EXECUTION COPY
EMPLOYMENT AGREEMENT
This AGREEMENT is made this 15th day of November, 1996 (this "Agreement"), by
and between ALLIANCE National Incorporated, a Nevada corporation (the "Company")
and Xxxxx X. Xxxxx (the "Employee").
WITNESSETH:
WHEREAS, the Employee has agreed to be employed by the Company as its President
and Chief Executive Officer; and
WHEREAS, the Employee will serve on the Company's Board of Directors; and
WHEREAS, it is in the Company's best interest to obtain the services of
Employee; and
WHEREAS, the Company and the Employee have previously engaged in negotiations
regarding the terms and conditions of their future employment relationship by
way of this Agreement; and
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:
1. Employment. The Company hereby authorizes and agrees to employ the
Employee and confirms said authority by the Senior Vice President and
Chief Financial Officer executing this Agreement on behalf of the Company,
and the Employee hereby accepts said employment upon the terms and
conditions hereinafter set forth.
2. Positions and Titles. The Employee shall have the title of President and
Chief Executive Officer. The Employee shall perform such duties as
normally associated with the position of President and Chief Executive
Officer of the Company and shall further have the usual authority
associated with said position and office. In addition, it is further
agreed that:
a. The Employee shall have no less authority, position and title
granted the Employee pursuant to this Paragraph;
b. The Employee shall perform such other duties as the Board from time
to time may determine is appropriate and agreeable to the Employee.
The Employee shall be responsible to the Board of Directors of the
Company.
3. Term of Employment. The Company hereby employs the Employee to perform the
duties described herein, and the Employee hereby accepts employment with
the Company, for a term beginning on the date hereof and continuing for a
period of approximately five and one-half years ending on June 30, 2002
(the "Employment Term"), at which time this Agreement shall terminate
unless otherwise agreed to by the parties in writing. The Employee agrees
to remain in the employ of the Company during
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the period of time this Agreement is in effect unless terminated pursuant
to either Paragraph 7, 8 or 10 herein.
In the event employment is terminated pursuant to this Paragraph 3, which
shall not be deemed a "Termination" under Paragraph 7 of this Agreement,
then the Employee shall continue to receive compensation for the remainder
of the Employment Term; provided, however, that the Employee continues to
perform his duties and otherwise fully complies with the terms of this
Agreement.
4. Performance of Duties. During the period of the Employee's employment, he
shall perform faithfully the duties required of him. The foregoing,
however, shall not be construed as preventing the Employee from investing
his assets in such manner as will not require any significant Services on
the part of the Employee in the operation of the affairs of the entitles
in which such investments are made nor will the foregoing prevent the
Employee from serving on the Board of Directors of other corporations,
providing such does not interfere with the performance of his duties for
the Company, create any actual or potential conflict of interest with
respect to the Employee's loyalties, obligations or duties to the Company,
violate any of the provisions of this Agreement, or involve a competitor
of the Company or its subsidiaries.
5. Compensation.
a. Salary. The Company shall pay to the Employee as compensation for
his services hereunder an annual salary of Two Hundred Fifty
Thousand Dollars ($250,000.00), payable pursuant to the Company's
salary payment practices. Employee's salary shall be increased for
each fiscal year beginning after June 30, 1997, in an amount equal
to the actual increase in the Consumer Price Index for New York
City.
b. Performance Bonus. In addition to the salary set forth in Paragraph
5(a) of this Agreement, the Employee shall be eligible to receive a
performance bonus ("Bonus") determinable as set forth on Appendix I
attached hereto and based on the Company, under the leadership of
the Employee, achieving the performance levels set forth in Appendix
I. Any Bonus to which the Employee is entitled with respect to any
fiscal year shall be paid within thirty (30) days after the issuance
by the Company of its audited financial statements for such fiscal
year.
c. Incentive Plan. The Company shall create a long-term incentive plan
fore the Employee ("Incentive Plan"). The employee shall be eligible
for vesting under this Incentive Plan ("Vesting Test"), if the
Company, under the leadership of the Employee, achieves an average
of 100% or more of its EPS Target for three consecutive fiscal years
(a "Three-Year Cycle"). Subject to the Vesting Test set forth in
this Paragraph 5(c), the Employee shall be eligible for the
following deferred compensation under the Incentive Plan.
