Exhibit 99.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, made as of this 3rd day of November, 1997, by
and between ENVIRONMENTAL PROTECTION IMPROVEMENT COMPANY, INC. (EPIC), a New
Jersey corporation, with its principal offices located at 000 Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company"), which is a wholly-owned
subsidiary of Compost America Holding Company, Inc. ("CAHC") and XXXXXX X.
XXXXX, an individual, residing at 000 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires the Executive to be employed by the Company,
and the Executive is desirous of such employment, upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties intending to be
legally bound hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Agreement" means this Employment Agreement, as the same may,
from time to time, be amended in accordance with the provisions hereof.
(b) "Cause" means with respect to the Executive:
(i) Defrauding the Company in any way;
(ii) Being convicted of any crime that is punishable by
imprisonment for more than thirty (30) days and is not traffic or vehicular
related (whether or not the Executive is sentenced to imprisonment) or that
offends principles, generally
accepted in the community, of general or business morals and ethics or
generally accepted principles of natural or moral law or that is such that
his conviction thereof would, by commonly accepted standards of the
professional community, justify his discharge;
(iii) An action taken in knowing contradiction to the best
interests of the Company;
(iv) Repeated refusal to perform job functions reasonably
required of him under this Agreement; or
(v) Any other act which has a direct, substantial and adverse
effect on the Company's reputation or business.
(c) "Company" means EPIC and its successors, whether now or
hereafter existing.
(d) "Competing Organization" means any person or legal entity
engaged in the rail transportation of sludge, municipal solid waste,
contaminated soils, dredge spoils and the like (collectively "Waste
Materials") in the United States of America.
(e) "Confidential Information" means any information in which the
Company has a legally protectable interest in preventing its unauthorized or
unintended disclosure to third parties and which is kept confidential by the
Company in the operation of its business or the conduct of its research and
which is not otherwise available to the public and is not available from any
source other than the Company, including, by way of illustration but not
limitation: source codes, object codes, engineering and other sketches,
drawings and tracings, specifications, engineering data,
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memoranda, designs, sources of supplies and materials, cost and financial
data, processes, production machines and equipment, procedures, customer
lists, marketing plans and business forecasts, together with all the
Company's Know-how and Technical Data relating thereto.
(f) "Customer" means any individual, firm, partnership,
corporation, company, joint venture or governmental or military unit or any
other entity which has a contract with the Company during the Term of this
Agreement for the transportation of Waste Materials.
(g) "Disability" means the Executive's inability to perform his
duties under this Agreement for a period of six (6) consecutive months, or
for eighty percent (80%) or more of the normal working days during the nine
(9) consecutive months then ending, because of his physical or mental illness
or infirmity. Should the Executive suffer a Disability as defined herein,
the Executive shall receive full Salary (as hereinafter defined) and
benefits, as set forth herein, for two (2) years from the date of the
Disability and, thereafter, one-half Salary for the balance of the Term of
this Agreement.
(h) "Future Inventions" means all inventions, discoveries, ideas,
concepts, designs and improvements of any sort, whether patentable,
copyrightable or not, relating in any way to the business of the Company with
respect to the rail transportation of Waste Materials, which the Executive
may, during the Term of
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this Agreement, conceive or invent, whether alone or jointly with others, and
whether during business hours or thereafter, and such term includes all
"know-how" and Technical Data relating to the foregoing, and all letters
patent and copyrights of the United States or any other country which may be
issued in connection with the foregoing.
