EMPLOYMENT AGREEMENT
This Employment Agreement ("the Agreement") is entered into as
of January 1, 1995, by and between TELETECH HOLDINGS, INC., a
Delaware Corporation ("Employer") and JOSEPH D. LIVINGSTON
("Employee").
RECITALS
A. Employer is engaged in the business of providing direct
marketing, teleservices and telemarketing services to its
customers.
B. Pursuant to the terms and conditions of this Agreement,
Employer desires to employ Employee as Senior Vice President,
Chief Operating Officer and an Advisor to the Board of Directors
and Employee desires to be employed as the same.
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt of which is hereby
acknowledged, Employer and Employee hereby agree as follows:
1. TERM OF EMPLOYMENT. Employee accepts full-time employment
with Employer in accordance with the terms and conditions of this
Agreement effective January 1, 1995. The term of employment under
this Agreement shall commence on January 1, 1995 and shall continue
until employment under the Agreement is terminated under the terms
and conditions of this Agreement.
2. EMPLOYMENT AND DUTIES. Until otherwise directed by
Employer at its sole discretion, Employee shall act as Senior Vice
President, Chief Financial Officer and an Advisor to the Board of
Directors.
At all times during effectiveness of this Agreement and until
otherwise advised by Employer at its sole discretion, Employee
shall be subject to the direction and control of Employer's
President and Board of Directors and shall report directly to
Kenneth Tuchman. Employee agrees to perform, in good faith and to
the best of his ability, and in the manner and at times directed by
Employer, all of the services required hereunder and otherwise
required by Employer. Employee further agrees to comply with all
reasonable directions, requests and requirements of the Employer in
connection with his employment.
3. COMPENSATION. Employee shall be paid the compensation set
forth in this paragraph which shall be subject to income tax
withholdings and other normal payroll deductions.
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A. BASE COMPENSATION. The base compensation to be paid
by Employer to Employee for the services to be rendered by him
shall be the sum of $13,333.33 per month (the annualized rate of
$160,000.00 per year) payable in equal bi-weekly installments.
B. PERFORMANCE BONUS PLAN. Employee shall also be paid
commissions in accordance with the Performance Bonus Plan which is
attached hereto as Exhibit A.
From time to time during Employee's employment, Employer
shall in its sole discretion establish or change the variables
applicable to Employee which are necessary for the operation of the
Performance Bonus Plan.
C. PERFORMANCE BONUS PLAN VARIABLES. The initial
Performance Bonus Plan variables which are applicable to Employee
are as follows:
i. PERFORMANCE BONUS BASE: Sixty Thousand Dollars
($60,000.00) for fiscal year 1995.
ii. TOTAL GROSS REVENUE PERFORMANCE TARGET: Sixty
Eight Million Dollars ($68,000,000.00) for fiscal year 1995.
iii. PERFORMANCE TARGET FOR GROSS REVENUES OF THE
CIS, DATA PROCESSING AND TELECOMMUNICATIONS DEPARTMENTS: Five
Million Dollars ($5,000,000.00) for fiscal year 1995.
iv. PERFORMANCE BONUS LOADING FACTOR FOR GROSS
REVENUES OF THE CIS, DATA PROCESSING AND TELECOMMUNICATIONS
DEPARTMENTS: Twenty Five Percent (25%). In the event that the
Actual Gross Revenues for the CIS, Data Processing and
Telecommunication Departments are less than Seventy Five Percent
(75%) of the Performance Target for a particular year, the
Performance Loading Factor for that year shall be Zero Percent
(0%).
v. PERFORMANCE TARGET FOR GROSS REVENUES FROM
TRAINING OPERATION: Three Million Five Hundred Thousand Dollars
($3,500,000.00) for fiscal year 1995.
vi. PERFORMANCE BONUS LOADING FACTOR FOR GROSS
REVENUES FROM TRAINING OPERATIONS: Twenty Five Percent (25%). In
the event that the Actual Gross Revenues from Training Operation
are less than Seventy Five Percent (75%) of the Performance Target
for a particular year, the Performance Loading Factor for that year
shall be Zero Percent (0%).
