EXHIBIT
10.7
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND
RESTATED EMPLOYMENT AGREEMENT, dated as of May 12, 2006 between Neal
Goldberg (“Executive”) and THE CHILDREN’S PLACE RETAIL STORES, INC., a Delaware
corporation (“Employer”).
W I T N E S S E T H:
WHEREAS, Employer and Executive are parties to a
certain Employment Agreement dated January 22, 2004, as amended by letter
dated May 17, 2005 (the “Prior Agreement”); and
WHEREAS, Executive and Employer desire to amend and
restate the Prior Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements herein contained, the parties agree as
follows:
SECTION 1
EMPLOYMENT
OF EXECUTIVE
1.01. Employer hereby agrees to employ
Executive and Executive hereby agrees to be and remain in the employ of
Employer upon the terms and conditions hereinafter set forth.
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SECTION 2
EMPLOYMENT
PERIOD
2.01. The term of Executive’s
employment under this Agreement shall be effective as of May 12, 2006 (“Effective
Date”) and shall continue until termination of Executive’s employment in
accordance with the provisions of Section 5. The period of Executive’s
employment by Employer shall be referred to as the “Employment Period” and the
date of Executive’s termination of employment with the Employer shall be
referred to as the “Termination Date.”
SECTION 3
DUTIES
3.01. Generally. During the Employment Period,
Executive (a) shall be employed as President of Employer, (b) shall
serve as a member of the Executive Management Committee of Employer, (c) shall
devote all of his business time and attention to the business and affairs of
Employer and other enterprises controlled by, or under common control with,
Employer (Employer and such entities being referred to collectively as the “Company”),
and (d) shall use his best efforts, skills and abilities in the diligent
and faithful performance of his duties and responsibilities hereunder. Notwithstanding
the foregoing, Executive shall have the right to (a) engage in personal
investment activities for himself and his family and (b) engage in
charitable and civic activities, provided the outside activities set forth in (a) and
(b) hereof do not interfere with Executive’s performance of his duties and
responsibilities hereunder. In no event shall Executive serve as an officer or
director of any other business corporation or as a general partner
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of any partnership except with the prior written approval of the Chief
Executive Officer of Employer.
3.02. Reporting. Executive shall report directly to
the Chief Executive Officer of Employer. During the Employment Period,
Executive will be subject to all of the written policies, rules and
regulations of which Executive is given notice applicable to senior executives
of Employer and will comply with all directions and instructions of the
Chairman of the Board and the Chief Executive Officer.
SECTION 4
COMPENSATION
4.01. Compensation, Generally. For all services rendered and required to be
rendered by Executive under this Agreement, Employer shall pay to Executive
during and with respect to the Employment Period, and Executive agrees to
accept (in full payment), Base Salary and Performance Bonus, all as more fully
described on Exhibit A (collectively, the “Compensation”).
4.02 Other
Benefits. Except as otherwise
provided herein, during the Employment Period, Executive shall be eligible to
receive such benefits that the Employer generally makes available to Employer’s
senior executives from time to time (other than those benefits provided under
or pursuant to separately negotiated individual employment agreements or
arrangements). Executive’s Base Salary shall constitute the compensation on the
basis of
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which the amount of Executive’s benefits under any such plan or program
shall be fixed and determined.
4.03 Expense
Reimbursement. Employer shall
reimburse Executive for all business expenses reasonably incurred by him in the
performance of his duties under this Agreement upon his presentation, not less
frequently than monthly, of signed, itemized accounts of such expenditures all
in accordance with Employer’s policies and procedures as adopted and in effect
from time to time and applicable to its senior executives.
4.04 Vacations. Executive shall be entitled to
three weeks vacation with additional vacation as approved by the Chief
Executive Officer, each twelve-month period worked, which vacation will accrue
ratably over the course of such twelve-month period, which shall be taken at
such time or times as may be approved by the Chief Executive Officer and shall
not unreasonably interfere with Executive’s performance of his duties under
this Agreement.
4.05 Options. Executive was granted stock
options on January 22, 2004 to purchase 250,000 shares of Common Stock of
the Company at an exercise price equal to the Fair Market Value (as that term
is defined in the Company’s current stock option plan) of the Company’s common
stock as of the close of business on January 22, 2004 (the “Initial Stock
Option”) and pursuant to the vesting schedule set forth in this Section 4.05(a).