(i) "Principal Office" means the principal office of the Company,
which currently is located in Denville, New Jersey. The Company represents
and warrants that during the Term of this Agreement, it will not require the
Executive to work at a location other than the Principal Office of the
Company, or if the Company elects to move the Principal Office, at a location
which is (a) more than thirty miles from the place where the Principal Office
of the Company is located on the effective date of this Agreement or (b)
which is more than five miles from the intersections of Routes 287, 202, 22
and 206 in New Jersey. If the Company requires the Executive to work at a
location which is (a) more than thirty miles from the place where the
Principal Office of the Company is located on the effective date of this
Agreement or (b) more than five miles from the intersections of Routes 287,
202, 22 and 206 in New Jersey, such requirement shall be deemed a termination
by the Company of this Agreement pursuant to Section 9(e) of this Agreement,
unless an alternative agreement regarding Principal Office is entered into
between the Company and the Executive.
(j) "Technical Data" means all written, printed and
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other tangible materials embodying or containing Know-how, and includes,
without limiting the generality of the foregoing, all correspondence,
designs, processes, source codes, object codes, engineering sketches,
drawings and tracings, specifications and engineering data, reporting
formats, memoranda, notebooks, and all copies thereof, together with all
models and prototypes of every description.
(k) "Term" means the period from the date of the execution of this
Employment Agreement to September 15, 2002 unless earlier terminated as
provided herein.
2. Employment. The Company hereby employs the Executive, and the
Executive hereby accepts such employment, upon the terms and subject to the
conditions set forth in this Agreement.
3. Duties. The Executive shall be employed by the Company as its
President and Chief Executive Officer and shall perform such duties and
render such services consistent therewith as may from time to time be
reasonably required of him by the Company's Chairman.
4. Extent of Service. During the Term of this Agreement, the Executive
agrees that he will:
(a) Serve the Company faithfully, diligently and to the best of his
ability under the reasonable direction of the Board;
(b) Devote his best efforts, attention and energy to the
performance of his duties hereunder and to promoting and furthering the
interests of the Company, taking, however, from time
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to time, reasonable vacations consistent with the performance of his
obligations hereunder and the vacation policies of the Company applicable to
all executives generally, not to exceed four (4) weeks in any calendar year.
The Executive shall be additionally compensated by the Company at his regular
weekly salary rate, for up to a maximum of two weeks unused vacation time per
year;
(c) Not without the prior written approval of the Chairman of the
Company, which approval shall not be unreasonably withheld, become associated
with or engaged with any business other than that of the Company, and will do
nothing inconsistent with his duties to the Company.
5. Term of Employment. The term of employment of the Executive under
this Agreement shall be guaranteed for the Term, unless terminated pursuant
to Paragraph 9 of this Agreement.
6. Basic Compensation; Bonus As basic compensation for the services to
be rendered hereunder by the Executive during the Term of this Agreement, the
Company agrees to pay to the Executive and the Executive agrees to accept, an
initial annual cash salary (the "Salary") of $325,000. On and after April
30, 1998, for each year during the Term, the Executive shall be entitled to
an annual bonus (the "Bonus") as specified on Schedule A attached hereto (the
"Bonus Formula"). The Salary payable to the Executive hereunder shall be paid
in equal installments during the Term, or in such other manner as shall be
consistent with the payroll policies of the Company applicable to all
executives. The Bonus shall be
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calculated in accordance with the Bonus Formula as of April 30th of each year
and shall be paid in a single installment each year within ninety (90) days
thereafter. At the sole option of the Executive, for any given year during
the Term of this Agreement, the Executive may choose to receive his Bonus in
either (a) cash or (b) unregistered common shares, no par value, of CAHC
("Shares") valued at the greater of (i) $2.00 per Share or (ii) eighty (80%)
percent of the last sale price of the Shares on the date payment is due.
7. Other Compensation. Upon the execution of this Agreement, the
Company shall issue to the Executive options to purchase 1,500,000
unregistered shares of the Company's common stock, no par value, at an option
price of $1.00 per share. 500,000 of these options will vest immediately
upon execution of this Agreement 200,000 on September 15, 1998, 200,000 on
September 15, 1999, 200,000 on September 15, 2000 and 200,000 on September
15, 2001 and 200,000 on September 15, 2002. All options not otherwise
exercised shall expire on September 16, 2002.
