Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of this 3rd day of January,
1994, by and between XXXXXX X. XXXXXXX (hereinafter referred to as "Employee"),
and TRACK 'N TRAIL, a California corporation (hereinafter referred to as
"Track 'N Trail").
IN CONSIDERATION of the mutual promises set forth below, Employee and
Track 'N Trail hereby agree as follows:
1. EMPLOYMENT. Track 'N Trail hereby agrees to employ Employee, and
Employee agrees to provide services to Track 'N Trail in the position of V.P.
Finance/CEO on an "at-will" basis, subject to the terms and conditions
hereinafter set forth.
2. DUTIES. Subject to the control of Track 'N Trail's Board of Directors
and/or Track 'N Trail management personnel with authority over Employee,
Employee shall perform the duties and responsibilities set forth in Attachment A
and such other duties and responsibilities assigned from time-to-time which are
commensurate with Employee's role as Track 'N Trail's V.P. Finance/CEO.
Throughout the term of this Agreement, Employee shall devote all of his or her
energies, interest, abilities and productive time to the performance of his or
her duties and responsibilities under this Agreement, and shall not, without
Track 'N Trail's prior written consent, render services to any other person or
entity or otherwise engage in any other activity that would materially interfere
with the performance of such duties and responsibilities under this Agreement.
3. TERM. The term of this Agreement shall be two (2) year(s) from the
effective date of this Agreement and shall extend and renew for a one-year
period each anniversary date thereafter, unless terminated as set forth herein.
Employee or Track 'N Trail may terminate Employee's employment and this
Agreement with or without "cause" (including by reason of Employee's disability
for more than four months or death) upon thirty (30) days' written notice to the
other party. Additionally, Track 'N Trail may terminate this Agreement and
Employee's employment for "cause" immediately without notice. "Cause" shall be
defined as follows:
(a) Employee being convicted of, pleading guilty or NOLO CONTENDERE to, or
confessing to any act of fraud, misappropriation or embezzlement, or to any
felony;
(b) Employee engaging in dishonest acts to the detriment of Track 'N
Trail;
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(c) Employee otherwise failing to comply with the terms of this Agreement
and/or engaging in misconduct in violation of Track 'N Trail policies.
4. PAY ON TERMINATION. Should Track 'N Trail terminate this Agreement
and Employee's employment without cause as defined above and/or materially
breach any portion of this Agreement, Track 'N Trail shall tender to Employee an
amount equal to one (1 ) year of pay, to be calculated at the highest rate of
pay Employee has received from Track 'N Trail in the two-year period prior to
Employee's termination. Payments of said sum shall be made on Employee's last
day of employment, or on terms mutually agreeable to Employee and Track 'N
Trail.
5. WORKING CONDITIONS. Track 'N Trail agrees that during the term of
this Agreement Track 'N Trail:
(a) Shall provide, establish and maintain reasonable working conditions
for Employee and abide by all state, federal and local employment regulations
and law;
(b) Shall not, without the written consent of Employee, materially alter
or reduce the duties and responsibilities assigned to Employee as set forth in
Attachment A to this Agreement; or
(c) Shall not, without written consent of Employee, require Employee to
relocate to any office in excess of thirty (30) miles from El Dorado Hills,
California.
Notwithstanding anything to the contrary in this paragraph 5 or this
Agreement overall, Track 'N Trail's failure to meet any of its obligations under
this paragraph 5 shall constitute a termination of Employee without cause
entitling Employee to the sole remedy of electing to continue his or her
employment notwithstanding such failure or to leave Track 'N Trail's employ and
receive compensation from Track 'N Trail pursuant to the provisions of paragraph
4.
6. COMPENSATION. Employee agrees to accept and Track 'N Trail agrees to
pay for Employee's services at the rate of $75,000.00 per year. Employee shall
be eligible to receive bonuses on the same terms and conditions as other
similarly situated employees. Track 'N Trail reserves the right to increase
Employee's compensation rate prospectively at any time.
