property and effects. The total amount and type of
costs to be covered shall be determined by the Company, in light of prevailing
Company policy at the time.
6. TERMINATION; RIGHTS ON TERMINATION. Employee's employment may be
terminated in any one of the followings ways, prior to the expiration of the
Term:
(a) DEATH. The death of Employee shall immediately terminate the Term, and
no severance compensation shall be owed to Employee's estate.
(b) DISABILITY. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been unable to perform the material
duties of his position on a full-time basis for a period of four consecutive
months, or for a total of four months in any six-month period, then 30 days
after written notice to the Employee (which notice may be given before or after
the end of the aforementioned periods, but which shall not be effective earlier
than the last day of the applicable period), the Company may terminate
Employee's employment hereunder if Employee is unable to resume his full-time
duties with or without reasonable accommodation at the conclusion of such notice
period. Subject to Section 6(f) below, if Employee's employment is terminated as
a result of Employee's disability, the Company shall continue to pay Employee
his base salary at the then-current rate for the lesser of (i) three months from
the effective date of termination, or (ii) whatever time period is remaining
under the Term. Such payments shall be made in accordance with the Company's
regular payroll cycle.
(c) TERMINATION BY THE COMPANY "FOR CAUSE." The Company may terminate the
Term 10 days after written notice to Employee "for cause," which shall be: (i)
Employee's material breach of this Agreement, which breach is not cured within
10 days of receipt by Employee of written notice from the Company specifying the
breach; (ii) Employee's gross negligence in the performance of his duties
hereunder, intentional nonperformance or intentional mis-performance of such
duties, or refusal to abide by or comply with the reasonable directives of the
Board, his superior officers, or the Company's reasonable policies and
procedures, which actions continue for a period of at least 10 days after
receipt by Employee of written notice of the need to cure or cease; (iii)
Employee's willful dishonesty, fraud, or misconduct with respect to the business
or affairs of the Company or USOP, and that in the judgment of the Company or
USOP materially and adversely affects the operations or reputation of the
Company or USOP; (iv) Employee's conviction of a felony or other crime involving
moral turpitude; or (v) Employee's abuse of alcohol or drugs (legal or illegal)
that, in the Company's judgment, materially impairs Employee's ability to
perform his duties hereunder. In the event of a termination "for cause," as
enumerated above, Employee shall have no right to any severance compensation.
(d) WITHOUT CAUSE. At any time after the commencement of employment, the
Company may, without cause, terminate the Term and Employee's employment,
effective 30 days after written notice is provided to the Employee. Should
Employee be terminated by the Company without cause, subject to Section 6(f)
below, Employee shall receive from the Company the base salary at the rate then
in effect for the longer of (i) three months from the date of termination, or
(ii) whatever time period is remaining under the Term. Such payments shall be
made in accordance with the Company's regular payroll cycle. If
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Employee resigns or otherwise terminates his employment for any reason or for no
reason, Employee shall receive no severance compensation.
(e) PAYMENT THROUGH TERMINATION. Upon termination of Employee's employment
for any reason provided above, Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements (including payments for
accrued vacation and sick leave, in each case in accordance with applicable
policies of the Company) due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to Employee only to the extent and in the manner expressly provided
above in this Section 6. With respect to incentive bonus compensation, Employee
shall be entitled to receive any bonus declared but not paid prior to
termination. In addition, in the event of a termination by the Company under
Section 6(b) or 6(d), Employee shall be entitled to receive incentive bonus
compensation through the end of the Company's fiscal year in which termination
occurs, calculated as if Employee had remained employed by the Company through
the end of such fiscal year, and paid in such amounts, at such times, and in
such forms as are determined pursuant to Section 3(b) above and Exhibit A
attached hereto. Except as specified in the preceding two sentences, Employee
shall not be entitled to receive any incentive bonus compensation after the
effective date of termination of his employment. All other rights and
obligations of USOP, the Company, and Employee under this Agreement shall cease
as of the effective date of termination, except that Employee's obligations
under Sections 7, 8, 9 and 10 below shall survive such termination in accordance
with their terms.