(i) For each fiscal year of a Three-Year Cycle, beginning with
fiscal year 1997, an amount ("Annual Set Aside Amount") equal
to 50% of the
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Employee's Salary, as set forth in Paragraph 5(a) hereof,
shall be deferred for the Employee's benefit under the
Company's Incentive Plan which Annual Set Aside Amount shall
accrue interest at Prime plus 1% per annum. Such Annual Set
Aside Amount shall be set aside and deferred even if the
Company achieves less than 100% of its EPS Target in any
single fiscal year; subject, however to the Vesting Test.
(ii) If the Vesting Test is met for a Three Year Cycle, the
deferred Annual Set Aside Amounts with the interest accrued
thereon shall be payable on a rolling three year basis.
(iii) If the Vesting Test is not met for a Three Year Cycle, all
Annual Set Aside Amounts shall not vest and the Employee shall
not be entitled to any payment under this Incentive Plan for
such Three Year Cycle.
d. Options.
The Company shall grant the Employee options under the Company's
1996 Option Plan to purchase not less than 600,000 shares of the
Company's common stock.
6. Additional Benefits. In addition to the salary specified in Paragraph 5(a)
above, Company shall provide Employee comparable additional benefits as
are provided to any Executive of the Company; provided, however, the said
additional benefits shall not be less favorable to Employee than as more
particularly described in Subparagraphs (a) through (e) of this Paragraph
6. The term "comparable" as used in this Paragraph 6 shall mean by using
the same factors, formulate and considerations, as any being utilized in
determining the benefits granted to the aforesaid officers.
a. Vacations, Holidays and Sick Leave. The Employee shall be entitled
to vacations, holidays and sick leave to the same extent as other
executives of Company; provided, however, Employee shall receive,
minimally, three (3) weeks paid vacation annually.
b. Business Expenses. The Company will reimburse the Employee in full
for all expenses incurred by the Employee in the pursuit of the
Company's business during the period of this Agreement. The Employee
shall be required to submit the usual and customary expense reports
and vouchers in support of the expenses incurred on behalf of the
Company as required by general practices and procedures of the
Company.
c. Hospital, Medical and Dental Reimbursement Plan. The Company shall
provide the Employee major medical and dental benefits for the
Employee and his immediate family. Such hospital, medical and dental
benefits shall be no less favorable to Employee than those benefits
enjoyed by the other Executives of Company.
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d. Insurance.
(1) During the term of this Agreement, the Company shall obtain
and pay the premium on a term life insurance policy on the
Employee in the highest face amount allowed by law. The
Employee shall be entitled to designate the beneficiary under
such policy of insurance. The Company agrees that it shall:
(a) Pay the premium on such policy and otherwise maintain it
in full force and effect.
(b) Not borrow on the policy or otherwise encumber it.
(c) Regularly exhibit to the Employee, if requested, receipt
for premium payments as well as to furnish the Employee
with proof that the policy is in full force.
(2) The Company will provide the Employee with long-term
disability insurance with a value consistent with the
Employee's annual compensation and Bonus hereunder
("Disability Plan").
e. The Company shall provide to the Employee during the term of this
Agreement a motor vehicle for business use and shall pay for all
costs, expenses (including insurance, maintenance and like charges)
up to $1,300.00 per month in connection with such use.