7. CONFIDENTIAL INFORMATION. Employee will, in the course of Employee's
duties on behalf of Track 'N Trail, be advised of certain business matters and
affairs of Track 'N Trail regarding its clients and the management of its
business. The duties performed by Employee for Track 'N Trail place Employee in
a position of trust and confidence with respect to certain trade secrets and
other proprietary information relating to the business of Track 'N Trail and not
generally known to the
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public. These trade secrets include, but are not limited to, Track 'N Trail's
price lists, advertising and promotional ideas and strategies, customer lists
and formulas, patterns, devices, processes, compilations of information, records
and specifications which are owned by Track 'N Trail and which are regularly
used in the operation of Track 'N Trail (hereinafter "confidential
information"). Employee will not, either during the term of Employee's
employment or any time in the future, directly or indirectly:
(a) Disclose or furnish, directly or indirectly, to any other person,
firm, agency, corporation, client, business or enterprise, any confidential
information acquired by Employee during the term of this Agreement;
(b) Individually or in conjunction with any other person, firm, agency,
company, client, business or corporation, employ or cause to be employed any
confidential information in any manner whatsoever, except in furtherance of the
business of Track 'N Trail;
(c) Without the written consent of Track 'N Trail, publish, deliver or
commit to being published or delivered, any copies, abstracts or summaries of
any files, records, documents, drawings, specifications, lists, equipment and
similar items relating to the business of Track 'N Trail, whether prepared by
the Employee or otherwise coming into the Employee's possession, except to the
extent required in the ordinary course of Track 'N Trail's business;
(d) Attempt to encourage, induce or otherwise solicit, directly or
indirectly, any other employee of Track 'N Trail to breach an employment
agreement with Track 'N Trail or to otherwise interfere with the advantageous
business relationship of Track 'N Trail with its employees.
All files, records, documents, drawings, specifications, lists, equipment
and similar items relating to the business of Track 'N Trail, whether prepared
by Employee or otherwise coming into the Employee's possession, shall remain the
exclusive property of Track 'N Trail and shall not be removed from the premises
of Track 'N Trail under any circumstances whatsoever without the prior written
consent of an officer of Track 'N Trail.
Upon termination of Employee's employment, Employee agrees to immediately
return to Track 'N Trail all property of Track 'N Trail in as good condition as
when received by Employee (normal wear and tear excepted) including, but not
limited to, all files, records, documents, drawings, specifications, lists,
equipment and supplies, promotional materials and similar items relating to the
business of Track 'N Trail.
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8. REPAYMENTS. Employee hereby expressly agrees to repay to Track 'N
Trail any and all sums owed by Employee to Track 'N Trail immediately upon
termination of Employee's employment.
/s/ DJN
__________
Employee
Initials
9. ARBITRATION. In the event Employee's employment and this Agreement
are terminated, and Employee believes the termination was wrongful and/or
violated any of Employee's rights, Employee and Track 'N Trail agree to submit
any dispute arising out of the termination of Employee's employment, including,
but not limited to, claims of termination allegedly resulting from
discrimination on the basis of race, sex, age, national origin, ancestry, color,
religion, marital status, status as a veteran of the Vietnam era, physical or
mental disability, medical condition or any other basis prohibited by law,
exclusively to final and binding arbitration before a neutral arbitrator.
If Employee and Track 'N Trail are unable to agree upon a neutral
arbitrator, Track 'N Trail will obtain a list of arbitrators from a state or
federal arbitration service. Employee (first) and then Track 'N Trail will
alternately strike names from the list until one name remains; the remaining
person shall be the arbitrator. The arbitrator shall be bound by the
qualifications and disclosure provisions and the procedures set forth in the
1989 Model Employment Arbitration Procedures of the American Arbitration
Association and shall order such discovery as is appropriate to the nature of
the claim and necessary to the adjudication thereof.
Arbitration proceedings shall be held in the city or town where Employee's
employment services were performed, at Track 'N Trail headquarters or at any
other location mutually agreed upon by Employee and Track 'N Trail. The
arbitrator shall determine the prevailing party in the arbitration and the costs
of the arbitration shall be paid by the nonprevailing party.
Employee and Track 'N Trail agree that this arbitration shall be the
exclusive means of resolving any dispute arising out of Employee's termination
and that no other action will be brought by Employee in any court or other
forum. ONLY THE ARBITRATOR, NOT A JUDGE OR JURY, WILL DECIDE THE DISPUTE.
If Employee decides to dispute Employee's termination, Employee agrees to
deliver a written request for arbitration to Track 'N Trail within one year of
the date of Employee's termination and to respond within 14 calendar days to
each communication regarding the selection of an arbitrator and the scheduling
of a hearing and other matters related to arbitration proceedings. If Track 'N
Trail does not receive a written
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request for arbitration from Employee within one year from the date of
Employee's termination or if Employee does not respond to any communication from
Track 'N Trail about the arbitration proceedings within 14 calendar days,
Employee agrees Employee will have waived any right to raise any claims arising
out of the termination of Employee's employment with Track 'N Trail in
arbitration or in any court or other forum. The limitations set forth in this
paragraph shall not be subject to tolling, equitable or otherwise.