Subject to Sections 6.02 and 8.01 hereof, Executive shall vest in the Initial
Stock Option granted herein in accordance with the following schedule: 50,000
shares on January 31, 2005 and 50,000 shares on each of the next four anniversaries
thereof.
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SECTION 5
TERMINATION
OF EMPLOYMENT PERIOD
5.01. Termination Without Cause. At any time during the Employment
Period, by notice to the other, Employer or Executive may terminate Executive’s
employment under this Agreement without cause. Such notice shall specify the
effective date of termination, which in the case of termination by Executive
shall not be less than thirty (30) days after the date of such notice.
5.02. By Employer: Cause. At any time during the Employment
Period, by notice to Executive, Employer may terminate Executive’s employment
under this Agreement for “Cause,” effective immediately. Such notice shall
specify the cause for termination. For the purposes of this Section 5.02, “Cause”
means:
(a)
a breach by Executive of any of the material provisions of this Agreement that
Executive fails to remedy or cease within ten (10) business days after
notice thereof to Executive; or
(b)
any conduct, action or behavior by Executive that has or may reasonably be
expected to have a material adverse effect on the reputation or interests of
the Company or Executive; or
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(c) the commission by Executive of an act
involving moral turpitude, dishonesty or fraud, or the engagement in any other
willful or intentional misconduct, whether or not in connection with Executive’s
employment hereunder; or
(d)
Executive shall have committed an act constituting a felony under the laws of
the United States or any state or political subdivision thereof.
5.03. By
Executive for Good Reason. Executive may, at any time during the Employment
Period by notice to the Employer, terminate Executive’s employment under this
Agreement “for Good Reason” effective immediately. For the purposes of this Section 5.03,
“Good Reason” means:
(a) a relocation of Employer’s
headquarters outside the New York City metropolitan area;
(b) a demotion of Executive’s position, a
material, adverse change in Executive’s duties and responsibilities, or an
adverse change in Executive’s reporting as set forth in Section 3.02;
(c) Employer’s failure to pay any amount
or benefits when due, which failure is not cured within ten (10) business
days after notice to Employer;
(d) Employer’s material breach of this
Agreement which breach is not cured within ten (10) business days after
notice to Employer; or
(e) Ezra Dabah no longer holds the position
of Chief Executive Officer of Employer.
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5.04. Disability. If during the Employment Period,
Executive becomes incapable of fulfilling his obligations hereunder because of
injury or physical or mental illness, and such incapacity exists for a period
of at least 120 consecutive days or for shorter periods aggregating at least
180 days during any period of twelve consecutive months (“Disability”), Employer
may, upon at least fifteen (15) days’ prior written notice to Executive,
terminate Executive’s employment under this Agreement. The Disability of
Executive shall be determined by an independent physician acceptable to both
Employer and Executive or his representative.
SECTION 6
TERMINATION
COMPENSATION
6.01 Entitlement to
Payment Upon Termination Without Cause. Subject to the provisions of
Sections 6.02 and 9.08, if Executive’s employment hereunder is terminated by
Employer pursuant to Sections 5.01, 5.03, or 8.01 at any time thereafter,
Executive shall be entitled to continuation of his Base Salary for a period of
one (1) year following such termination (“Severance Payment”), which
Severance Payment shall be paid to Executive in equal consecutive monthly
installments with the first such installment paid on the first day of the month
next following the effective date of termination of Executive’s employment
hereunder; provided, however, that to the extent necessary to comply with the
restriction of Section 409A(a)(2)(B) of the Internal Revenue Code of
1986, as amended (“Code”) concerning payments to “specified employees,” in no
event shall any portion of the Severance Payment be made earlier than the first
business day of the seventh month following Executive’s Termination Date (“Delayed
Payment Date”). Executive shall be a “specified employee” for the 12-month
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period beginning on the first day of the fourth month following each “Identification
Date” if Executive is a “key employee” (as defined in Section 416(i) of
the Code without regard to Section 416(i)(5) thereof) of Employer at
any time during the 12-month period ending on the Identification Date. For
purposes of this Agreement, the Identification Date shall be December 31. Receipt
of the Severance Payment shall be subject to execution of a separation
agreement and general release (the terms of which shall be consistent with this
Agreement) in a form reasonably satisfactory to Employer.