If, in the case of any offering of common shares by CAHC, within ten days
after Executive has been made aware by CAHC of its intention to effect a
registration of any of its common shares (otherwise than pursuant to a
registration statement on Form S-8 or similar form), the Executive may
request and CAHC shall honor the Executive's request that any common shares
of CAHC owned by the
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Executive be included in the registration statement.
Notwithstanding the foregoing, if the underwriter consents to the
inclusion in the registration statement of less than all shares proposed to
be offered by selling shareholders, including the Executive, then the amount
of shares to be sold for the account of each selling shareholder shall be
reduced proportionately in the ratio by which the amount each selling
shareholder proposes to sell bears to the total amount of shares which the
underwriter will permit to be sold for the account of all selling
shareholders.
In connection with any offering of shares registered pursuant to this
Agreement, CAHC (i) shall furnish to the Executive such number of copies of
any prospectus (including any preliminary prospectus, or supplement) as he
may reasonably request in order to effect the offering and sale of the shares
to be offered and sold, but only while CAHC shall be required under the
provisions hereof to cause the registration statement to remain current for
not more than six months, and (ii) take such action as shall be necessary to
qualify the shares covered by such registration statement under such blue sky
or other state securities laws for offer and sale as Employee shall request;
provided, however, that CAHC shall not be obligated to qualify as a foreign
corporation to do business under the laws of any jurisdiction in which it
shall not then be qualified or to file any general consent to service of
process in any jurisdiction in which such a consent has not been previously
filed. If requested by CAHC, in connection with a piggyback sale
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of the Shares covered hereunder, the Executive shall enter into an
underwriting agreement with a managing underwriting or underwriters selected
by CAHC and shall enter into an agreement with CAHC containing
representations, warranties, indemnities and agreements then customarily
included by an issuer or selling shareholder in underwriting agreements with
respect to secondary distributions. In connection with any offering of shares
registered pursuant to this Agreement, CAHC shall (x) furnish to the
underwriters, at CAHC's expense, unlegended certificates representing
ownership of the shares being sold in such denominations as requested and (y)
instruct any transfer agent and registrar of the shares to release any stop
transfer order with respect to shares included in any registration becoming
effective pursuant to this Agreement. CAHC shall use its best efforts to keep
such registration statement current for a period of six months. CAHC shall in
all events pay all expenses, fees, and disbursements of any counsel,
accountants and other consultants representing CAHC in connection therewith.
8. Other Benefits.
(a) General Executive Benefits. The Executive shall receive
medical insurance coverage provided by the Company to its executives
generally and/or participate in the best of any other similar plan or
arrangement, or other fringe benefit provided by Company to its executives
generally. The Executive shall also be entitled to participate in any stock
bonus, purchase or option plan and any bonus or profit sharing plan provided
for the Executive
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specifically or to any group of executives of the Company of which the
Executive is made a member by express provision of such plan.
(b) Expense Reimbursement. The Company shall reimburse the
Executive for reasonable out-of-pocket expenses incurred in connection with
the Company's business, including travel expenses, food, and lodging while
away from home, subject to such policies as the Company may from time to time
reasonably establish for its employees and subject to substantiation of
expenses as required under applicable federal and state tax laws and
regulations.
(c) Automobile Allowance. The Company will provide the Executive
with a car allowance of $600 per month to be paid to the Executive when
installments of Salary are paid.
(d) Officers and Directors Liability Insurance. The Company shall
purchase Officers and Directors Liability Insurance which shall cover the
Executive in an amount and with coverage to be determined by the Company.
9. Termination.
(a) The Term of this Agreement and the employment of the Executive
hereunder shall terminate in the event of the death of the Executive and, at
the option of the Company, upon thirty (30) days prior written notice to the
Executive, upon the Disability of the Executive. During the period of any
Disability, the Executive shall receive the compensation set forth in
Paragraph 1(g) herein.