The arbitrator shall be permitted to award only those remedies in law or
equity which are requested by the parties and supported by credible, relevant
evidence. The provisions of this arbitration provision shall survive the
termination of this Agreement and Employee's employment, and shall remain in
full force and effect thereafter.
Employee and Track 'N Trail agree that if any court of competent
jurisdiction declares that any part of this arbitration provision is illegal,
invalid or unenforceable, such a declaration will not affect the legality,
validity or enforceability of the remaining parts of the arbitration provision
and the illegal, invalid or unenforceable part will no longer be part of this
arbitration provision.
/s/ DJN
__________
Employee
Initials
10. POLICIES. Employee shall be bound by all the policies, rules and
regulations of Track 'N Trail now in force, and by all such other policies,
rules and regulations as may be hereafter implemented and called to his/her
notice, and will faithfully observe and abide by the same.
11. OTHER TERMS AND CONDITIONS OF EMPLOYMENT. See Attachment B-Bonus
Program. (If none, Employee initial here. ____).
12. INDEMNIFICATION. Track 'N Trail agrees that Track 'N Trail shall
indemnify and hold Employee harmless for any and all losses, costs, damages,
expenses, including attorneys' fees, incurred by Employee as a direct
consequence of the discharge of his/her duties as such and/or by reason of the
fact that Employee is or was an agent of Track 'N Trail. Track 'N Trail further
agrees to indemnify and hold Employee harmless for any and all losses, costs,
damages, expenses, including attorneys' fees, incurred by Employee arising out
of Track 'N Trail's breach of this Agreement or any part thereof, regardless of
the judgment or decisions arising therefrom.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and upon their heirs, administrators, representatives, executors,
successors and assigns and
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shall inure to the benefit of said parties and each of them and their heirs,
administrators, representatives, executors, successors and assigns provided,
however, that in no event may Employee assign his or her rights or delegate his
or her duties under this Agreement to any other party without the prior written
consent of Track 'N Trail.
14. SEVERABILITY. Track 'N Trail and Employee agree that should any
provision of this Agreement be declared or be determined by any court of
competent jurisdiction to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining parts, terms and provisions shall
not be affected thereby, and said illegal, unenforceable or invalid part, term
or provision will be deemed not to be part of this Agreement.
15. ENTIRE UNDERSTANDING. This Agreement contains all the understandings
and agreements between the parties concerning Employee's employment and Employee
acknowledges that no person who is either an agent or employee of Track 'N Trail
may orally or by conduct modify, delete, vary or contradict, the terms and
conditions set forth herein. This Agreement replaces any and all prior
agreements between Employee and Track 'N Trail related to Employee's employment
and any and all such prior Agreements are hereby canceled.
IN WITNESS WHEREOF, the parties have executed this Agreement at El Dorado
Hills, California to be effective as of the date first written above.
EMPLOYEE:
/s/ XXXXXX X. XXXXXXX
----------------------------------------
TRACK 'N TRAIL, a California corporation
By /s/ XXXX XXXXXXXXX, XX.
-------------------------------------
Name: XXXX XXXXXXXXX, XX.
Title: President
Copy Delivered to Employee on
1/3/94
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JOB DESCRIPTION - VICE PRESIDENT FINANCE, CFO
1.0 INTRODUCTION:
The purpose of this procedure is to establish and define the
position of Vice President Finance, Chief Financial Officer at
Track 'n Trail and to describe the authority, responsibilities, and
duties of the position.
2.0 AUTHORITY:
2.1 The CFO is appointed at will by Track 'n Trail and receives his/her
authority from and reports directly to the Executive Vice
President/C.O.O.
2.2 The following positions report directly to the CFO.
2.21 Assistant Controller
2.22 MIS Manager
2.23 Human Resources Manager
2.3 The CFO has the authority to accomplish the following:
2.31 Manage the various functions of Finance, Accounting, MIS, and
Human Resources.
2.32 Incur and manage the expenses for the efficient and effective
operation of Finance, Accounting, MIS, and Human Resources
department.
2.33 Assure adequate controls exist over the authorization and
payment for all invoices.
2.34 Oversee the Shortage Control Effort within Track 'n Trail to
assure an acceptable performance.
