1
10.02
EMPLOYMENT AGREEMENT
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AGREEMENT by and among Medicine Shoppe International, Inc., a
Delaware corporation (the "Company"), David A. Abrahamson (the "Executive"), and
Cardinal Health, Inc. ("Cardinal"), dated as of the 26th day of August, 1995.
WHEREAS, the Company intends to enter into an Agreement and
Plan of Merger (the "Merger Agreement") pursuant to which a subsidiary of
Cardinal will merge with and into the Company, with the Company as the surviving
corporation, and the Company will become a wholly owned subsidiary of Cardinal
(the "Transaction") (and references herein to the "Company" refer to the Company
both before and after the Transaction); and
WHEREAS, it is a condition to the execution of the Merger
Agreement that the Company enter into an employment agreement with the Executive
and a condition to the consummation of the Transaction that such agreement be in
full force and effect; and
WHEREAS, Cardinal desires to obtain for itself, through its
future ownership of the Company, the benefit of the Executive's services as set
forth in this Agreement; and
WHEREAS, the Company and the Executive desire to
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set forth in a written agreement the terms and conditions under which the
Executive will continue to be employed by the Company after the consummation of
the Transaction;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT PERIOD. Upon the consummation of the
Transaction, the Company shall employ the Executive, and the Executive hereby
accepts such employment, on the terms and conditions set forth in this
Agreement, for the period commencing on the Effective Time (as that term is
defined in the Merger Agreement) and ending on the fifth anniversary of the
Effective Time (the "Employment Period").
2. POSITION AND DUTIES. (a) During the Employment Period, the
Executive shall be employed by the Company as its President and Chief Executive
Officer with the responsibilities customarily assigned to such positions and
with such other responsibilities of an executive nature as may be determined
from time to time by the Company's Board of Directors (the "Board") or its
lawfully designated representative.
(b) During the Employment Period, the Executive shall devote
his full time and attention to the business and affairs of the Company, and
shall use his best efforts to
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promote and establish the business of the Company and to carry out faithfully
and efficiently the responsibilities assigned to him under this Agreement. It
shall not be considered a violation of the foregoing for the Executive to (i)
serve on corporate boards with the approval of Cardinal, (ii) serve on civic or
charitable boards or committees, (iii) deliver lectures or fulfill speaking
engagements and (iv) manage personal investments, so long as such activities do
not interfere with the performance of the Executive's responsibilities under
this Agreement.
(c) During the Employment Period, the Executive's services
shall be performed primarily at the Company's current office location or any
other location within 30 miles thereof specified by the Board from time to time.
Travel in connection with the business of the Company may be reasonably
requested by the Board or its lawfully designated representative from time to
time.
3. COMPENSATION. (a) BASE SALARY. During the Employment
Period, the Company shall pay the Executive an annual base salary (the "Annual
Base Salary") in an amount not less than $256,520, payable in accordance with
the Company's payroll practices for management personnel, as in effect from time
to time (but not less frequently than
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monthly). During the Employment Period, the Annual Base Salary shall be reviewed
for possible increase at least annually in accordance with Cardinal's normal
payroll practices for management personnel. Any increase in the Annual Base
Salary shall not limit, expand or reduce any other obligation of the Company
under this Agreement.
(b) ANNUAL BONUS. In addition to the Annual Base Salary,
during the Employment Period the Executive shall be eligible to receive annual
bonuses (each, regardless of whether for a 12-month period or a different
period, an "Annual Bonus") pursuant to this Section 3(b). For the period ending
September 30, 1996, the Annual Bonus shall be determined in accordance with
Exhibit A hereto. Thereafter during the Employment Period, the Annual Bonus
shall be determined pursuant to Cardinal's standard Management Incentive Plan as
in effect from time to time, or any successor thereto (the "MIP"), with an MIP
potential equal to 60 percent of the Annual Base Salary; PROVIDED, that the
first Annual Bonus for which the Executive shall be eligible under the MIP shall
be for the period October 1, 1996 through June 30, 1997, and for that period he
shall receive an Annual Bonus equal to 75 percent of the amount he would
otherwise have received, had he participated in the MIP for a full period of
twelve months. Notwithstanding the
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foregoing, if the President of Cardinal and the Executive mutually agree that it
would be preferable to do so, (i) the terms of the Annual Bonus for the period
ending September 30, 1996 may be amended, including without limitation by
shortening the performance period and/or determining the amount thereof in a
manner differing from that set forth on Exhibit A hereto, and/or (ii) the
Executive's transition to the MIP may occur sooner than October 1, 1996.