vii. PERFORMANCE TARGET FOR CONSOLIDATED NET
INCOME: Six Million Eight Hundred Thousand Dollars ($6,800,000.00)
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for fiscal year 1995.
viii. PERFORMANCE BONUS LOADING FACTOR FOR
CONSOLIDATED NET INCOME: Fifty Percent (50%). In the event that
the Actual Consolidated Net Income is less than Seventy Five
Percent (75%) of the Performance Target for a particular year, the
Performance Loading Factor for that year shall be Zero Percent (0%).
4. BENEFITS. Employee shall be entitled to the following
employee benefits during his employment:
A. BUSINESS EXPENSES. Employee shall be reimbursed for
all authorized and approved travel, entertainment and business
expenses reasonably and necessarily incurred and properly accounted
for by Employee on behalf of the Employer.
B. AUTOMOBILE ALLOWANCE. Employee shall be entitled to
an allowance for automobile expenses including but not limited to
gasoline, insurance, repairs and maintenance in the amount of Five
Hundred Dollars ($500.00) per month during Employee's employment.
C. VACATIONS. Employee shall be entitled to paid
vacations in accordance with Employer's policy as set forth in
"TeleTech's Employee Handbook," which shall not be less than Three
(3) weeks per year. Such vacations shall be at times reasonably
agreeable to both Employer and Employee. Any vacation not taken
during the fiscal year in which it accrues shall be automatically
forfeited and may not be carried over from year-to-year. Employee
shall not have the right to be paid for unused vacation upon
termination of employment or otherwise.
D. OTHER BENEFITS. Employee shall be entitled to all
other rights and benefits for which Employee may be eligible under
any group life insurance, 401K benefit plan, medical and/or dental
insurance program or any other employee benefit which Employer
may, at its sole discretion, provide to Employee or its executive
employees generally as are set forth in "TeleTech's Employee
Handbook."
5. STOCK RIGHTS.
A. STOCK PLAN BENEFITS. Employee shall be entitled to
benefits under TeleTech Holdings, Inc. Stock Plan ("Stock Plan")
which are set forth in this Agreement. Such benefits shall be
governed by such Stock Plan in the form that it is ultimately
established and from time-to-time amended and/or modified.
B. SPECIFIC BENEFITS. Subject to the terms and condi-
tions of this Agreement and the Stock Plan, Employee shall be
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entitled to Nonqualified Stock Options exercisable for One Hundred
Fifty Thousand (150,000) shares of Employer's Common Stock under
the Stock Plan benefits. Said Nonqualified Stock Options shall be
exercisable at an Option Price of Six Dollars and Forty Five Cents
($6.45) per share.
C. RESTRICTIONS ON STOCK PLAN BENEFITS. No Stock Plan
benefits shall be issued to Employee unless and until Employer has
determined that such issuance is in compliance with applicable
state and federal securities and other laws and regulations related
thereto. All such Stock Plan benefits shall be subject to such
other restrictions required by the Stock Plan and/or the law
generally.
D. SOLE STOCK OR EQUITY BENEFITS. Except as specifi-
cally provided in this Agreement, Employee has no rights whatsoever
of any nature to any other stock, stock rights, Stock Plan
benefits, profits, debt or equity interests in Employer or any of
its affiliated or related companies.
E. EMPLOYER'S SOLE DISCRETION REGARDING STOCK ETC.
Employee acknowledges and agrees that Employer has the right, at
its sole discretion, to make all decisions regarding its stock,
stock rights, Stock Plan benefits, profits, debt and equity
configuration, including but not limited to what types of stock,
stock rights, Stock Plan benefits, profits, debt and equity
interests to issue, when to issue stock, stock rights, Stock Plan
benefits, profits, debt and equity interests and to whom to issue
stock, stock rights, Stock Plan benefits, profits, debt and equity
interests.