2.35 Review and approve all policies and operating procedures to
assure that they have adequate controls, are easy to
understand, and perform their intended purpose.
2.36 Responsibility for the preparation of the annual financial
operating plan.
2.37 Joint responsibility with the Senior Management of Track 'n
Trail for the preparation and implementation of the Long
Range Strategic Plan.
2.38 Jointly responsible with the C.O.O. for the negation of
contracts and liabilities with outside agencies.
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2.39 Responsibilities and accountability to review all expense
areas of the business to develop proposals for profit
improvements by working with the head of each functional
area.
2.40 Determine the long range MIS system needs for Stores,
Merchandising, Warehouse, Finance and Human Resources and
then take the necessary steps to implement these changes.
2.41 Act as primary interface with the banks and outside auditors.
Also interface with other potential investors in the
business.
2.24 Jointly responsible for C.O.O. on legal matters related to
both general business and personnel matters.
2.43 Hire, train, commend, promote, discipline, and terminate
those personnel reporting directly to him/her.
2.44 To change the rate of compensation for personnel reporting
directly to the Chief Financial Officer. Any change in
compensation is contingent upon sales and income levels being
at or ahead of plan. Also critical in their evaluation is
their individual performance in their specific function in
regard to their job responsibilities and performance on any
special projects.
3.0 RESPONSIBILITIES:
The Vice President of Finance, CFO is primarily responsible for the
effective management of Track 'n Trail's financial affairs. Specific
responsibilities include the following:
3.1 Administer all functions within the Finance, Accounting, MIS and
Human Resources departments to ensure legal, financial, and support
objectives are met.
3.2 Administer the timely and accurate production of financial
statements.
3.3 Adequate controls over Inventory Shortage.
3.4 Performance to overall company expense plan.
3.5 Development of annual financial operating plan.
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3.6 Developing, revising, and maintaining the forms necessary to provide
Track 'N Trail with essential management information.
4.0 DUTIES:
The Vice President of Finance's principal duties include the following:
4.1 Oversee the development and management of budgets, financial
statements, and other financial reports needed to provide management
with the information required to run the business.
4.2 Work with the Senior Management Committee to develop overall
guidelines and parameters for the annual operating plan.
4.3 Manage the preparation of monthly and annual financial statements,
budget variance and other operating reports.
4.4 Work with Department Heads that he/she directly supervises, and
executive management to prepare, manage, and achieve expense
budgets.
4.5 Supervise Finance, Accounting, MIS and Human Resources departments.
4.6 Keep informed on any changes to governmental regulations,
requirements and laws that effect Track 'n Trail, and make sure that
all financial reports meet GAAP and legal requirements.
4.7 Review payment terms for expense and merchandise to assure maximum
benefit to Track 'n Trail. Also work with the V.P. of Marketing to
improve terms whenever possible.
4.8 Manage the check and credit authorization process to maximize
customer service and minimize operating costs.
4.9 Negotiate and interface with banks in relationship to loans, cash
management and checking accounts.
4.10 Assure the adequate maintenance of insurance coverage for
properties, equipment, liability, and employee benefits.
4.11 Interview, hire, train, commend, promote, counsel, and terminate
immediate subordinates within Company policy and budget guidelines.
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4.12 Oversee the preparation and update of all personnel within the CFO
areas of responsibility including preparation of procedures and
training manuals.
4.13 Review all contracts and make appropriate recommendations to the
Senior Management Committee.
4.14 Complete performance evaluations for all personnel who report
directly to the CFO in a timely and accurate manner.
4.15 Work with the Executive Management Committee on the development and
update of the Five Year Strategic Plan each year.
4.16 Serve as Chairman of the Inventory Shortage Prevention Committee.
4.17 Perform periodic store visits with District Managers, Auditors, and
Security personnel.
4.18 Responsible for the management of the year-end audit.
4.19 Continuously review automated systems and how well they meet the
changing needs of the business. Develop and implement the changes
necessary to meet business needs.
4.20 Attend and actively participate in all required company meetings.
4.21 Coordinate the update of all procedure and training policies and
procedures that pertain to areas he/she is responsible.
4.22 Coordinate the Employee of the Month/Year program and any other
corporate awards programs.
4.23 Coordinate the functions of the mail room, including report
distribution and other correspondence distribution.
4.24 Supervise the maintenance of employee personnel files, assuring that
all required documents are obtained, correctly completed, and filed
in accordance with government and company requirements.
4.25 Maintain the safety and confidentiality of company records and
restrict employee access to company records to a need-to-know basis.