6.02 Stock
Options Upon Termination. In the event Executive’s employment hereunder is
terminated by Employer pursuant to Section 5.01 or by Executive pursuant
to Section 5.03, (a) the stock options scheduled to vest pursuant to
Sections 4.05(a) and 4.05(b) on the next anniversary date following
the date of termination of Executive’s employment, which number of shares shall
be prorated based on the date of termination of Executive’s employment, shall
immediately vest, and (b) Executive shall have a period of three months
during which any vested options held by Executive may be exercised (at the
conclusion of which period any unexercised options shall permanently expire). In
the event that Executive’s employment is terminated by Employer pursuant to Section 5.02
or Executive voluntarily terminates his employment for any reason other than “Good
Reason,” (a) all stock options previously granted to Executive that have
not yet vested shall be forfeited, and (b) Executive shall have a period
of three months during which any vested options held by Executive may be
exercised (at the conclusion of which period any unexercised options shall
permanently expire). In the event that Executive’s employment is terminated by
Employer or Executive for any reason following a
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Change in Control as defined in Section 8, (a) all stock
options previously granted to Executive that have not yet vested shall vest
immediately; and (b) Executive shall have a period of three months during
which any vested options held by Executive may be exercised (at the conclusion
of which period any unexercised options shall permanently expire). In the event that Executive’s employment is
terminated by Employer by reason of Disability pursuant to Section 5.04,
or if Executive dies, (a) all stock options previously granted to
Executive that have not yet vested shall vest immediately, and (b) Executive
(or his estate or personal representative) shall have a period of twelve months
during which any vested options held by Executive may be exercised (at the
conclusion of which period any unexercised options shall permanently expire).
6.03 No Other Termination Compensation.
Executive shall not be entitled to any benefit or compensation following
termination of his employment hereunder, except as set forth in this Section 6
and Section 8.01, if applicable.
SECTION 7
LOCATION
OF EXECUTIVE’S ACTIVITIES
7.01. Principal Place of Business. Executive’s
principal place of business in the performance of his duties and obligations
under this Agreement shall be in the New York metropolitan area, which includes
Secaucus, New Jersey. For so long as Employer’s headquarters are located in the
New York City metropolitan area, Executive’s principal place of business shall
be located at such headquarters.
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7.02. Travel. Notwithstanding
the provisions of Section 7.01, Executive will engage in such travel and
spend time in other places as may be necessary or appropriate in furtherance of
his duties hereunder.
SECTION 8
CHANGE IN
CONTROL
8.01. Effect of Change in Control. If
a Change in Control (as hereinafter defined) shall occur and if Executive is
terminated by Employer or Executive for any reason, all outstanding stock
options under the stock option plan shall immediately vest and Executive shall
be entitled to all the payments in Section 6.01.
As
used in this Agreement, “Change in Control” means the occurrence during the
Term of any of the following events:
(a)
The sale to any purchaser of (i) all
or substantially all of the assets of the Employer or (ii) capital stock
representing more than 50% of the stock of the Employer entitled to vote
generally in the election of directors of the Employer; or
(b) The merger or consolidation of the
Employer with another corporation if, immediately after such merger or
consolidation, less than a majority of the combined voting power of the
then-outstanding securities entitled to vote generally in the election of
directors of the surviving or resulting corporation in such merger or
consolidation is held, directly or indirectly, in the aggregate by the holders
immediately prior to such transaction of the outstanding securities of the
Employer; or
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(c) There is a report filed on Schedule
13D or Schedule 14D-1 (or any successor schedule, form, or report or item
therein), each promulgated pursuant to the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), disclosing that any person (as the term “person”
is used in Section 13(d)(3) or Section 14(d) (2) of
the Exchange Act) has become the beneficial owner (as the term “beneficial
owner” is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of securities representing 50%
or more of the combined voting power of the voting stock of Employer; or
(d) Employer files a report or proxy
statement with the Securities and Exchange Commission pursuant to the Exchange
Act disclosing in response to Form 8-K or Schedule 14A (or any
successor schedule, form, or report or item therein) that a change in control
of Employer has occurred or will occur in the future pursuant to any then
existing contract or transaction.
