EXHIBIT 10.27
PACER INTERNATIONAL, INC.
0000 XX. XXXXXX XXXXXXXXX, XXXXX 000
XXXXXXXXX, XXXXXXXXXX 00000
June 5, 1998
Xx. Xxxxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
Employment Agreement
Dear Xxxxxxx:
This letter sets forth the terms of your employment with Pacer
International, Inc. (the "Company"), and its subsidiaries Interstate
Consolidation Service, Inc., d/b/a Pacer International, Inc. ("Pacer
Intermodal"), Cross Con Terminals, Inc. ("Cross Con Terminals"), and Cross Con
Transport, Inc. ("Cross Con Transport," and together with Cross Con Terminals,
the "Cross Con Companies," and the Cross Con Companies together with Pacer
Intermodal, the "Subsidiaries").
1. Duties. On the terms and subject to the conditions contained in
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this Agreement, you will be employed as an Executive Vice President of the
Company, the President of the Eastern Division of Pacer Intermodal, and the
President of each of Cross Con Terminals and Cross Con Transport, and shall
perform such duties and services consistent with such positions as may
reasonably be assigned to you from time to time by the Board of Directors of the
Company or each such Subsidiary or by the Chairman or the President of the
Company or the President of Pacer Intermodal, to whom you will report. You will
have such authority as is reasonably necessary to perform your duties hereunder.
In performing such duties you will not be required to relocate your principal
office outside of a 50-mile radius from the Chicago metropolitan area.
2. Term. Unless sooner terminated in accordance with the applicable
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provisions of this Agreement, your employment hereunder shall be for the period
(including any extensions thereof, the "Employment Period") commencing on the
date hereof (the "Commencement Date") and ending on the third anniversary of the
date hereof.
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3. Time to be Devoted to Employment. During the Employment Period,
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you will devote substantially all of your working energies, efforts, interest,
abilities and time to the business and affairs of the Company and the
Subsidiaries. You will not engage in any other business or activity which, in
the reasonable judg ment of the Board of Directors of the Company or each such
Subsidiary, would conflict or interfere with the performance of your duties as
set forth herein, whether or not such activity is pursued for gain, profit or
other pecuniary advantage.
4. Base Salary; Bonus; Benefits.
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(a) During the Employment Period, the Company or any of its
Subsidiaries shall pay you a minimum annual base salary (the "Base Salary") of
$220,000, payable in such installments (but not less often than bi-weekly) as is
generally the policy of the Company or such Subsidiary with respect to the
payment of regular compensation to its executive officers. The Base Salary may
be increased from time to time in the sole discretion of the Board of Directors
of the Company. During the Employment Period, you will also be entitled to four
weeks vacation per year and such other benefits as may be made available to
other executive officers of the Company or such Subsidiary generally, including,
without limitation, (i) participation in such health, life and disability
insurance programs and retirement or savings plans as the Company or such
Subsidiary may from time to time maintain in effect; (ii) the use of a vehicle
provided by the Company or such Subsidiary or an equivalent monthly car
allowance in accordance with the Company's or such Subsidiary's policy with
respect to its senior executives; and (iii) participation in such stock option
plans of the Company as may be adopted from time to time for the executive
officers of the Company on terms determined by the Board of Directors of the
Company.
(b) In addition to the Base Salary and benefits set forth in
paragraph (a) above, you will be entitled to receive a cash incentive bonus, if
any, with respect to each fiscal year of the Company occurring during the
Employment Period, determined pursuant to Section 4(c). Such bonus shall be due
and payable as soon as practicable, but in no event later than 30 days,
following the Company's receipt from its public accountants of the audited
consolidated financial statements of the Company and its subsidiaries. If your
employment with the Company is terminated for any reason other than without
"cause" pursuant to Section 7(b), the Company (or any of its affiliates)
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will not pay you a bonus with respect to the fiscal year in which your
employment is terminated or thereafter. If your employment with the Company is
terminated without "cause" pursuant to Section 7(b) at any time during any
fiscal year, you will be entitled to receive that portion of the bonus payable
for such fiscal year pro rated through the date of such termination based on the
number of days elapsed through the termination date over 365 days, payable in
accordance with the second sentence of this Section 4(b).