7. Termination. This Agreement may be terminated pursuant to the following:
a. Termination by Employee. The Employee may terminate this Agreement
upon fourteen (14) days advance written notice to the Company if the
Company is fifteen (15) days or more delinquent in payments under
Paragraph 5 herein.
b. Termination by Company. The Company may terminate this Agreement
upon fourteen (14) days advance written notice to the Employee;
provided, however, that the Company's decision to terminate the
Employee was approved by a majority of the Company's Board of
Directors. Upon termination of the Employee by the Company under
this Paragraph 7(b), the Company shall pay the Employee in a lump
sum an amount equal to the Employee's pro rata salary, as set out in
Paragraph 5(a) hereof, that would have otherwise been due for the
remainder of the Employment Term or two (2) years, whichever is
greater. In addition, the Company shall pay the Employee any Bonus
and Incentive Plan payment(s) accrued for the preceding fiscal year
but not yet paid or set aside and the pro rata portion of any Bonus
and Incentive Plan payment for the year in which termination
occurred to the extent that the performance goals are met.
c. Termination for Cause: Resignation Without Good Reason. If, before
the expiration of the Employment Term, the company terminates the
Employee's employment for Cause, as defined in Paragraph 7(c)
hereof, or if the Employee
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resigns from his employment hereunder, other than for the reasons
set out in Paragraphs 7(a) and 8 hereof, the Employee shall be
entitled to no compensation in any form after the date of his
termination.
(1) The Company may terminate the Employment Term 10 days after
written notice to the Employee for "Cause," which under this
Agreement shall mean: (i) the Employee's material breach of
this Agreement, which breach is not cured within10 days of
receipt by the Employee of written notice for the Company
specifying the breach; (ii) the Employee's gross negligence in
the performance of his duties hereunder, intentional
nonperformance or mis-performance of such duties, or refusal
to abide by or comply with the directives of the Board, or the
Company's policies and procedures, which actions continue for
a period of at least 10 days after receipt by the Employee of
written notice of the need to cure or cease; (iii) the
Employee's willful dishonesty, fraud, or misconduct with
respect to the business or affairs of the Company, and that in
the judgment of a majority of the Company's Board materially
and adversely affects the operations or reputation of the
Company; (iv) the Employee's conviction of a felony or other
crime involving moral turpitude; (v) the 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; or (vi) the declaration by court order of
the Employee's unsound mind. In the event of a termination for
Cause, as enumerated above, the Employee shall have no right
to any severance compensation.
d. If, before the expiration of the Employment Term, the Employee
resigns his employment for the reasons set forth in Paragraphs 7(a)
or 8, the Employee dies or becomes disabled, or the Company
terminates the Employee's employment other than for Cause, then, in
any such event, the Employee shall have the right to put to the
Company all of his Common Stock and Common Stock Equivalents (as
such terms are defined in the Stockholders' Agreement), including
without limitation, any non-vested options granted to the Employee
under the Company's 1996 Option Plan which would vest pursuant to
the terms of such Plan within two years of such termination event
shall immediately vest, and become exercisable for a period of up to
one year after the date of termination and the Company shall be
obligated to purchase such Common Stock, Common Stock Equivalents
and vested options, in accordance with the provisions of Section 4.7
of the Stockholders' Agreement dated the date hereof among the
Company, the Employee and the Xxxxxx Parties (as defined herein).
8. Change in Management. If there is substantial change in the management of
the Company, wherein any Board of Directors that may be elected becomes
opposed to, or acts contrary to, the policy of the Board of Directors
elected after the consummation of the current transaction, and as a result
thereof, Employee, in his sole discretion, finds it difficult for him to
work harmoniously and effectively with any such Board of Directors of the
Company, or the Board of Directors of the Company shall determine (that
Employee shall not be the President and Chief Executive Officer of the
Company, or
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Employee shall not be elected as a member of the Board of Directors of the
Company), then, in any such events, Employee shall have the absolute right
and option to terminate this Agreement upon giving the Company sixty (60)
days written notice of his intention to do so. Upon such termination, the
Employee shall be entitled to a lump sum payment of an amount equal to his
annual salary as set out in Paragraph 5(a) of this Agreement for the
remainder of his Employment Term or two years, whichever his greater.