SECTION 9
EXCLUSIVITY OF SERVICES, CONFIDENTIAL
INFORMATION
AND RESTRICTIVE COVENANTS
9.01. Exclusivity of Services; Use
of Name. During
the Employment Period and continuing through the first anniversary of the date
in which Executive ceases to be an employee of the Company (the “Covenant
Period”), Executive will not:
(a) Promote, participate or engage in any
business on behalf of any Direct Competitor of the Company, whether Executive
is acting as owner, partner, stockholder,
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employee, broker, agent, principal, trustee, corporate officer,
director, consultant or in any other capacity whatsoever; provided, however,
that this will not prevent Executive from holding for investment up to 1% of
any class of stock or other securities quoted or dealt in on a recognized stock
exchange or on Nasdaq. For purposes of this Section, a Direct Competitor of the
Company means (i) any division of The Gap, Inc. or any Person under
common control with The Gap, Inc. that is engaged in the retail sale of
children’s apparel, (ii) any division of The Limited, Inc. or any
Person under common control with The Limited, Inc. that is engaged in the
retail sale of children’s apparel, (iii) Gymboree or Kids R Us or any
Person under common control with Gymboree or Kids R Us, as the case may be, or (iv) any
other Person engaged in the retail sale of children’s apparel.
(b) Directly or indirectly employ (other
than on behalf of the Company), solicit or entice away any director, officer or
employee of the Company or any of its subsidiaries; or
(c) Take any action to interfere, directly or indirectly, with
the goodwill of the Company or any of its subsidiaries, or induce or attempt to
induce any Person doing business with the Company to cease doing business with
the Company; or
(d) Use the name of the Company or its
subsidiaries in the conduct of any business activities (except in furtherance
of the Company’s business) or for Executive’s personal use without the prior
written consent of the Company.
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9.02. Confidential and Proprietary
Information; Work Product; Warranty.
(a) Confidentiality. Executive acknowledges and agrees that
there are certain trade secrets and confidential and proprietary information
(collectively, “Confidential Information”) which have been developed by the
Company and which are used by the Company in its business. Confidential
Information shall include, without limitation:
(i) customer lists and supplier lists; (ii) the details of the
Company’s relationships with its customers, including the financial
relationship with a customer; (iii) the Company’s marketing and
development plans, business plans; and (iv) other information proprietary
to the Company’s business. Executive shall not, at any time during or after his
employment hereunder, use or disclose such Confidential Information, except to
authorized representatives of the Company or as required in the performance of
his duties and responsibilities hereunder. Executive shall return all Company
property, such as computers, software and cell phones, and documents (and any
copies including in machine or human-readable form), to the Company when his
employment terminates. Executive shall not be required to keep confidential any
information, which is or becomes publicly available or is already in his
possession (unless obtained from the Company). Further, Executive shall be free
to use and employ his general skills, know-how and expertise, and to use,
disclose and employ any generalized ideas, concepts, know-how, methods, techniques
or skills, including those gained or learned during the course of the
performance of any services hereunder, so long as he applies such information
without disclosure or use of any Confidential Information. Executive hereby
acknowledges that his employment under this Agreement does not conflict with,
or breach any existing confidentiality, non-competition or other agreement to
which Executive is a party or to which he may be subject.
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(b) Work Product. Executive agrees
that all copyrights, patents, trade secrets or other intellectual property
rights associated with any ideas, concepts, techniques, inventions, processes,
or works of authorship developed or created by him during his employment by the
Company and for a period of 6 months thereafter, that (i) relate, whether
directly or indirectly, to the Company’s actual or anticipated business,
research or development or (ii) are derived from any work performed by
Executive on the Company’s behalf, shall, to the extent possible, be considered
works made for hire within the meaning of the Copyright Act (17 U.S.C. § 101
et. seq.) (the “Work Product”). All Work Product shall be and remain the
property of the Company. To the extent that any such Work Product may not,
under applicable law, be considered works made for hire, Executive hereby
grants, transfers, assigns, conveys and relinquishes, and agrees to grant,
transfer, assign, convey and relinquish from time to time, on an exclusive
basis, all of his right, title and interest in and to the Work Product to the
Company in perpetuity or for the longest period otherwise permitted by law. Consistent
with his recognition of the Company’s absolute ownership of all Work Product,
Executive agrees that he shall (i) not use any Work Product for the
benefit of any party other than the Company and (ii) perform such acts and
execute such documents and instruments as the Company may now or hereafter deem
reasonably necessary or desirable to evidence the transfer of absolute
ownership of all Work Product to the Company; provided, however, if following
ten (10) business days’ written notice from the Company, Executive
refuses, or is unable, due to disability, incapacity, or death, to execute such
documents relating to the Work Product, he hereby appoints any of the Company’s
officers as his
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attorney-in-fact to execute such documents on his behalf. This agency
is coupled with an interest and is irrevocable without the Company’s prior
written consent.