(f) RIGHT TO OFFSET. In the event of any termination of Employee's
employment under this Agreement, the Employee shall have no obligation to seek
other employment; provided, that in the event that Employee secures employment
or any consulting or other similar arrangement during the period that any
payment is continuing pursuant to the provisions of this Section 6, the Company
shall have the right to reduce the amounts to be paid hereunder by the amount of
Employee's earnings from such other employment, consulting or other arrangement.
(g) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may terminate his
employment hereunder for "Good Reason." If the Employee terminates employment
for a Good Reason, the Employee shall have no liability to the Company for any
losses or damages arising from the termination of employment under this
Agreement. Upon a termination for a Good Reason, Company shall have no liability
to Employee for payment of any severance compensation, provided, that the
foregoing shall not limit the Employee's right to pursue remedies for breach of
contract under this Agreement. As used herein, "Good Reason" shall mean the
continuance of any of the following after 10 days' prior written notice by
Employee to the Company, specifying the basis for such Employee's having Good
Reason to terminate this Agreement.
(i) a material adverse change in Employee's status, title, position or
responsibilities;
(ii) the assignment to Employee of any duties materially and adversely
inconsistent with the Employee's position as specified in Section 2 hereof
(or such other position to which he may be promoted), including status,
offices, responsibilities or persons to whom the Employee reports as
contemplated under Section 2 of this Agreement, or any other action by the
Company which results in material and adverse change in such position,
status, offices, titles or responsibilities;
(iii) any other material breach of this Agreement by the Company,
including the failure to pay Employee on a timely basis the amounts to which
he is entitled under this Agreement;
(iv) the Company's requiring the Employee to be based anywhere other
than within a thirty (30) mile radius of the Company's current principal
executive offices, except for required travel on the Company's business to
an extent substantially consistent with your present business travel
obligations.
7. RESTRICTION ON COMPETITION.
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(a) For so long as Employee continues to be employed by the Company and/or
any other entity owned by or affiliated with the Company or USOP and thereafter
for a period equal to the longer of (x) two years, or (y) the period during
which Employee is receiving any severance pay from the Company pursuant to
Section 6(d), Employee shall not, directly or indirectly, for himself or on
behalf of or in conjunction with any other person, company, partnership,
corporation, business, group, or other entity (each, a "Person"):
(i) engage, as an officer, director, shareholder, owner, partner,
member, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant, advisor, or sales representative, in any
business selling any products or services in direct competition with the
Company or USOP, within 100 miles of any location where the Company or USOP
conducts business (the "Territory");
(ii) call upon any Person who is, at that time, within the Territory, an
employee of the Company or USOP for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company or
USOP;
(iii) call upon any Person who or that is, at that time, or has been,
within one year prior to that time, a customer of the Company or USOP within
the Territory for the purpose of soliciting or selling products or services
in direct competition with the Company or USOP within the Territory; or
(iv) on Employee's own behalf or on behalf of any competitor, call upon
any Person as a prospective acquisition candidate who or that, during
Employee's employment by the Company or USOP was either called upon by the
Company or USOP as a prospective acquisition candidate or was the subject of
an acquisition analysis conducted by the Company or USOP.
(b) The foregoing covenants shall not be deemed to prohibit Employee from
acquiring as an investment not more than one percent of the capital stock of a
competing business, whose stock is traded on a national securities exchange or
through the automated quotation system of a registered securities association.
(c) It is further agreed that, in the event that Employee shall cease to be
employed by the Company or USOP and enters into a business or pursues other
activities that, at such time, are not in competition with the Company or USOP,
Employee shall not be chargeable with a violation of this Section 7 if the
Company or USOP subsequently enters the same (or a similar) competitive business
or activity or commences competitive operations within 100 miles of the
Employee's new business or activities. In addition, if Employee has no actual
knowledge that his actions violate the terms of this Section 7, Employee shall
not be deemed to have breached the restrictive covenants contained herein if,
promptly after being notified by the Company or USOP of such breach, Employee
ceases the prohibited actions.
(d) For purposes of this Section 7, references to "USOP" shall mean U.S.
Office Products Company, together with its subsidiaries and affiliates.