4.26 Perform any other duties as required and necessary.
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4.27 All positive/negative trends in Track 'n Trail's financial condition
will be identified and reported to the President and Executive Vice
President/C.O.O. in a timely manner.
4.28 Evaluate the total organization to determine needs to meet growth
plans. Develop strategies to meet those needs organizationally,
financially, systems, accounting, loss prevention, security,
communications, investors, banking, training, and Human Resource
operations.
4.29 Evaluate detail gross margin performance to determine points where
enhancement is possible. Develop or enhance reporting systems to
make gross margin tracking and inventory control more effective.
4.30 Working with the Senior Management Committee, explore the
alternative available for financing the growth in stores and volume
over the next five years.
4.31 Work with Vice President of Marketing to develop marketing concepts
using company and other name files.
4.32 Interface with contracted Security Consultant to assure adequate
protection of assets.
4.33 Keep President and Executive Vice President/C.O.O. promptly updated
on progress in key assignments and special projects.
5.0 MEASURES OF PERFORMANCE:
The Vice President of Finance/CFO's performance will be evaluated based
upon the following criteria:
5.1 The Total Company Expenses are maintained within 4% of approved
budget.
5.2 The Total Company Inventory shortage is not greater than .60% of
total sales.
5.3 Total Company Operating profit is over 5% of sales pretax.
5.4 The expense performance for the year in Finance, Accounting, MIS and
Human Resources are within 4% of budget (adjusted for sales
variances).
5.5 Tax returns are prepared and payments made timely and accurately.
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5.6 All job description responsibilities and duties are performed in a
satisfactory manner and on a timely basis.
5.7 The plans and policies of Track 'N Trail were consistently executed
within the Finance Department in a satisfactory manner conforming to
established standards.
5.8 Proper performance evaluations have been accomplished for personnel
reporting directly to the Vice President Finance/CFO.
5.9 Leadership was applied in a fair, effective and consistent manner
resulting in positive morale throughout the department.
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DATE: JANUARY 3, 1994
TO: XXXXXX X. XXXXXXX
FROM: XXXX XXXXXXXXX XX.
SUBJECT: 1994 EXECUTIVE BONUS PROGRAM
PERSONAL AND CONFIDENTIAL
I AM PLEASED TO ANNOUNCE THE 1994 BONUS PLAN FOR YOU, FOR THE PERIOD ENDING
12/31/94. THE DETAILS AND AN EXAMPLE OF THE PLAN ARE ON THE ENCLOSED
ATTACHMENT. YOUR BONUS EARNINGS WILL BE BASED UPON FIVE AREAS OF RESPONSIBILITY
AS FOLLOWS:
PROFITABILITY - 5% EARNINGS ON PRE-TAX INCOME ABOVE THE BENCHMARK EARNINGS
OF $2,499,000.
STORE WAGE CONTROL - $50 FOR EACH .01% SAVINGS BELOW THE 10.79% PLAN.
COMP STORE SALES GAIN - $50 FOR EACH .1% ABOVE THE 3.0% PLAN.
INVENTORY CONTROL - $50 FOR EACH .01% UNDER THE .60% PLAN SHRINK
MODIFIED MAINTAINED MARGIN - $50 FOR EACH .01% OVER THE 48.06% PLAN.
IT IS UNDERSTOOD THAT IF CERTAIN MINIMUM PERFORMANCE IS NOT ATTAINED AS DEFINED
ON THE ATTACHMENT, THAT THE EMPLOYEE WILL NOT PARTICIPATE IN THE BONUS PROGRAM
FOR 1994.
THE PRE-TAX PROFITS WILL NOT BE PENALIZED (REDUCED) FOR ITEMS WHICH ARE NOT
NORMAL OPERATING ITEMS, INCLUDING:
- LEGAL BILLS INCURRED IN DEFENDING THE COMPANY FROM SHAREHOLDERS
- LEGAL/ACCOUNTING/APPRAISAL/INVESTMENT BANKING OR ANY OTHER BILLS
RELATED TO THE SALE OR POTENTIAL SALE OF THE COMPANY
- ANY PAYMENTS/FEES PAID TO OR ON BEHALF OF XXXX XXXXXXXXX XX/XXXXXXX
XXXXXXXXX
- ANY DISTRIBUTIONS TO THE SHAREHOLDERS.
- ANY COURT ORDERED EXPENSE DUE TO THE SHAREHOLDERS INCLUDING PAYMENT
FOR BOARD MEMBERS, OR NEUTRAL "EMPLOYEES."