(c) Warranty. Executive represents and warrants
to the Company that (i) there are no claims that would adversely affect
his ability to assign all right, title and interest in and to the Work Product
to the Company; (ii) the Work Product does not violate any patent,
copyright or other proprietary right of any third party; (iii) Executive
has the legal right to grant the Company the assignment of his interest in the
Work Product as set forth in this Agreement; and (iv) he has not brought
and will not bring to his employment hereunder, or use in connection with such
employment, any trade secret, confidential or proprietary information of
another, or computer software, except for software that he has a right to use
for the purpose for which it shall be used, in his employment hereunder.
9.03. Injunctive
Relief. Executive acknowledges that a
breach or threatened breach of any of the terms set forth in this Section 9
shall result in an irreparable and continuing harm to the Company for which
there shall be no adequate remedy at law. The Company shall, without posting a
bond, be entitled to obtain injunctive and other equitable relief, in addition
to any other remedies available to the Company.
9.04. Essential and Independent
Agreements. It is understood by the parties hereto that Executive’s
obligations and the restrictions and remedies set forth in this Section 9
are essential elements of this Agreement and that but for his agreement to
comply with and/or agree to such obligations, restrictions and remedies, the
Company would not have entered into this Agreement or employed him. Executive’s
obligations and the restrictions and remedies set forth in this
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Section 9 are independent agreements and the existence of any
claim or claims by him against the Company under this Agreement or otherwise
will not excuse his breach of any of his obligations or affect the restrictions
and remedies set forth under this Section 9.
9.05. Survival of Terms;
Representations. Obligations under this Section 9 hereof shall remain
in full force and effect notwithstanding the termination of Executive’s employment.
Executive acknowledges that he is sophisticated in business, and that the
restrictions and remedies set forth in this Section 9 do not create an
undue hardship on him and will not prevent him from earning a livelihood. He
further acknowledges that he has had a sufficient period of time within which
to review this Agreement, including this Section 9, with an attorney of
his choice and he has done so to the extent he desired. Executive and the
Company agree that the restrictions and remedies contained in this Section 9
are reasonable and necessary to protect the Company’s legitimate business
interests regardless of the reason for or circumstances giving rise to such
termination and that he and the Company intend that such restrictions and
remedies shall be enforceable to the fullest extent permissible by law. Executive
agrees that given the scope of the Company’s business and the sophistication of
the information highway, any further geographic limitation on such remedies and
restrictions would deny the Company the protection to which it is entitled
hereunder. If it shall be found by a court of competent jurisdiction that any
such restriction or remedy is unenforceable but would be enforceable if some
part thereof were deleted or modified, then such restriction or remedy shall
apply with such modification as shall be necessary to make it enforceable to
the fullest extent permissible under law.
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9.06. Mutual Non-Disparagement. Neither Executive nor senior
executives of Employer will make or authorize any public statement disparaging
the other in its or his business interests and affairs. Notwithstanding the
foregoing, neither party shall be (a) required to make any statement that
it or he believes to be false or inaccurate, or (b) restricted in connection
with any litigation, arbitration or similar proceeding or with respect to its
response to any legal process.
9.07. Other Duties of Employee
During and After Employment Period. Both
during and after the Employment Period, Executive shall, upon reasonable
notice, furnish such information as may be in his possession to, and cooperate
with, the Company as may reasonably be requested by the Company in connection
with any litigation in which the Company is or may be a party.
9.08. Breaches of Provisions. If Executive breaches any of the
provisions of this Section 9 then, and in any such event, in addition to
other remedies available to Employer, Executive shall not be entitled to any
Termination Compensation, including any Termination Compensation made to him
hereunder prior to Employer’s discovery of such breach.
SECTION 10
MISCELLANEOUS
10.01. Notices. Any notice, consent, or authorization required
or permitted to be given pursuant to this Agreement shall be in writing and
sent to the party for or to whom intended, at the address of such party set
forth below, by certified mail, postage paid, or at such
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other address as either party shall designate by notice given to the
other in the manner provided herein.
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If to Employer:
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Attention:
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Steven
Balasiano, Esq.
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Senior Vice
President, General Counsel
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and Chief
Administrative Officer
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The Children’s
Place Retail Stores, Inc.