(e) The covenants in this Section 7 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. If any provision of this Section 7 relating to the time period
or geographic area of the restrictive covenants shall be declared by a court of
competent jurisdiction to exceed the maximum time period or geographic area, as
applicable, that such court deems reasonable and enforceable, said time period
or geographic area shall be deemed to be, and thereafter shall become, the
maximum time period or largest geographic area that such court deems reasonable
and enforceable and this Agreement shall automatically be considered to have
been amended and revised to reflect such determination.
(f) All of the covenants in this Section 7 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company or
USOP, whether predicated on this Agreement or otherwise, shall not constitute a
defense to
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the enforcement by USOP or the Company of such covenants; provided, that upon
the failure of the Company to make any payments required under this Agreement,
the Employee may, upon 30 days' prior written notice to the Company, waive his
right to receive any additional compensation pursuant to this Agreement and
engage in any activity prohibited by the covenants of this Section 7. It is
specifically agreed that the period of two years stated at the beginning of this
Section 7, during which the agreements and covenants of Employee made in this
Section 7 shall be effective, shall be computed by excluding from such
computation any time during which Employee is in violation of any provision of
this Section 7.
(g) If the time period specified by this Section 7 shall be reduced by law
or court decision, then, notwithstanding the provisions of Section 6 above,
Employee shall be entitled to receive from the Company his base salary at the
rate then in effect solely for the longer of (i) the time period during which
the provisions of this Section 7 shall be enforceable under the provisions of
such applicable law, or (ii) the time period during which Employee is not
engaging in any competitive activity, but in no event longer than the applicable
period provided in Section 6 above. If Employee is subject to a restriction on
competitive activity as a party to that certain Agreement and Plan of
Reorganization, dated as of October , 1996, by and among U.S. Office
Products Company, BSC Acquisition Corp., Xxxxx X. Xxxxxxxxx and Xxxxxx X. Xxxxx
(the "Merger Agreement"), then Employee shall abide by, and in all cases be
subject to, the restrictive covenants (whether in this Section 7 or in the
Merger Agreement) that, in the aggregate, impose restrictions on Employee for
the longest duration and the broadest geographic scope (taking into account the
effect of any applicable court decisions limiting the scope or duration of such
restrictions), it being agreed that all such restrictive covenants are supported
by separate and distinct consideration. This Section 7(g) shall be construed and
interpreted in light of the duration of the applicable restrictive covenants.
(h) Employee has carefully read and considered the provisions of this
Section 7 and, having done so, agrees that the restrictive covenants in this
Section 7 impose a fair and reasonable restraint on Employee and are reasonably
required to protect the interests of the Company and USOP, and their respective
officers, directors, employees, and stockholders. It is further agreed that the
Company and Employee intend that such covenants be construed and enforced in
accordance with the changing activities, business, and locations of the Company
and USOP throughout the term of these covenants.
8. CONFIDENTIAL INFORMATION. Employee hereby agrees to hold in strict
confidence and not to disclose to any third party any of the valuable,
confidential, and proprietary business, financial, technical, economic, sales,
and/or other types of proprietary business information relating to the Company
and/or USOP (including all trade secrets), in whatever form, whether oral,
written, or electronic (collectively, the "Confidential Information"), to which
Employee has, or is given (or has had or been given), access as a result of his
employment by the Company. It is agreed that the Confidential Information is
confidential and proprietary to the Company and/or USOP because such
Confidential Information encompasses technical know-how, trade secrets, or
technical, financial, organizational, sales, or other valuable aspects of the
Company's and USOP's business and trade, including, without limitation,
technologies, products, processes, plans, clients, personnel, operations, and
business activities. This restriction shall not apply to any Confidential
Information that (a) becomes known generally to the public through no fault of
the Employee; (b) is required by applicable law, legal process, or any order or
mandate of a court or other governmental authority to be disclosed; or (c) is
reasonably believed by Employee, based upon the advice of legal counsel, to be
required to be disclosed in defense of a lawsuit or other legal or
administrative action brought against Employee; provided, that in the case of
clauses (b) or (c), Employee shall give the Company reasonable advance written
notice of the Confidential Information intended to be disclosed and the reasons
and circumstances surrounding such disclosure, in order to permit the Company to
seek a protective order or other appropriate request for confidential treatment
of the applicable Confidential Information.