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(b) In addition to the provisions of Paragraph 9 (a) above, the
Company may also, for Cause, elect to terminate the Term of this Agreement
and the employment of the Executive hereunder by ten (10) days' prior written
notice to the Executive. Upon any such termination for Cause, the Executive
shall no longer be entitled to receive his Salary or any other benefits under
this Agreement.
(c) The Executive shall have the right to terminate this Agreement
upon written notice given to the Company (i) at least three (3) months prior
to his intended date of resignation, in which case the Executive shall
receive no compensation or other benefits after the date of termination, but
shall receive his Base Salary and Bonus, pro-rata, through the date of
termination, or (ii) upon his Disability, in which case he shall receive
compensation in accordance with Paragraph 1 (g) herein.
(d) In the event of a merger or combination in which the Company is
not the surviving entity, or of a sale of all or substantially all of the
Company's assets, the Company may, at its sole option (1) upon thirty (30)
days' prior written notice to the Executive, assign this Agreement and all
rights and obligations under it to any business entity that succeeds to all
or substantially all of the Company's business through that merger or
combination or sale of
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assets, or (2) on at least thirty (30) days' prior written notice to the
Executive, terminate this Agreement effective on the date of the merger or
combination or sale of assets. Such termination shall constitute a
"Termination without Cause" under Paragraph 9(e) hereof.
(e) Termination without Cause. Should the Executive be terminated
for any reason other than for Cause, Disability or the expiration of this
Agreement (including a change of the Executive's place of employment as
provided in Paragraph 1(i) above), the Executive shall be entitled to receive
payments from the Company as follows:
(i) An amount equal to all the remaining installments of
Salary and Bonus, if any, that would otherwise be payable to the Executive
under this Agreement, payable in equal monthly installments, beginning seven
(7) days after the date of such termination;
(ii) The immediate vesting of all options, pension plans and
other benefit packages in which the Executive was a participant at the time
of his termination; and
(iii) Such additional payments and other compensation as may be
reasonable under the circumstances and approved by the Board of Directors of
the Company in the event that the termination is due to a merger of the
Company into another company, or, the Company is sold to third parties.
10. Representations and Warranties of the Executive as to Conflicts.
The Executive hereby represents and warrants to the Company that his
employment by the Company does not and will not violate any agreement or
instrument to which he is a party or by
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which he is bound, and the Executive agrees that he will indemnify and hold
harmless the Company, its directors, officers and employees against any
claims, damages, liabilities and expenses (including reasonable attorneys'
fees) which may be incurred, including amounts paid in settlement, by and of
them in connection with any claim based upon or related to a breach of the
Executive's representation and warranty set forth in this Paragraph 10. In
the event of any claim based upon or related to a breach of the Executive's
representation and warranty set forth in this Paragraph 10, the Company will
give prompt notice thereof, in writing, to the Executive and the Executive
shall have the right to defend such claim with counsel reasonably
satisfactory to the Company.
11. Future Inventions. The Executive shall assign and convey to the
Company, and hereby does assign and convey to the Company, and the Company
hereby accepts, all of the Executive's right, title and interest in and to
all Future Inventions made or conceived during the Term of this Agreement,
and the Executive hereby agrees that he shall, without the payment of royalty
or any other consideration to him therefor:
(a) Inform the Company promptly and fully of each such Future
Invention by a written report reasonably satisfactory to the Company;
(b) Apply, at the Company's request and expense, for United States
and foreign letters patent, copyright, trademark or service xxxx as the case
may be, either in the Executive's name or
13
otherwise as the Company shall direct;
(c) Assign and convey to the Company, and he hereby does assign and
convey to the Company, all of his right, title and interest in and to
applications for United States and foreign letters patent, copyrights,
trademarks and service marks and to any letters patent, copyrights,
trademarks and service marks which may be issued upon any such Future
Invention;
(d) Deliver promptly to the Company, without charge to the Company
but at its expense, such written instruments, and do such other acts, as may
be reasonably necessary, in the opinion of the Company, to obtain and
maintain United States and foreign letters patent, copyrights, trademarks or
service marks on each such Future Invention and to vest the Executive's
entire right, title and interest thereto in the Company; and
(e) Grant to the Company, and he hereby does grant to the Company,
prior to any further assignment of the Executive's right, title and interest
to the Company in any Future Invention as required above, the royalty-free
right to use in its business, and to make, have made, use and sell products,
processes, services, writings and marks based upon or related to such Future
Invention made or conceived by the Executive.