9. Indemnification. The Company agrees to indemnify and defend Employee (and
his heirs, executors and administrators) from all claims, liabilities,
judgments, settlements, costs and expenses, including all attorney's fees,
imposed upon or incurred by him on an as incurred basis in connection will
or resulting from any action, suit, proceeding, or claim to which he is or
may be made a party by reason of his being or having been an employee or
officer or Director of the Company or the company's subsidiaries or
affiliates or by reason of his being or have been a Trustee of the
Company's 401(k) plan (whether or not an employee or officer or Director
or Trustee at the time such costs or expenses are incurred by or imposed
upon him).
Such right of indemnification shall not be deemed exclusive of any rights
to which he may be entitled otherwise.
10. Death or Disability of Employee. In the event of the Employee's death or
permanent disability during the term of this Agreement, the Employment
Term shall be terminated as of the date of death or the date of
determination of the Employee's permanent disability in accordance with
the Disability Plan the in effect, as the case may be, except as to the
following:
a. The salary being paid to the Employee by the Company as of the date
of death or permanent disability shall continue to be paid to
Employee's estate or disabled Employee for a period of three (3)
months after the date of death or, in the case of disability, until
the date of commencement of long-term disability payments under the
Disability Plan as then in effect.
b. The Company shall cooperate and take all necessary steps to
effectuate the timely payment of the insurance proceeds established
in Paragraph 6(d) of this Agreement.
c. All accrued and unpaid Bonuses and Incentive Plan payments and
benefits under this Agreement, whatsoever in nature, shall
immediately vest and be payable to the Employee's estate or the
disabled Employee as applicable.
d. All stock options and other Common Stock Equivalents shall vest
immediately as set forth in Paragraph 7(d) and shall remain
exercisable for at least one year from the date of death or date of
termination due to disability.
11. Assignment of Agreement. The obligations of the Company under this
Agreement shall be binding upon the successors and assign of the Company.
In the event this contract is assigned, Employee shall be entitled to
enforce the provisions of this Agreement or, in his sole discretion,
terminate this Agreement upon the terms provided in Paragraph 8 hereof.
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For purposes of this Agreement, the term "successors" and "assigns" shall
include any person, firm, corporation, or other entity which at any time,
whether by merger, reorganization, purchase, or otherwise, shall acquire
substantially all or control of the assets, stock, or business of the
Company. No assignment shall release the Company from its liability under
this Agreement.
12. Amendments. This Agreement cannot be changed or terminated orally and no
waiver of compliance with any provision or condition hereof shall be
effective unless evidenced by an instrument in writing duly executed by
the parties hereto and sought to be charged by such waiver.
13. Writing. This Agreement sets forth the entire understanding of the parties
with respect to the employment of the Employee by the Company and
supersedes any and all prior agreements, arrangements and understandings
relating to the subject matter hereof, including that certain Employment
Agreement dated April 1, 1994 by and between the Employee and Executive
Office Group, Inc. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
14. Waiver. The waiver by the Company or the Employee of any breach of any
provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach of this Agreement.
15. General Provision.
a. Should the parties disagree as to the meaning or effect of the
provisions of this Agreement, they shall attempt to negotiate a
settlement of their differences. If, however, the negotiations are
unsuccessful, either party may seek the aid of a court of competent
jurisdiction in the City, County and State of New York, to either
settle disputes arising as to the meaning or intent of this
Agreement or to declare the parties rights to enforce this
Agreement. In that event, the court shall deny attorneys' fees and
costs to the party not substantially prevailing and award the same
to the party who substantially prevails. Notwithstanding the
foregoing, any controversy or claims arising out of, or elating to
this Agreement or the breach thereof, shall at the option of either
party be settled by arbitration in the New York area in accordance
with the rules of commercial arbitration then obtaining of the
American Arbitration Association, and judgment upon the award
rendered by be entered in any court having jurisdiction thereof.
b. In the event that any term, provision, or Paragraph of this
Agreement is declared illegal, void or unenforceable, the same shall
not effect or impair the other terms, provisions or Paragraphs of
this Agreement. Covenants contained in this Agreements shall be
dependent. The doctrine of severability shall be applied. The
parties do not intend by this Statement to imply the illegality,
voidness or unenforceability of any of the terms, provisions or
Paragraphs of this Agreement.