9. INVENTIONS. Employee shall disclose promptly to the Company and USOP any
and all significant conceptions and ideas for inventions, improvements, and
valuable discoveries, whether patentable or not, that are conceived or made by
Employee, solely or jointly with another, during the period of employment
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or within one year thereafter, and that are directly related to the business or
activities of the Company or USOP and that Employee conceives as a result of his
employment by the Company, regardless of whether or not such ideas, inventions,
or improvements qualify as "works for hire." Employee hereby assigns and agrees
to assign all his interests therein to the Company or its nominee. Whenever
requested to do so by the Company, Employee shall execute any and all
applications, assignments, or other instruments that the Company shall deem
necessary to apply for and obtain Letters Patent of the United States or any
foreign country or to otherwise protect the Company's interest therein.
10. RETURN OF COMPANY PROPERTY. Promptly upon termination of Employee's
employment by the Company for any reason or no reason, Employee or Employee's
personal representative shall return to the Company (a) all Confidential
Information; (b) all other records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, correspondence, reports, records, charts,
advertising materials, and other data or property delivered to or compiled by
Employee by or on behalf of the Company, USOP or their respective
representatives, vendors, or customers that pertain to the business of the
Company or USOP, whether in paper, electronic, or other form; and (c) all keys,
credit cards, vehicles, and other property of the Company or USOP. Employee
shall not retain or cause to be retained any copies of the foregoing. Employee
hereby agrees that all of the foregoing shall be and remain the property of the
Company or USOP, as the case may be, and be subject at all times to their
discretion and control.
11. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee, his employment by the
Company, and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client, or any other Person.
Further, Employee agrees to indemnify and hold harmless the Company and its
officers, directors, and representatives for any claim, including, but not
limited to, reasonable attorneys' fees and expenses of investigation, of any
such third party that such third party may now have or may hereafter come to
have against the Company or such other persons, based upon or arising out of any
non-competition agreement, invention, secrecy, or other agreement between
Employee and such third party that was in existence as of the date of this
Agreement. To the extent that Employee had any oral or written employment
agreement or understanding with the Company, this Agreement shall automatically
supersede such agreement or understanding, and upon execution of this Agreement
by Employee and the Company, such prior agreement or understanding automatically
shall be deemed to have been terminated and shall be null and void.
12. ASSIGNMENT; BINDING EFFECT. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience, and skills. Employee agrees, therefore, that he
cannot assign all or any portion of his performance under this Agreement. This
Agreement may not be assigned or transferred by the Company without the prior
written consent of Employee. Subject to the preceding two sentences, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Notwithstanding the foregoing, if Employee accepts
employment with a subsidiary or affiliate of USOP other than the Company, unless
Employee and his new employer agree otherwise in writing, this Agreement shall
automatically be deemed to have been assigned to such new employer (which shall
thereafter be an additional or substitute beneficiary of the covenants contained
herein, as appropriate), with the consent of Employee, such assignment shall be
considered a condition of employment by such new employer, and references to the
"Company" in this Agreement shall be deemed to refer to such new employer. If
the Company is merged with or into another subsidiary or affiliate of USOP, such
action shall not be considered to cause an assignment of this Agreement, and the
surviving or successor entity shall become the beneficiary of this Agreement and
all references to the "Company" shall be deemed to refer to such surviving or
successor entity. It is intended that USOP will be a third-party beneficiary of
the rights of the Company under this Agreement. No other Person shall be a
third-party beneficiary.
13. COMPLETE AGREEMENT; WAIVER; AMENDMENT. This Agreement is not a promise
of future employment. Employee has no oral representations, understandings, or
agreements with the Company or any of
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its officers, directors, or representatives covering the same subject matter as
this Agreement. This Agreement together with the Merger Agreement, is the final,
complete, and exclusive statement and expression of the agreement between the
Company and Employee with respect to the subject matter hereof and thereof, and
cannot be varied, contradicted, or supplemented by evidence of any prior or
contemporaneous oral or written agreements. This written Agreement may not be
later modified except by a further writing signed by a duly authorized officer
of the Company and Employee, and no term of this Agreement may be waived except
by a writing signed by the party waiving the benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: Bay State Computer Group, Inc.