12. Confidentiality.
(a) During the Term of this Agreement and at all times thereafter,
the Executive will not use Confidential Information for his own benefit or
for the benefit of any person or legal entity
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other than the Company, nor will he discuss the same with any other person or
legal entity, except as reasonably required to conduct the business of the
Company in the ordinary course or by legal process, provided, however, that
any obligation which the Executive may have pursuant to this Agreement to
keep certain information confidential shall not prevent him from disclosing
any or all such information to the extent such disclosure is reasonably
required in connection with the preparation of closing adjustments or
financial statements as contemplated by that certain Stock Purchase Agreement
dated [ , 1997] by and among Xxxxxx X. Xxxxx, Compost America Holding
Company, Inc. and X.X. Xxxxx Construction Co., Inc. (the "Stock Purchase
Agreement") or the pursuit by any parties thereto of claims under the Stock
Purchase Agreement.
(b) Except with the prior written approval of the Company, or
except as required to conduct the business of the Company in the ordinary
course, the Executive will not, at any time, directly or indirectly, use,
disseminate, disclose, lecture upon, or publish articles concerning, any
Confidential Information.
(c) Upon the termination of his employment with the Company, all
documents, records, notebooks and similar repositories of, or containing,
Confidential Information, including any copies thereof, then in the
Executive's possession, or under his control, whether prepared by him or
others, will be left with or immediately returned to the Company by the
Executive.
13. Non-Compete. The Executive agrees that, during the Term
15
of this Agreement and during any period following the termination of his
employment with the Company pursuant to Paragraph 9, subsections (a), (d)(2)
or (e) of this Agreement in which he is being compensated by the Company in
connection with his termination pursuant to those provisions, and in the case
of his termination pursuant to Paragraph 9 subsections (b) or (c), during the
period of two (2) years following the termination of his employment, and in
any state in which the Company or any of its affiliates does business, he
will not, without the written approval of the Company, directly or
indirectly, under any circumstances whatsoever, own, manage, operate, engage
in, control or participate in the ownership, management, operation or control
of, or be connected in any manner, whether as an individual partner,
stockholder, director, officer, principal, agent, employee or consultant, or
in any other relation or capacity whatsoever, with any Competing
Organization, and will not in any such manner, compete with or call on any
Customer of the Company, wherever located, who was a Customer of the Company
at any time during the one year period prior to the termination of the
Executive's employment with the Company, for the purpose of inducing such
Customer to do business with the Executive or any competing Organization.
Notwithstanding the foregoing, nothing contained in this Paragraph 13 shall
restrict the Executive from making any investment in any company, so long as
such investment consists of no more than five percent (5%) of any class of
equity securities of a company whose
16
securities are traded on a national securities exchange or in the
over-the-counter market.
14. Non-Interference. The Executive will not, for a period of one (1)
year following the termination of the Executive's employment pursuant to
Paragraph 9, subsections (a), (c) or (e), directly or indirectly, employ,
hire, solicit or, in any manner, encourage any employee of the Company to
leave the employ of the Company to engage in business with the Executive or a
Competing Organization.