- ANY MANAGEMENT FEE SALARY OR SIMILAR EXPENSE FROM NEW OWNERS
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- ANY EXPENSE PAID TO THE TERMINATE A LEASE ON A NON-PRODUCTIVE STORE,
NET OF ANY SAVINGS IN THE CURRENT YEAR FROM EARLY TERMINATION
- EXPENSES INCURRED DUE TO STOCK APPRECIATION RIGHTS.
- ANY OTHER EXPENSES NOT IN THE NORMAL COURSE OF BUSINESS.
IT IS UNDERSTOOD THAT THIS BONUS AGREEMENT SHALL BE BINDING UPON ANY SUCCESSORS,
SHOULD THE COMPANY BE SOLD IN PART OR IN WHOLE.
THE BONUS PAYOUT FOR CALENDAR 0000 XXXX XXXXX XX XX BEFORE 3/15/95, FOR EACH
PARTICIPANT THAT WAS EMPLOYED AS OF 12/31/94.
THIS BONUS PLAN IS EFFECTIVE FOR THE CALENDAR YEAR 1994 ONLY, AND THE COMPANY
RESERVES THE RIGHT TO ELIMINATE OR CHANGE THE BONUS PROGRAM FOR FUTURE PERIODS.
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MANAGEMENT BONUS PROGRAMS
1994
COO/CFO
COO-RATE OF 6% OVER BENCHMARK
CFO-RATE OF 5% OVER BENCHMARK
BENCHMARK:
1994 PLAN $2,305,000
S/H PLANNED EXP $ 144,000
S/H PLANNED LEGAL $ 50,000
----------
BENCHMARK EARNINGS $2,499,000
----------
----------
BONUS EARNED ON PRE-TAX INCOME OVER THE $2,499,000 BENCHMARK STORE WAGES
-$50 FOR EACH .01% BELOW THE 10.79% PLAN
COMP STORE SALES
-$50 FOR EACH .1% OVER 3%
INVENTORY CONTROL
-$50 FOR EACH .01% UNDER .60% RETAIL SHRINK
MODIFIED MAINTAINED MARGIN
-$50 FOR EACH .01% OVER PLAN
EMPLOYEE WILL NOT PARTICIPATE IN THE BONUS PROGRAM SHOULD PRE-TAX EARNINGS FALL
BELOW THE $2,499,000 BENCHMARK EARNINGS.
PRE-TAX PROFITS NOT REDUCED FOR
- LEGAL BILLS INCURRED IN DEFENDING THE COMPANY FROM SHAREHOLDERS
- LEGAL/ACCOUNTING/APPRAISAL/INVESTMENT BANKING OR ANY OTHER BILLS
RELATED TO THE SALE OR POTENTIAL SALE OF THE COMPANY
- ANY PAYMENTS/FEES PAID TO OR ON BEHALF OF XXXX XXXXXXXXX XX/XXXXXXX
XXXXXXXXX.
- ANY DISTRIBUTIONS TO THE SHAREHOLDERS.
- ANY COURT ORDERED EXPENSE DUE TO THE SHAREHOLDERS INCLUDING PAYMENT
FOR BOARD MEMBERS, OR NEUTRAL "EMPLOYEES".
- ANY MANAGEMENT FEE OR SIMILAR EXPENSE FROM NEW OWNERS
- ANY EXPENSE PAID TO TERMINATE A LEASE ON A NON-PRODUCTIVE STORE, NET
OF ANY SAVINGS IN THE CURRENT YEAR FROM EARLY TERMINATION.
- EXPENSES INCURRED DUE TO STOCK APPRECIATION RIGHTS.
- ANY OTHER EXPENSES NOT IN THE NORMAL COURSE OF BUSINESS
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EXAMPLE:
PRE-TAX EARNINGS 3,000,000
BENCHMARK EARNINGS 2,499,000
---------
INCREMENTAL EARNINGS 501,000
---------
COO CFO
--- ---
1) COO % @ 6%/CFO @ 5% 30,060 25,050
2) STORE WAGES @ .10% IMPROVEMENT 500 500
3) COMP STORE SALES @ 3.0% IMPROVEMENT 1,500 1,500
4) INVENTORY CONTROL @ .15% IMPROVEMENT 2,500 2,500
5) MOD. MAINTAINED MARGIN (50 BASIS POINTS) 2,500 2,500
------ -------
37,060 32,050
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