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915 Secaucus
Road
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Secaucus, NJ
07094
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With Copies to:
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Ezra Dabah
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Chairman/Chief
Executive Officer
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The Children’s
Place Retail Stores, Inc.
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915 Secaucus
Road
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Secaucus, NJ
07094
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If to Executive:
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Neal Goldberg
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The Children’s
Place Retail Stores, Inc.
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915 Secaucus
Road
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Secaucus, NJ
07094
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With Copies to:
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Hollis Gonerka
Bart, Esq.
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McGuire Woods
LLP
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65 E. 55th Street
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New York, NY
10022
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10.02. Taxes. Employer is authorized to
withhold from payments made hereunder to Executive such amounts for income tax,
social security, unemployment compensation and other judgment of Employer to
comply with applicable laws and regulations.
10.03. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed therein.
10.04. Headings. All descriptive headings in this
Agreement are inserted for convenience only and shall be disregarded in
construing or applying any provision of this Agreement. Should any provision of
this Agreement require judicial interpretation, the court interpreting or
construing the same shall not construe the provision against any party by
reason of the rule of interpretation that a document is to be construed
more strictly against the party who prepared the same.
10.05. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement by the other party must be in writing
and shall not operate or be construed as a waiver of any other or subsequent
breach by such other party.
10.06. Assignment. This Agreement is personal in its
nature and the parties shall not, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder; provided,
however, that Employer may assign this Agreement to any of its affiliates or in
connection with the reorganization, merger or sale of Employer or the sale of
substantially
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all the assets of Employer, and the provisions of this Agreement shall
inure to the benefit of, and be binding upon, each successor of Employer ,
whether by merger, consolidation, transfer of all or substantially all of its
assets, or otherwise.
10.07. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.08. Severability. If any provision of this Agreement or
part thereof, is held to be unenforceable, the remainder of such provisions of
this Agreement, as the case may be, shall nevertheless remain in full force and
effect.
10.09. Entire Agreement and
Integration. This Agreement
contains the entire agreement and understanding between Employer and Executive
with respect to the subject matter hereof. Such Agreement supersedes any prior
agreement between the parties relating to the subject matter hereof, including
without limitation the Prior Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.
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Exhibit A
COMPENSATION
1. Base Salary: At the initial rate of $690,000 per year,
payable in equal installments not less frequently than monthly during each year
of the Employment Period. Base Salary shall be subject to annual review by the
Compensation Committee.
2. Performance Bonus: Following each Bonus Period (as
hereinafter defined) and provided that Executive is employed by Employer on the
date of the Performance Bonus payout, Executive shall be entitled to receive a
Performance Bonus based upon the Employer’s performance during such Bonus
Period. The Performance Bonus for each Bonus Period will be payable within 90
days after the last day of such period; provided, however, that in no event
shall such Performance Bonus be paid later than the latest of (i) the 15th day of the third month following Executive’s
first taxable year in which the Bonus Period ends, or (ii) the 15th day of the third month following the end of
Employer’s first taxable year coincident with or next following the last day of
the Bonus Period. The amount of the Performance Bonus for each Bonus Period
will be equal to a product equal to (a) Executive’s annual Base Salary,
times (b) a percentage equal to or greater than 60% as directed by the
Compensation Committee, times (c) the Bonus Percentage (as hereinafter
defined). The following provisions shall apply to determinations relating to
Performance Bonus.
“Bonus Percentage” shall mean, for each Bonus Period,
a percentage for such period that is based upon the Employer’s performance in
accordance with a schedule adopted by the Compensation Committee for all senior
executives prior to commencement of such period or as
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soon thereafter as possible, except that the Bonus
percentage shall not be more than 200% for any Bonus Period. In addition, if
the Annual Management Incentive Bonus Plan
is approved by the stockholders at the Employer’s 2007 annual meeting of
stockholders, then the Bonus Percentage
shall be determined pursuant to the requirements of such plan. If
the Annual Management Incentive Bonus Plan
is not approved by the stockholders at the
Employer’s 2007 annual meeting of stockholders, then the Bonus Percentage shall
be determined in accordance with the procedures adopted by the Compensation
Committee.
“Bonus Period” shall mean each fiscal
year of Employer.
3. Additional
Payments: Employer
shall pay Executive $130,000 on January 31, 2007, January 31, 2008
and January 31, 2009, provided that the Employee is employed by Employer
on each such date.
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