15. Injunctive Relief. In addition to any other rights or remedies
available to the Company as a result of any breach by the Executive of his
obligations under this Agreement, the Company shall be entitled to
enforcement of such obligations by an injunction or a decree of specific
performance from a court with appropriate jurisdiction, and in the event that
the Company is successful in any suit or proceeding brought or instituted by
the Company to enforce any of the provisions of this Agreement, or on account
of any damages sustained by the Company by reason of the violation by the
Executive of any of the terms of this Agreement to be performed by the
Executive, the Executive agrees to pay to the Company all attorneys' fees
reasonably incurred by the Company.
16. Withholding. The Executive hereby agrees that he will make such
arrangement as the Company may deem necessary to discharge any obligations of
the Company to withhold Federal, state or local taxes imposed upon the
Company in respect of this
17
Agreement.
17. Severability. The provisions of this Agreement shall be severable
and if any part of any provision shall be held invalid or unenforceable, or
any separate covenant contained in any provision is held to be unduly
restrictive and void by a final decision of any court or other tribunal of
competent jurisdiction, such part, covenant or provision shall be construed
or limited in scope to give it maximum lawful validity, and the remaining
provisions of this Agreement shall nonetheless remain in full force and
effect.
18. Entire Agreement. This Agreement contains the entire agreement of
the parties relative to the subject matter hereof, superseding and
terminating all prior agreements or understandings, whether oral or written,
between the parties hereto relative to the subject matter hereof, and this
Agreement may not be extended, amended, modified or supplemented without the
prior written consent of the parties hereto.
19. Waiver. Any waiver of the performance of the terms or provisions
of this Agreement shall be effective only if in writing and signed by the
party against whom such waiver is to be enforced. The failure of either party
to exercise any of his or its rights under this Agreement or to require the
performance of any term or provision of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent a subsequent
exercise or enforcement of such rights or be deemed a waiver of any
subsequent breach of the same or any other term or provision of
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this Agreement.
20. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed given when personally
delivered or sent by overnight courier or certified mail, postage prepaid,
return receipt requested, to the respective addresses of the parties hereto
as set forth above or to such other address as either party may designate by
notice to the other party given as herein provided.
21. Assignment. Except as provided in Paragraph 9(d), this Agreement
shall not be assignable by either party without the prior written consent of
the other party.
22. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New Jersey, without
giving effect to the conflict of laws rules of such state.
23. Survival of Terms. The terms of this Agreement and the respective
obligations of the parties hereto shall survive the termination of the
Executive's employment with the Company for as long as any obligation or duty
remains outstanding.
24. Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, Bergen County, New Jersey, and judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction over the
parties. The dispute will be resolved by a panel of three arbitrators if the
dollar amount that is being arbitrated exceeds $100,000.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY
By:
---------------------------
Xxxxx X. Xxxxxx, Chairman
EXECUTIVE
By:
---------------------------
Xxxxxx X. Xxxxx
SCHEDULE A
BONUS FORMULA
Any Bonus to which the Executive may be entitled shall be calculated on
an annual basis as follows:
"Bonus Pool" shall mean to the extent that the Company's Earnings Before
Interest, Taxes, Depreciation and Amortization ("EBITDA") on Average Assets
in any fiscal year exceed 15.2% in
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such fiscal year, the amount by which EBITDA exceeds 15.2% shall be
maintained as a bonus pool of which the Executive shall be entitled to ten
(10%) percent.
"Average Assets" shall mean the stated value of all of the Company's
assets on its Audited Balance Sheet of the Company and its Subsidiaries, if
any, as at the end of any fiscal year divided by the beginning year assets,
as adjusted for the unamortized portion of the Purchase Price Premium.
"Purchase Price Premium" shall mean $33,000,000 minus the stated value of
all assets on the Adjusted Balance Sheet of the Company as of the Closing
Date. The Purchase Price Premium shall be amortized on a straight line basis
over a twenty (20) year period for purposes of the Bonus Formula.
"Adjusted Balance Sheet" shall mean the balance sheet of the Company as
finally agreed upon by the parties thereto in accordance with the Stock
Purchase Agreement.