6. EXCLUSIVITY OF SERVICES. During the term hereof, Employ-
ee's services shall be exclusive to Employer during normal working
hours and at such other times as may reasonably be required by
Employer. Employee may not engage in any other business or
investment activities which shall in any manner interfere with his
duties to Employer hereunder or which may be contrary, adverse or
prejudicial to Employer's business or in competition with Employer.
7. EMPLOYMENT AT WILL. Either Employer or Employee may
terminate his employment under this Agreement at any time, with or
without cause or reason or with or without any prior notice. Upon
termination, Employee will only be entitled to unpaid compensation
for services rendered through the date of termination, unpaid
commissions earned on billings through the date of termination,
employee benefits through the date of termination and Stock Plan
benefits subject to the terms of this Agreement and the Stock Plan
through the date of termination.
8. TERMINATION FOR CAUSE. Without in any manner restricting
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the right of Employer to terminate Employee's employment at any
time without cause and without prior notice as set forth in
Paragraph 7 of this Agreement, Employer may terminate Employee for
cause based upon the occurrence of any of the following:
A. Failure of Employee to meet performance levels or
management objectives established by Employer, including without
limitation, any applicable Sales Quota and/or other objectives
expressed or implied by any commission, incentive or bonus
compensation provisions contained in this Agreement.
B. Any actions by Employee relating to Employer which
involve dishonesty, fraud or moral turpitude.
C. Employee's willful failure or refusal to comply with
a directive of any officer of Employer to whom he reports, or a
directive of Employer's Board of Directors.
D. Employee's conviction of a felony.
E. Death of Employee.
F. Employee's inability to perform substantially all of
his duties due to illness, accident or other disability for one or
more periods aggregating Ninety (90) days in any Twelve (12) month
period or for any Sixty (60) consecutive days.
G. Any action or inaction on the part of Employee which
has a substantial adverse effect on Employer or Employer's
reputation.
H. Disclosure or use of trade secrets or confidential
information in violation of this Agreement.
I. Any other material violation of this Agreement by
Employee.
9. NONCOMPETITION AFTER THE TERM OF EMPLOYMENT. Employee
acknowledges that he has been employed as part of the professional,
management and executive staff of Employer whose duties include the
formulation and execution of management policy. In this regard and
in consideration of being permitted access to Trade Secrets of the
Employer, Employee agrees that, for a period of Three (3) years
after the termination of Employee's employment for any reason with
or without cause, Employee shall not:
A. Directly or indirectly, in any capacity, engage or
participate in, or become employed by or render advisory or
consulting or other services in connection with any Prohibited
Business that conducts business in the United States.
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B. Directly or indirectly, in any capacity, make any
financial investment, whether in the form of equity or debt, or own
any interest in any Prohibited Business that conducts business in
the United States.
Notwithstanding the above, however, Employee shall be
entitled to make any investment in any company whose stock is
listed on a national securities exchange or actively traded in the
over-the-counter market and provided that such investment does not
give the Employee Five Percent (5%) or more of the equity ownership
or voting power with respect to such company.
C. For the purpose of this paragraph, a "Prohibited
Business" shall be defined as any business related to inbound or
outbound teleservices, development or maintenance of voice or data
communication, software applications for marketing or market
intelligence purposes, customer communications services or
technological innovation or support for any of the foregoing.
10. TRADE SECRETS. Employee acknowledges that he has been
employed by Employer to occupy a position of trust. In this
regard, Employee agrees to keep confidential all Trade Secrets of
Employer in accordance with the terms of conditions of this
paragraph.
A. For purposes of this Agreement, the term "Trade
Secrets" shall include, but shall not be limited to, all
confidential or proprietary information possessed by Employer that
is encompassed in its records, materials, customer lists and
requirements, processes, formulae, computer programs, operating
systems, software and information, drawings, designs, plans,
financial information, costs pricing information, and all know-how,
technical data, information, concepts or ideas developed or
utilized by Employer, or reasonably related to its business not
previously released to the public by duly authorized representa-
tives of Employer.