00 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to: U.S. Office Products Company
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxx X. Director, Esq.
To Employee: Xxxxx X. Xxxxxxxxx
0 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Notice shall be deemed given and effective three days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or, if sent by express delivery, hand
delivery, or facsimile, when actually received. Either party may change the
address for notice by notifying the other party of such change in accordance
with this Section 14.
15. SEVERABILITY; HEADINGS. If any portion of this Agreement is held invalid
or inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 7(e) above. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
16. EQUITABLE REMEDY. Because of the difficulty of measuring economic losses
to the Company and/or USOP as a result of a breach of the restrictive covenants
set forth in Sections 7, 8, 9 and 10, and because of the immediate and
irreparable damage that would be caused to the Company and/or USOP for which
monetary damages would not be a sufficient remedy, it is hereby agreed that in
addition to all other remedies that may be available to the Company or USOP at
law or in equity, the Company and USOP shall be entitled to specific performance
and any injunctive or other equitable relief as a remedy for any breach or
threatened breach of the aforementioned restrictive covenants.
17. ARBITRATION. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in accordance with the rules of the American Arbitration Association
then in effect. The arbitrators shall not have the authority to add to, detract
from, or modify any provision hereof nor to award punitive damages to any
injured party. A decision by a majority of the arbitration panel shall be final
and binding. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. The direct expense of any arbitration proceeding shall be
borne by the Company. Each party shall bear its own counsel fees. The
arbitration proceeding shall be held in Boston, Massachusetts. Notwithstanding
the foregoing, the Company and/or USOP shall be
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entitled to seek injunctive or other equitable relief, as contemplated by
Section 16 above, from any court of competent jurisdiction, without the need to
resort to arbitration.
18. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the Commonwealth of Massachusetts without regard to its
conflict of laws principles.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed as of the date first written above.
BAY STATE COMPUTER GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------------------------------
Name: Xxxxxx X. Xxxxx
Title:
EMPLOYEE:
/s/ Xxxxx X. Xxxxxxxxx
---------------------
Xxxxx X. Xxxxxxxxx
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EXHIBIT A
Under USOP's Incentive Bonus Plan, Employee will be eligible to earn up to
100% of Employee's base salary in bonus compensation, payable out of a bonus
pool determined by the Board of Directors of USOP or a compensation committee
thereof, depending upon the achievement of specified criteria and payable in the
form of cash, stock options, or other non-cash awards, in such proportions, and
in such forms, as are determined by the Board of Directors of USOP or a
compensation committee thereof. Bonuses under the Incentive Bonus Plan will be
determined by measuring Employee's performance, the Company's performance, and
USOP's performance based on the following criteria, weighted as indicated, and
measured against target performance levels established by the Board of Directors
of USOP or such compensation committee: (i) USOP's profits--25%; (ii) the profit
of the Company--50%; and (iii) revenue growth of the Company due to
acquisitions--25%.
The Company and the Employee agree that for purposes of determining the
Company's performance element (criterion (ii) of the preceding formula), any
bonus payable for the period ending on USOP's fiscal year ending April 26, 1997
(which bonus shall be prorated based on Employee's term of service between the
date hereof and such fiscal year end), the Company's target earnings before
interest and taxes for the Company's fiscal year ending March 31, 1997 shall be
$4,500,000, prorated for the period from the date of this Agreement through
April 26, 1997. This performance target shall apply solely for USOP's fiscal
year ending April 26, 1997.
The Company's earnings target referred to in the preceding paragraph will
determined one component of the Employee's eligibility for a bonus award. The
determination of the amount of any bonus awarded to Employee for the period
ending April 26, 1997 will be made by the Compensation Committee of USOP's Board
of Directors based on, among other factors, the amount by which the Company's
earnings exceed the foregoing target.
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