The Purchase Price Premium shall be reduced by the excess of replacement
cost over the greater of net book value or sale value for any and all assets
on the Adjusted Balance Sheet which are the subject of a transaction with
Compost America Holding Company, Inc. or any of its Affiliates after the
Closing Date.
Adjustments will be made to EBITDA to give effect to market rates of
return on assets for all Affiliate transactions by and between the Company
and Compost America Holding Company, Inc. or any of its Affiliates.
The following is an example of the calculation of the Purchase Price
Premium:
Contract Purchase Price $33,000,000
Assets on Closing Balance Sheet:
Cash $ 750,000
Accounts Receivable 2,000,000
Prepaid Expenses 500,000
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Fixed Assets, Net 4,000,000
---------
Total Assets on Closing Balance Sheet 7,250,000
----------
Purchase Price Premium $25,750,000
----------
----------
Average Assets:
June 30,1997 April 30, 1998
------------ --------------
Total Assets on Balance Sheet $ 7,250,000 $10,000,000
Purchase Price Adjustment 25,750,000 24,677,083
----------- -----------
Total Adjusted Assets $33,000,000 $34,677,083
----------- -----------
----------- -----------
Beginning Adjusted Assets $33,000,000
Final Adjusted Assets 34,677,083
-----------
Subtotal 67,677,083
-----------
2
Average Assets $33,838,542
-----------
-----------
Bonus Pool:
EBITDA For Period July 1, 1997- April 30, 1998 $6,000,000
($5,000,000 for 10 months 12/10)
Base EBITDA Calculation
Average Assets For Period $33,838,542
Base Rate of EBITDA 15.2%
Base EBITDA 5,143,458
---------
Bonus Pool $ 856,542
---------
---------
Bonus Calculation:
Bonus Pool $856,542
--------
--------
Bonus Calculation:
X. Xxxxx (10%) $ 85,654
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Document No. 44136.1/NYL3A
Form No. CF0411
Revised: 11/3/97
S&S Corporate Finance
STANDARD FORM
Questionnaire for Directors,
Officers, Significant Employees
and Principal Stockholders
Initial Public Offering of
Common Stock (Form S-1)
--------------------
Instructions to person drafting Questionnaire: All brackets and footnotes and
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ii
Explanatory Note
Citations to the corresponding Item of Regulation S-K and/or rule under
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For commentary providing background information not self-evident from this
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Following this Questionnaire is a Questionnaire Supplement relating to
executive compensation. The SEC adopted amendments to the executive
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1993, which limit the disclosure of executive compensation to "Named
Executive Officers," defined as:
(i) all individuals serving as the Company's Chief Executive Officer
("CEO") or acting in a similar capacity during the last completed
fiscal year, regardless of compensation level;
(ii) the Company's four most highly compensated executive officers other
than the CEO who were serving as executive officers at the end of
the last completed fiscal year; limited, however, to those
executives with salary and bonus of over $100,000 for the last
completed fiscal year; and
(iii) up to two additional individuals for whom disclosure would have
been provided pursuant to paragraph (ii) above but for the fact
that the individual was not serving as an executive officer of the
registrant at the end of the last completed fiscal year.
Generally, someone at the Company will be able to identify the five Named
Executive Officers in accordance with the Instructions to Item 402(a)(2) of
Regulation S-K. It may be necessary to send the Questionnaire Supplement to
more than five executive officers if the identity of the Named Executive
Officers has not been determined.
If the Company has employees who are not executive officers but make
significant contributions to the business (see Item 401(c) of Regulation
S-K), include "significant employees" in the list in the first sentence of
the Questionnaire and add them to the title of the Questionnaire. Also, add a
sentence to the effect that significant employees should answer questions 1,
3, 6, 9-11, 20-22 and 24. If there are people who have been chosen as
executive officers or nominated as directors, include "nominees" or
"appointees" also in the list and throughout the Questionnaire as appropriate
and delete the brackets around question 1(e).