(c) The bonuses payable for each calendar year during the
Employment Period shall be subject to and determined on the achievement by the
Company and its subsidiaries of the same specified performance targets
applicable to the other senior managers of the Company and its subsidiaries that
are determined by the Board of Directors of the Company. Such bonus for the 1998
calendar year will range from $23,300 upon the achievement of the minimum
specified targets to $60,000 upon the achievement of the maximum specified
targets. For the calendar year 1999 and each calendar year thereafter during the
Employment Period, the bonus shall range from $35,000 upon the achievement of
the minimum specified targets to $90,000 upon the achievement of the maximum
specified targets.
5. Reimbursement of Expenses. During the Employment Period, the
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Company or any of the Subsidiaries shall reimburse you in accordance with the
Company's or such Subsidiary's policy for all reasonable and necessary traveling
expenses and other disbursements incurred by you for or on behalf of the Company
and the Subsidiaries in connection with the performance of your duties hereunder
upon presentation of appropriate receipts or other documentation therefor, in
accordance with all applicable policies of the Company or such Subsidiary.
6. Disability or Death. If, during the Employment Period, you are
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incapacitated or disabled by accident, sickness or otherwise (hereinafter, a
"Disability") so as to render you mentally or physically incapable of performing
the services required to be performed by you under this Agreement for any period
of 90 consecutive days or for an aggregate of 180 days in any period of 360
consecutive days, the Company may, at any time thereafter, at its option,
terminate your employment under this Agreement immediately upon giving you
written notice to that effect. In the event of your death, your employment will
be deemed terminated as of the date of death.
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7. Termination.
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(a) The Company may terminate your employment hereunder at any
time for "cause" by giving you written notice of such termination, with
reasonable specificity of the grounds therefor. For purposes of this Section 7,
"cause" shall mean (i) willful misconduct with respect to the business and
affairs of the Company or any of its subsidiaries, (ii) willful neglect of your
duties or the failure to follow the lawful directions of the Board of Directors
of the Company or any Subsidiary or more senior officers of the Company to whom
you report, including, without limitation, the violation of any material policy
of the Company or any of the Subsidiaries that is applicable to you and of which
you have knowledge, (iii) the material breach of any of the provisions of this
Agreement or any Related Agreement (as defined below) and, if such breach is
capable of being cured, your failure to cure such breach within 30 days of
receipt of written notice thereof from the Company, (iv) the commission of a
felony, (v) the commission of an act of fraud or financial dishonesty with
respect to the Company or any of its subsidiaries or affiliates or (vi) the
commission of any crime that involves moral turpitude or fraud or that otherwise
has a material adverse effect on the business, assets, liabilities, operations,
affairs or prospects of the Company or any of its subsidiaries or affiliates. A
termination pursuant to this Section 7(a) shall take effect immediately upon the
giving of the notice contemplated hereby. In this Agreement, the term "Related
Agreement" means the Stock Purchase Agreement dated as of the date hereof
between you, the Company, Cross Con Terminals and Cross Con Transport and the
Stockholders Agreement dated as of the date hereof among the Company, you and
the other stockholders named therein.
(b) The Company may terminate your employment hereunder at any
time without "cause" by giving you written notice of such termination, hich
termination shall be effective as of the date of delivery of such notice,
provided that such date shall not be earlier than the date of the notice.