B. Employee agrees to regard and preserve as
confidential all Trade Secrets pertaining to Employer's business
that have been or may be obtained by Employee by reason of his
employment. Employee will not, without written authority from
Employer, use for his own benefit or purposes, nor disclose to
others, either during his employment or thereafter (except as
required in the course of her employment with Employer) any Trade
Secret connected with the business of Employer. Employee further
agrees that he will not take or retain or copy any of Employer's
Trade Secrets or other materials utilized by Employer in its
business including but not limited to information, specifications,
drawings, blueprints, computer software, operating systems, know-
how or other documents, computer tapes, discs, storage devices,
pricing information
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relating to customers or technical data.
C. All information, know-how and other things devised or
created by Employee during the term of his employment, solely or
jointly with others which fall within the definition of a Trade
Secret of Employer shall belong solely to Employer. Upon request
of Employer, Employee promises to assign any such thing to Employer
and to assist Employer in obtaining patents, copyrights, trademarks
and/or trade names on any such Trade Secret.
11. INVENTIONS. With respect to Inventions, Employee agrees
as follows:
A. For purposes of this Agreement, the term "Invention"
shall mean any protectable tangible or intangible things, materials
and/or information, including but not limited to new machines,
devices, software, programs, processes, uses, apparatuses, know-
how, designs or compositions of any kind and/or any matter
potentially subject to copyright, trademark or service mark, which
are discovered, conceived, developed, made, produced or improved.
The term "Invention" shall not be limited to the definition of any
invention contained in the patent laws of the United States.
B. Employee agrees that all Inventions made by him
during the term of his employment, solely or jointly with others,
which are made with Employer's equipment, supplies, facilities,
Trade Secrets or which relate to the business of Employer or its
actual or demonstrably anticipated research or development or which
result from any work performed by Employee for Employer, shall
belong to Employer, and Employee promises to assign such Inventions
to Employer. Employee also agrees that Employer shall have the
right to keep such Invention as a Trade Secret if Employer so
chooses.
C. Employee agrees to disclose to Employer in writing
promptly and in confidence all Inventions (whether Employee
considers them protectable or not) which Employee, alone or with
others, conceives or makes, within the scope of this Agreement as
well as all patent, copyright, trademark and/or service mark
applications filed by Employee within one (1) year after termina-
tion of Employee's employment. Employee hereby assigns and agrees
to assign to Employer all of his right, title and interest in and
to any such Inventions and agrees that he shall not disclose any
of such things to others without the express consent of Employer.
D. During his employment and after it terminates and on
request of and at the expense of Employer, Employee shall assist
Employer in obtaining patents, copyrights, trademarks and/or
service marks on all Inventions deemed protectable by Employer in
the United States and in all foreign countries. In this regard,
Employee shall execute all documents and do all things necessary to
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vest Employer, or its nominee, with full title to all such things
and to protect the same against use and/or infringement by others.
E. For purposes to this Agreement, an Invention shall be
deemed to have been made during the period of Employee's employment
if, during such period, the Invention was conceived or first
actually reduced to practice. Employee agrees that any patent,
copyright, trademark or service mark application filed within one
(1) year after termination of his employment shall be presumed to
relate to an Invention made during the term of his employment
unless Employee can sustain his burden of proof to the contrary.
F. Notwithstanding the foregoing, the provisions of this
Paragraph do not apply to any Invention: i) for which no equipment,
supplies, facilities, or Trade Secrets of Employer were used; ii)
which was developed entirely on Employee's own time; and iii) which
does not relate to the business of Employer or to Employer's
actual or demonstrably anticipated research or development or which
does not result from any work performed by Employee for Employer.
12. AUTHORITY TO BIND EMPLOYER TO CONTRACTS. Without the
express written approval of Employer which sets forth the specific
contract at issue, Employee shall not have the right or authority
to enter into or in any manner bind Employer to any contract on
Employer's behalf.