16. Captions. The captions for each Paragraph are not part of this Agreement,
but are for identification purposes.
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17. Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the State of New York.
18. Notices. Any notices, writing, report or other document required or
permitted hereunder shall be in writing and shall be given by prepaid
registered or certified mail, with return receipt requested, addressed as
follows:
a. If to the Company:
ALLIANCE National Incorporated
000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attn.: Xxxx Xxxxxx, Chief Financial Officer
With a Copy to:
Xxxxx & Xxxxx, LLP
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxx X. Xxxxxxx, Esq.
b. If to the Employee:
Xxxxx X. Xxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
The date of any such notice and of service thereof shall be deemed to be the
date of dispatch. Either party may change its address for purposes of notice by
giving notice in accordance with the provisions of this Paragraph.
19. Restriction on Competition.
a. During the Employment Term, and for a period of two years
thereafter, the 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"):
(1) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant, advisor, or
sales representative, in any business or entity that is
currently engaged in owning, operating and/or managing
executive office suites and providing related business support
services, including secretarial, telecommunications, word
processing, printing and copying, in direct competition with
the Company, within 100 miles of any location where the
Company conducts business (the "Territory");
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(2) call upon any Person who is, at that time, within the
Territory, an employee of the Company for the purpose or with
the intent of enticing such employee away from or out of the
employ of the Company;
(3) 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 within the Territory for the purpose of soliciting or
selling products or services in direct competition with the
Company within the Territory; or
(4) on Employee's own behalf or on the behalf of any competitor,
call upon any Person for the purpose of making an acquisition
proposal who or that, during Employee's employment by the
Company was either called upon by the Company as a prospective
acquisition candidate or was the subject of an acquisition
analysis conducted by the Company.
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 and enters into a business or pursues
other activities that, at such time, are not in competition with the
Company, Employee shall not be chargeable with a violation of this
Paragraph 19 if the Company subsequently enters the same (or in
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 not actual knowledge that
his actions violate the terms of this Paragraph 19, Employee shall
not be deemed to have breached the restrictive covenants contained
herein if, promptly after being notified by the Company of such
breach. Employee ceases the prohibited actions.
d. The covenants in this Paragraph 19 are severable and separate, and
the unenforceability of any specific covenants shall not affect the
provisions of any other covenant. If any provision of this Paragraph
19 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.
e. All of the covenants in this Paragraph 19 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, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of
such covenants; provided, that upon the failure of the
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Company to make such 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 Paragraph 19. It is specifically agreed that the
period of two years stated at the beginning of this Paragraph 19,
during which the agreements and covenants of Employee made in this
Paragraph 19 shall be effective, shall be computed by excluding from
such computation any time during which Employee is in violation of
any provision of this Paragraph 19.
f. If the time period specified by this Paragraph 19 shall be reduced
by law or court decision, then, notwithstanding the provisions of
Paragraph 7 above, following termination of the Employee's
employment with the Company, the 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 Paragraph 19 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 Paragraph 7
above. If Employee is subject to a restriction on competitive
activity as a party to that certain Stockholders' Agreement, dated
as of November 15,1996, by and among the stockholders identified
therein (the "Stockholders' Agreement"), then Employee shall abide
by, and in all cases be subject to, the restrictive covenants
(whether in this Paragraph 19 or in the Stockholders' 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 Paragraph 19(g) shall be construed and
interpreted in light of the duration of the applicable restrictive
covenants.
g. Employee has carefully read and considered the provisions of this
Paragraph 19 and, having done so, agrees that the restrictive
covenants in this Paragraph 19 impose a fair and reasonable
restraint on Employee and are reasonably required to protect the
interests of the Company, and its 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
throughout the term of these covenants.
20. 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 (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
because such Confidential Information encompasses technical know-how,
trade secrets, or technical, financial, organizational,
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sales, or other valuable aspects of the Company'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.