8. Effect of Termination.
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(a) Upon the effective date of a termination of your employment
under this Agreement for any reason other than a termination without cause
pursuant to Section 7(b), neither you nor your beneficiaries or estate shall
have any further rights under this Agreement or any claims against the Company
or any of its subsidiaries or affiliates arising out of this Agreement,
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except the right to receive, within 30 days after the effective date of such
termination:
(i) the unpaid portion of the Base Salary provided for in Section
4, computed on a pro rata basis to the effective date of such termination;
(ii) reimbursement for any expenses for which you shall not have
theretofore been reimbursed, as provided in Section 5; and
(iii) the unpaid portion of any amounts earned by you prior to the
effective date of such termination pursuant to any benefit program in which you
participated during the Employment Period; provided, however, you shall not be
entitled to receive any benefits under any benefit program that have accrued
during any period if the terms of such program require that the beneficiary be
employed by the Company or any of its subsidiaries as of the end of such period.
(b) Upon termination of your employment under this Agreement
pursuant to Section 7(b), neither you nor your beneficiaries or estate shall
have any further rights under this Agreement or any claims against the Company
or any of its subsidiaries or affiliates arising out of this Agreement, except
the right to receive, within 30 days after the effective date of such
termination, in the case of amounts due pursuant to clause (i) below, and at
such other times as provided in clause (ii) and (iii) below in the case of
amounts due thereunder:
(i) the payments, if any, referred to in Section 8(a) above, to the
extent not covered by clause (ii) and (iii) of this Section 8(b);
(ii) the right to continue to receive the Base Salary through the
third anniversary of the Commencement Date, payable during such period in such
manner as the Base Salary is payable pursuant to Section 4, shall be reduced by
the product of (x) any amounts you (or your beneficiaries or estate) receive or
are entitled to receive as salary or other cash compensation from subsequent
employment or for services rendered during such period multiplied by (y) 50%
(and in order to carry out the intent of this clause, you agree, for yourself
and your beneficiaries or estate, to provide the Company with such information
as the Company may reasonably request regarding your receipt of salary and other
cash compensation from subsequent
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Page 6
employment or for services rendered or to be rendered during or with respect to
such period); and
(iii) the right to receive any bonus payable in accordance with
Section 4 with respect to the fiscal year in which such termination occurs
(payable at such time as bonuses for such fiscal year are paid to the Company's
other senior executives generally).
Notwithstanding anything in this Agreement to the contrary, your
beneficiaries or estate will be entitled to continue to receive all payments
specified in this Section 8(b) if you die after the date of a termination
without "cause."
9. Disclosure of Information.
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(a) From and after the date hereof, you shall not at any time use
or disclose to any person or entity (other than any officer, director, employee,
affiliate or representative of the Company or any of its subsidiaries), except
as required in connection with the performance of your duties under and in
compliance with this Agreement and as required by law and judicial process, any
Confidential Information (as hereinafter defined) heretofore acquired or
acquired during the Employment Period for any reason or purpose whatsoever, nor
shall you make use of any of the Confidential Information for your own purposes
or for the benefit of any person or entity except the Company or any subsidiary
thereof.
(b) For purposes of this Agreement, "Confidential In formation"
shall mean (i) the Intellectual Property Rights (as hereinafter defined) of the
Company and its subsidiaries and (ii) all other information of a proprietary or
confidential nature relating to the Company or any subsidiary thereof, or the
business or assets of the Company or any such subsidiary, including, without
limitation, books, records, agent and independent contractor lists and related
information, customer lists and related information, vendor lists and related
information, supplier lists and related information, distribution channels,
pricing information, cost information, marketing plans, strategies, forecasts,
financial statements, budgets and projections, other than (i) information which
is generally available to the public on the date hereof, or which becomes
generally available to the public after the date hereof without action by you or
(ii) information which you receive from a third party who does not have any
independent obligation to
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the Company or any of its subsidiaries to keep such information confidential.
(c) As used herein, the term "Intellectual Property Rights" means
all industrial and intellectual property rights, including, without limitation,
patents, patent applications, patent rights, trademarks, trademark applications,
trade names, service marks, service xxxx applications, copyrights, copyright
applications, know-how, certificates of public convenience and necessity,
franchises, licenses, trade secrets, proprietary processes and formulae,
inventions, development tools, marketing materials, instructions, confidential
information, trade dress, logos and designs and all documentation and media
constituting, describing or relating to the foregoing, including, without
limitation, manuals, memoranda and records.