13. STATEMENTS TO THE PRESS, PUBLIC OR MEDIA. Without the
express written approval of Employer which sets forth the specific
occasion and subject matter at issue, Employee shall not have the
right or authority to make any statement to or on behalf of
Employer to the press, public or media. Any unauthorized attempt
to do so by Employee shall be a material breach of this Agreement.
14. EMPLOYMENT RELATIONSHIP ONLY. The relationship between
Employer and Employee is and shall be specifically limited to an
employer/employee relationship. As a result, nothing contained in
this Agreement or relating to any past, present or future
relationship between Employee and Employer (employment or other-
wise) shall be construed as creating any partnership, joint
venture, trustee/beneficiary or other type of fiduciary or business
relationship between the parties.
15. DRAFTING OF AGREEMENT. The parties to this Agreement
hereby acknowledge and agree that it has been jointly negotiated
and drafted by the parties and that it shall not be construed
either for or against either party based upon who drafted any part
of it.
16. SEVERABILITY. If any provisions of this Agreement are
found to be void or unenforceable, such provisions shall be
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enforced to the maximum possible extent permitted by law, and such
provisions shall be deemed severable from the remainder of this
Agreement so that all the other provisions of this Agreement shall
continue to be valid and enforceable.
17. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to all matters,
including but not limited to the employment relationship,
Employee's compensation, commissions and benefits, any entitlement
to stock, stock rights, Stock Plan benefits, profits, debt and
equity interests in Employer or any of its affiliated companies
and/or the termination of Employee's employment.
This Agreement supersedes all prior oral or written under-
standings and agreements relating to its subject matter and all
other business relationships between Employer and/or its affiliated
companies and Employee.
No person or entity has made or has the authority to make any
representations or promises on behalf of any of the parties which
are inconsistent with the representations or promises contained in
this Agreement, and this Agreement has not been executed in
reliance on any representations or promises not set forth herein.
Specifically, no promises, warranties or representations have been
made by anyone on any topic or subject matter related to Employee's
relationship with the Employer or any of its executives or
employees, including but not limited to any promises, warranties or
representations regarding future employment, compensation,
commissions and benefits, any entitlement to stock, stock rights,
Stock Plan benefits, profits, debt and equity interests in Employer
or any of its affiliated companies or regarding the termination of
Employee's employment. In this regard, Employee agrees that no
promises, warranties or representations shall be deemed to be made
in the future unless they are set forth in writing and signed by an
authorized representative of Employer.
This Agreement may be modified only by a written instrument
executed by the parties, which is designated as an amendment to
this Agreement.
18. GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of
Colorado.
19. INJUNCTIVE RELIEF. Employee acknowledges that damages
would be an inadequate remedy for his breach of any of the provi-
sions of Paragragh 10, 11 and 12 of this Agreement, and that his
breach of any of such provisions will result in immeasurable and
irreparable harm to Employer. Therefore, in addition to any other
remedy to which Employer may be entitled by reason of Employee's
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breach of any such provision, Employer shall be entitled to seek
and obtain temporary, preliminary and permanent injunctive relief
from any court of competent jurisdiction restraining Employee from
committing or continuing any breach of the provisions of any such
Paragraph.
20. REMEDIES. The remedies herein provided shall be deemed
to be cumulative and the exercise of one such remedy shall not
preclude the exercise of any other remedy based upon any particular
occurrence or contingency, nor shall the specification of remedies
herein exclude any rights or remedies at law or in equity which may
be available related to this Agreement or otherwise, including any
rights to damages or injunctive relief. It is specifically agreed
that Employer may recover by appropriate action, or may withhold
from any compensation payable to Employee hereunder, the amount of
actual damage caused to Employer by failure, refusal or neglect of
Employee to keep and perform all of the covenants and warranties
herein contained.
21. NOTICES. All notices and demands of any kind which
either Party hereto may require or desire to serve upon any other
Party to this Agreement shall be in writing and served upon the
other Party by personal service, whereupon service of said notice
shall be deemed complete, or by mailing a copy thereof by certified
mail or registered mail, postage prepaid with return receipt, to
the addresses set forth below:
To Employer: TeleTech Holdings, Inc.