21. Inventions. Employee shall disclose promptly to the Company 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 and that are directly related to the business or activities of
the Company 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.
22. Return of Company Property. Promptly upon termination of Employee's
employment by the Company, or by the Employee, 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, or its representatives, vendors, or customers that pertain to
the business of the Company, whether in paper, electronic, or other form;
and (c) all keys, credit cards, vehicles, and other property of the
Company. 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, as the case may be, and be subject
at all times to their discretion and control.
23. Past Due Payment. Company agrees that any payments due to Employee
hereunder which are not paid within fourteen (14) days of their due date,
shall accrue interest at the greater of fourteen (14) percent per annum or
prime plus five (5) percent.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals the
date and year first above written.
COMPANY
Witness: Alliance National Incorporated
/s/ Xxxxxx Xxxxx By: /s/ Xxxx Xxxxxx
----------------------------------- ---------------------------------------
Xxxxxx Xxxxx Name: Xxxx Xxxxxx
Title: Chief Financial Officer
Witness: EMPLOYEE:
/s/ Xxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxx
---------------------------------- ---------------------------------------
Xxxxxx Xxxxx Xxxxx X. Xxxxx
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APPENDIX I
GUIDELINES FOR PERFORMANCE BONUS DETERMINATION
Definitions:
"EPS" = For each fiscal year, the after-tax net income
divided by the weighted averaged of the fully
diluted shares. In determining net income, the
following expenses shall not be included: (i)
extraordinary gain or loss on the sale or
disposition of assets, (ii) the amount of any
performance bonus and incentive plan bonus payable
to the Employee and any other executive officer of
the Company, (iii) any costs or charge
attributable to the issuance or exercise of any
common stock, options or warrants, and (iv) any
changes in the accounting policies applicable for
the fiscal year as approved by the Board.
"Core Business" = The businesses and assets of the Company on the
first day of each fiscal year.
"EPS Target" = For each fiscal year, the forecasts of EPS (set
annually by the Company's Board of Directors) for:
(1) Core Business; and (2) Acquired Business
applying assumptions as to when such Acquisition
occur throughout each fiscal year.
"Pro Forma Target" = For each fiscal year, the forecast of EPS (set
annually by the Company's Board of Directors) for:
(1) Core Business; and (2) Acquired Businesses
assuming such Acquisitions occurred as of the
first day of the fiscal year.
"Actual EPS Results" = For each fiscal year, (1) actual EPS of Core
Businesses and (2) actual EPS for Acquisitions
whenever they are consummated during the fiscal
year.
"Pro Forma EPS Results" = For each fiscal year (1) the actual EPS for Core
Business and (2) actual EPS for Acquisitions
annualized to give effect to such Acquisitions
having occurred as of the first day of the fiscal
year.
"Bonus Factor" = For fiscal year 1997 (7/1/96 - 6/30/97), $250,000.
For fiscal year 1998 (7/1/97 - 6/30/98), $350,000.
For fiscal year 1999 (7/1/98 - 6/30/99), $500,000.
For each subsequent fiscal year thereafter, the
Bonus Factor shall be set by a majority of the
Company's Board of Directors.
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Determination of Bonus
Employee's Bonus for each fiscal year shall be determined by completing
the two-step calculations set forth below using the formula applicable in each
of Step 1 and Step 2.
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Step 1
Actual EPS Results 80% or Actual EPS Results 79% - Actual EPS Results below
more of EPS Target 60% of EPS Target 60% of EPS Target means
no Step 1 bonus shall be
paid.
Achieved Percentage x Achieved Percentage x
(66.6% of Bonus Factor) (66.6% of Bonus Factor) /
2
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Step 2
Pro Forma EPS Results Pro Forma EPS Results 79% Pro Forma EPS Results
80% or more of Pro Forma - 60% of Pro Forma Target below 60% means no Step
Target 2 bonus shall be paid.
Achieved Percentage x Achieved Percentage x
(33.4% of Bonus Factor) (33.4% of Bonus Factor) /
2
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