10. Noncompetition Covenant.
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(a) You acknowledge and recognize that during the Employment
Period you will be privy to Confidential Information. You further acknowledge
and recognize that the relationships with vendors, agents and customers of the
Company and the Subsidiaries that you have developed prior to the date hereof
and those that you will maintain or develop during the Employment Period with
the use and assistance of each of the Company and the Subsidiaries and its
properties and assets are of speci al and unique value to the Company and the
Subsidiaries and their affiliates and that the Company and the Subsidiaries
would find it extremely difficult to replace you. Accordingly, in consideration
of the premises contained herein and the consideration you will receive
hereunder (including, without limitation, the severance compensation described
in Section 8(b)(ii), if applicable), without the prior written consent of the
Company, you shall not, at any time during the period commencing on the
Commencement Date and ending on the later of (i) the fifth anniversary of the
Commencement Date and (ii) the second anniversary of the effective date of any
termination of your employment with the Company and its subsidiaries, (a)
directly or indirectly engage in, represent in any way, or be connected with,
any Competing Business (as defined below), whether such engagement shall be as
an officer, director, owner, employee, partner, affiliate or other participant
in any Competing Business, (b) assist others in engaging in any Competing
Business in the manner described in clause (a) above, (c) induce other employees
of the Company or any of its subsidiaries to terminate their employment with the
Company or any of its subsidiaries or to engage in any Competing Business
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June 5, 1998
Page 8
or (d) induce any customer, vendor or agent or any other person or entity with
which the Company or any subsidiary or affiliate thereof has a business
relationship, contractual or otherwise, to terminate or alter such business
relationship. This covenant is considered an integral part of this Agreement.
The foregoing restriction shall not apply to your ownership of publicly traded
securities which represent not more than 5% of the ownership interests of the
issuer.
(b) You understand that the foregoing restrictions may limit your
ability to earn a livelihood in a business similar to the business of the
Company or any subsidiary or affiliate thereof, but you nevertheless believe
that you have received and will receive sufficient consideration and other
benefits as an employee of the Company and the Subsidiaries and under the terms
of this Agreement to justify clearly such restrictions which, in any event
(given your education, skills and ability), you do not believe would prevent you
from earning a living.
(c) As used herein, the term "Competing Business" shall mean any
business conducted in any city or county in any state of the United States which
is engaged in the business of providing any of the following transportation
services to third party customers:
(i) intermodel marketing services in any city or county in any
state or province located in the continental United States, Canada or Mexico; or
(ii) intermodal drayage services (A) in any city or county in the
State of Illinois or (B) in any other city or county in any state or province
located in the continental United States, Canada or Mexico where any of the
Cross Con Companies provides drayage services at the time of, or where there are
fixed plans for any of the Cross Con Companies to provide drayage services at
any time within 12 months after, the termination of your employment under this
Agreement; or
(iii) any other transportation services in any city or county in the
United States, Canada or Mexico provided by any of the Company or its
subsidiaries at the time of, or where there are fixed plans for any of the
Company or its subsidiaries to provide such other transportation services at any
time within 12 months after, the termination of your employment under this
Agreement and with respect to which you
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have had direct or indirect supervisory authority as an officer of the Company
or any of the Subsidiaries.
Anything contained in the immediately preceding sentence to the
contrary notwithstanding, any entity which has separate divisions or business
units, one or more of which are engaged in a business described above, will not
be deemed a Competing Business with respect to those portions of such entity
which are not engaged in a business described above so long as your association
with any such separate division or business unit (fully taking into account your
functions and the nature of your work at such division or business unit) does
not involve existing customers of the Company or any of its subsidiaries or
relate in any material respect to such portion of such business which would be a
Competing Business hereunder.