1700 Lincoln Street, 14th Floor
Denver, Colorado 80203
Attention: Ken Tuchman, President
To Employee: Joseph D. Livingston
400-41 South Steele
Hyde Park
Denver, Colorado 80209
With copy to: Berman, Blanchard, Mausner & Kindem
A Law Corporation
4727 Wilshire Boulevard, Suite 500
Los Angeles, California 90010
Attention: Lonnie C. Blanchard III
In case of service by mail, it shall be deemed complete on the
day of actual delivery, as shown by the addressee's registered or
certified mail receipt, or at the expiration of the third (3rd) day
after the date of mailing, whichever occurs first. The addresses
to which notices or demands may be sent may be changed by written
notice served as hereinabove provided by either Party upon the
other Parties.
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22. SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and bind the Parties hereto, their respective heirs,
executors, administrators, successors, assigns, employees, owners,
officers, directors, subsidiaries, affiliates, predecessors,
agents, attorneys and representatives, and each of them.
Notwithstanding anything contrary stated herein, Employee
shall not have the right to assign any of his obligations to
perform any of the services required of him hereunder.
IN WITNESS WHEREOF, Employer and Employee have executed and
delivered this Agreement as of the date first above written.
EMPLOYER:
TELETECH HOLDINGS, INC.,
a Delaware Corporation
By: /s/ Kenneth D. Tuchman
--------------------------------
EMPLOYEE:
By: /s/ Joseph D. Livingston
---------------------------------
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PERFORMANCE BONUS PLAN
THE PURPOSE
The purpose of this Plan is to align the interests of JOSEPH
D. LIVINGSTON with the corporate objectives of TeleTech. Among
others, TeleTech's objectives are as follows:
* Achievement of targeted company-wide gross revenues.
* Achievement of targeted departmental gross revenues.
* Achievement of targeted company-wide net income.
This Plan and the objectives set forth above may be modified
by Employer from time to time at its sole discretion.
DEFINITIONS
The following definitions shall apply to the Plan:
1. GROSS REVENUES. For purposes of the Plan, "Gross
Revenues" shall mean the following: Consolidated gross revenues
for Employer as determined in accordance with generally accepted
accounting principles, consistently applied ("GAAP").
For purposes of the Plan, Gross Revenues shall not include
"Extraordinary Income."
2. EXTRAORDINARY INCOME. For purposes of the Plan,
"Extraordinary Income" shall mean the following: All unusual,
nonrecurring or non-operating items of revenue or income including
but not limited to the proceeds from settlement of or judgement
received in any litigation or dispute relating to the early
termination or cancellation of client contracts.
3. TOTAL GROSS REVENUE LOADING FACTOR: The "Total Gross
Revenue Loading Factor" shall be calculated as follows: [Actual
Gross Revenue/Performance Target].
4. CONSOLIDATED NET INCOME. For purposes of the Plan,
"Consolidated Net Income" shall mean the following: Consolidated
net income of Employer after all interest, taxes, depreciation and
amortization as determined in accordance with GAAP. Consolidated
Net Income shall also exclude Extraordinary Income.
THE PLAN
The terms and conditions of the Plan are as follows:
1. ANNUAL PERFORMANCE BONUSES. The Employee shall be
entitled to performance bonuses based upon the achievement of the
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goals which are from time to time promoted by the Plan. These
bonuses shall be calculated and paid in the manner set forth in
this Plan. All performance bonuses under the Plan shall be paid by
Employer to Employee within Ninety (90) days after the last day of
the fiscal year at issue.
In this regard, Employee shall be entitled to the arithmetic
sum of the following Annual Performance Bonuses:
A. ANNUAL PERFORMANCE BONUS BASED UPON ACHIEVEMENT OF GROSS
REVENUE TARGET FOR THE CIS, DATA PROCESSING AND
TELECOMMUNICATION DEPARTMENTS. For each fiscal year during
Employee's employment, Employee shall be entitled to receive a
performance bonus based on the achievement of the Gross Revenue
Target for Employer's CIS, Data Processing and Telecommunication
Departments. Such performance bonus shall be calculated as
follows: [(Actual Gross Revenues for the CIS, Data Processing and
Telecommunications Departments/Performance Target) x Performance
Bonus Loading Factor x Total Gross Revenue Loading Factor x
Performance Bonus Base];
B. ANNUAL PERFORMANCE BONUS BASED UPON ACHIEVEMENT OF GROSS
REVENUE TARGET FOR TRAINING OPERATIONS. For each fiscal year
during Employee's employment, Employee shall be entitled to
receive a performance bonus based on the achievement of the Gross
Revenue Target for Training Operations. Such performance bonus
shall be calculated as follows: [(Actual Gross Revenues directly
attributable to Training Operations/Performance Target) x
Performance Bonus Loading Factor x Total Gross Revenue Loading
Factor x Performance Bonus Base]; and
C. ANNUAL PERFORMANCE BONUS BASED UPON ACHIEVEMENT OF
CONSOLIDATED NET INCOME TARGET. For each fiscal year during
Employee's employment, Employee shall be entitled to receive a
performance bonus based on the achievement of the Consolidated Net
Income Target. Such performance bonus shall be calculated as
follows: [(Actual Consolidated Net Income/Performance Target) x
Performance Bonus Loading Factor x Total Gross Revenue Loading
Factor x Performance Bonus Base].
2. ANNUAL DISCRETIONARY BONUSES. In the event that none of
the targets necessary for Employee to be paid any Annual
Performance Bonuses has been met during any particular fiscal year,
Employer may pay to Employee a discretionary bonus at its sole
discretion.
3. OVERRIDE OF ANNUAL PERFORMANCE BONUS CALCULATION.
Subject to the Annual Performance Bonus Limitation, in the event
that Actual Consolidated Net Income for any particular fiscal year
exceeds the Consolidated Net Income Target, Employee shall be paid
as his/her Annual Performance Bonuses the greater of the following
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two amounts:
A. The Annual Performance Bonuses pursuant to the
calculations set forth in Paragraph 1 of the Plan; or
B. 100% of Performance Bonus Base.
4. BONUS ADJUSTMENT. At any time after the payment of any
bonus under the Plan, Employer may at its sole discretion audit
and/or recalculate bonuses and determine if bonuses have been
underpaid or overpaid. In the event that it is determined that
bonuses have been underpaid for any reason under the terms and
conditions of the Plan, Employer shall pay to Employee in
accordance with the terms and conditions of the Plan the amount of
any such underpaid bonuses. In the event that it is determined that
bonuses have been overpaid for any reason under the terms and
conditions of the Plan, Employee shall pay to Employer the amount
of any such overpaid bonuses and/or Employer shall have the right
at its sole discretion to deduct such overpaid bonuses from future
compensation and bonuses due to Employee. Payment of any amount of
bonuses by Employer or any other action or inaction of the Employer
shall not constitute a waiver of any right whatsoever to seek reim-
bursement from Employee of any amount of overpaid bonuses.
5. TERMINATION OF EMPLOYMENT. Employee shall not be entitled
to bonuses for any period after the termination of Employee's
employment regardless of the reason for termination. With respect
to the termination of the right to receive such bonuses, Employee
acknowledges and agrees that the termination of such right is fair
and reasonable and justified by the fact that, after Employee's
employment is terminated, he/she will not perform services which
are necessary to achieve the targets and objectives at issue.
6. EMPLOYER'S RIGHT TO REJECT ANY CONTRACT. The Employer
shall at its sole discretion have the right to refuse to enter
into, reject, terminate, modify or compromise any contract with any
prospective, existing or past customer. In the event that Employer
refuses to enter into, rejects, terminates, modifies or compromises
any such contract, Employee shall not have and hereby waives the
right to claim bonuses on any amount not actually collected by
Employer on any such contract.
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