11. Inventions Assignment. During the Employment Period, you shall
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promptly disclose, grant and assign to the Company for its sole use and benefit
any and all inventions, improvements, technical information and suggestions
reasonably relating to the business of the Company or any of its subsidiaries
(collectively, the "Inventions") which you may develop or acquire during the
Employment Period (whether or not during usual working hours), together with all
patent applications, letters patent, copyrights and reissues thereof that may at
any time be granted for or with respect to the Inventions. In connection
therewith (a) you shall, at the expense of the Company or any of its
Subsidiaries (including a reasonable payment (based on your last per diem
earnings) for the time involved if you are not then in the Company's or any of
its subsidiaries' employ or receiving severance payments from the Company or any
of its subsidiaries pursuant to Section 8(b)(ii)), promptly execute and deliver
such applications, assignments, descriptions and other instruments as may be
necessary or proper in the opinion of the Company to vest title to the
Inventions and any patent applications, patents, copyrights, reissues or other
proprietary rights related thereto in the Company and to enable it to obtain and
maintain the entire right and title thereto throughout the world; and (b) you
shall render to the Company, at its expense (including a reasonable payment
(based on your last per diem earnings) for the time involved if you are not then
in the Company's or any of its subsidiaries' employ or receiving severance
payments from the Company or any of its subsidiaries pursuant to Section
8(b)(ii)), reasonable assistance as it may require in the prosecution of
applications for said patents, copyrights, reissues or other proprietary rights,
in the prosecution or defense of interference's which may be declared
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involving any said applications, patents, copyrights or other proprietary rights
and in any litigation in which the Company or any of its subsidiaries may be
involved relating to the Inventions.
12. Assistance in Litigation. At the request and expense of the
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Company (including a reasonable payment (based on your last per diem earnings)
for the time involved if you are not then in the Company's or any of its
subsidiaries' employ or receiving severance payments from the Company or any of
its subsidiaries pursuant to Section 8(b)(ii)) and upon reasonable noti ce, you
shall, at all times during and after the Employment Period, furnish such
information and assistance to the Company as it may reasonably require in
connection with any issue, claim or litigation in which the Company or any of
its subsidiaries may be involved (but only to the extent that providing such
information or assistance does not unreasonably interfere with your other
business activities if you are no longer employed by the Company or any of its
subsidiaries at the time of any such request); provided, however, that you will
not be contractually obligated by this Section 12 to furnish any such
information or assistance in the event that you are an opposing party to the
Company or any of its subsidiaries with respect to any pending litigation.
13. Entire Agreement; Amendment and Waiver. This agreement and the
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other writings referred to herein contain the entire agreement between the
parties hereto with respect to the subject matter hereof and thereof and
supersede any prior agreement between you and the Company or any predecessor of
the Company or any of their respective subsidiaries or affiliates (including,
without limitation, that certain letter agreement dated April 3, 1998, among you
and the Company). No waiver, amendment or modification of any provision of this
Agreement shall be effective unless in writing and signed by each party hereto.
The waiver by either party of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any subsequent
breach by such other party.
14. Notices. All notices or other communications pursuant to this
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Agreement shall be in writing and shall be deemed to be sufficient if delivered
personally, telecopied, sent by nationally-recognized, overnight courier or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
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June 5, 1998
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(a) if to the Company or any Subsidiary, to:
Pacer International, Inc.
0000 Xx. Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
(b) if to you, to:
Xx. Xxxxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
Telephone:
Telecopier:
with a copy to:
Pembroke & Xxxxx, P.C.
000 X. Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Attention: Xxxx Pembroke, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
All such notices and other communications shall be deemed to have been given and
received (i) in the case of personal delivery, on the date of such delivery,
(ii) in the case of delivery by telecopy, on the date of such delivery, (iii) in
the case of delivery by nationally-recognized, overnight courier, on the
business day following dispatch, and (iv) in the case of mailing, on the third
business day following such mailing.
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15. Headings. The section headings in this Agreement are for
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convenience only and shall not control or affect the meaning of any provision of
this Agreement.
16. Severability. In the event that any provision of this Agreement is
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determined to be partially or wholly invalid, illegal or unenforceable in any
jurisdiction, then such provision shall, as to such jurisdiction, be modified or
restricted to the extent necessary to make such provision valid, binding and
enforceable, or if such provision cannot be modified or restricted, then such
provision shall, as to such jurisdiction, be deemed to be excised from this
Agreement; provided, however, that the binding effect and enf orceability of the
remaining provisions of this Agreement, to the extent the economic benefits
conferred upon the parties by virtue of this Agreement remain substantially
unimpaired, shall not be affected or impaired in any manner, and any such
invalidity, illegality or unenforceability with respect to such provisions shall
not invalidate or render unenforceable such provision in any other jurisdiction.
17. Remedies. You acknowledge and understand that the provisions of
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this Agreement are of a special and unique nature, the loss of which cannot be
adequately compensated for in damages by an action at law, and thus, the breach
or threatened breach of the provisions of this Agreement would cause the Company
irreparable harm. You further acknowledge that in the event of a breach of any
of the covenants contained in paragraphs 9, 10, or 11, the Company and its
subsidiaries shall be entitled to immediate relief enjoining such violations in
any court or before any judicial body having jurisdiction over such a claim. All
remedies hereunder are cumulative, are in addition to any other remedies
provided for by law and may, to the extent permitted by law, be exercised
concurrently or separately, and the exercise of any one remedy shall not be
deemed to be an election of such remedy or to preclude the exercise of any other
remedy.
18. Representation. You hereby represent and warrant to the Company
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that (a) the execution, delivery and performance of this Agreement by you does
not breach, violate or cause a default under any agreement, contract or
instrument to which you are a party or any judgment, order or decree to which
you are subject and (b) you are not a party to or bound by any employment
agreement, consulting agreement, noncompete agreement, confidentiality agreement
or similar agreement with any other person or entity.
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June 5, 1998
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19. Benefits of Agreement; Assignment. The terms and provisions of
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this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns, representatives, heirs and
estate, as applicable.
20. Counterparts. This Agreement may be executed in any number of
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counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
21. Governing Law. This Agreement shall be governed by and construed
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in accordance with the domestic laws o f the State of Illinois without giving
effect to any choice or conflict of law provision or rule (whether of the State
of Illinois or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Illinois.
22. Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
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CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER
THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
*******
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If the above terms are satisfactory to you, please acknowledge our
agreement by signing the enclosed copy of this letter in the space provided
below and returning it to the undersigned.
Very truly yours,
PACER INTERNATIONAL, INC.
/s/ Xxxxx Xxxxxxxx
By:_____________________________
Name: Xxxxx Xxxxxxxx
Title: CFO and E.V.P.
Accepted and agreed to:
/s/ Xxxxxxx X. Xxxxxx
_____________________________
Xxxxxxx X. Xxxxxx
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June 5, 1998
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SCHEDULE 4(c)
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OPERATING INCOME
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For purposes of Section 4(c) of this Agreement, "Operating Income"
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means, for any calendar year, the earnings before interest expense and interest
income, income taxes and amortization of goodwill and acquisition and financing
fees of the Company and its subsidiaries, determined on a consolidated basis and
in accordance with generally accepted accounting principles consistently applied
for the calendar year in question, as set forth on the audited consolidated
statement of income of the Company and its subsidiaries for the fiscal year in
question; provided, however, that Operating Income shall (x) exclude management
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fees, transaction expenses, non-operating gains and losses as determined by the
Board of Directors of the Company and such other non-cash items as shall be
determined by the Board of Directors of the Company and (y) be determined after
giving effect to any and all bonuses payable by the Company and/or any of its
subsidiaries to management or employees of the Company and/or any of its
subsidiaries hereunder or otherwise. In the event that the Company and/or any
of its subsidiaries consummate any mergers or acquisitions (whether of assets,
stock or other interests) or other extraordinary transactions, the Board of
Directors of the Company shall in good faith make such adjustments to the
targets set forth in Section 4(b) for Operating Income (as defined above) to
take into account the effects of any such acquisition or other extraordinary
transaction.