(c) OTHER BENEFITS. During the Employment Period, the
Executive shall be entitled to participate in the group health, life, disability
insurance, retirement savings and other employee benefit plans (collectively,
"Group Plans") generally offered to the Company's employees in accordance with
the standard terms and conditions of such plans as in effect from time to time,
which plans shall be substantially equivalent in the aggregate to either (A) the
Company's Group Plans as in effect on the date of this Agreement or (B) the
Group Plans maintained from time to time by Cardinal and in which the management
personnel of Cardinal generally participate. In addition, the Executive shall be
eligible to participate in Cardinal's Stock Incentive Plan or any successor
thereto (the "Cardinal Stock Plan"), although except as provided in Section 8(d)
hereof, the actual awards and benefits, if any, to be granted to the
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Executive thereunder shall be in the sole discretion of the Compensation and
Personnel Committee of Cardinal's Board of Directors. The Employee shall at all
times comply with Cardinal's policies on option exercises and the selling and
buying of Cardinal stock.
(d) EXPENSES. The Company shall reimburse the Executive for
all reasonable business expenses incurred by the Executive in the performance of
his services hereunder for the Company, which expenses shall be substantiated to
the reasonable satisfaction of the Company, in a manner similar to that
applicable to other management personnel of the Company, and the Executive shall
provide all necessary records to reflect the reasonable business expenses
incurred.
(e) VACATION. During the Employment Period, the Executive
shall be entitled to annual paid vacations as provided in the Company's vacation
policy as in effect prior to the Effective Time, as it may be revised thereafter
from time to time.
(f) CLUB MEMBERSHIP. During the Employment Period, the
Company shall pay the cost of the Executive's membership in the St. Louis Club.
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(g) The Executive shall be entitled to receive any bonus
earned for the fiscal year of the Company ending September 30, 1995 pursuant to
the terms of the Employment Agreement dated as of October 1, 1994, between the
Company and the Executive (the "Prior Agreement"), and the provisions of the
Prior Agreement relating to such bonus shall remain in effect following the
Effective Time to the extent such bonus has not previously been paid to the
Executive.
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. The Company shall be entitled to terminate the
Executive's employment because of the Executive's Disability during the
Employment Period. "Disability" means the illness or disability of the Executive
which prevents or hampers the performance of his obligations hereunder, and
which continues for a consecutive period of one hundred and twenty (120) days or
longer or an aggregate period of one hundred and eighty (180) days or longer, in
either instance during the Employment Period. A termination of the Executive's
employment by the Company for Disability shall be communicated to the Executive
by written notice, and shall be effective upon receipt of such notice by the
Execu-
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tive (the "Disability Effective Date").
(b) BY THE COMPANY. (i) The Company may terminate the
Executive's employment during the Employment Period for Cause or without Cause.
"Cause" shall mean (A) fraud, misappropriation, embezzlement or material
misconduct on the part of the Executive, (B) the Executive's (x) failure to
substantially perform his duties for the Company when and to the extent
requested by the Board or its lawfully designated representative to do so and
(y) failure to correct same within five (5) business days after notice from the
Board or its lawfully designated representative requesting the Executive to do
so, or (C) the Executive's breach of any material provision of this Agreement.
(ii) A termination of the Executive's employment by the
Company without Cause shall be effected by giving the Executive written notice
of the termination.
(c) GOOD REASON. (i) The Executive may terminate
employment for Good Reason or without Good Reason. "Good Reason" means:
(A) the assignment to the Executive of duties
inconsistent in any material respect with Section 2(a) of this
Agreement, other than any such action that is remedied by the
Company within five (5) business days after receipt of notice
thereof from the Executive;
(B) any failure by the Company to comply
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with any provision of Section 3 of this Agreement other than
any such failure that is remedied by the Company within five
(5) business days after receipt of notice thereof from the
Executive; or
(C) any requirement by the Company that the
Executive's services be rendered primarily at a location or
locations not complying with the provisions of Section 2(c) of
this Agreement, other than any such requirement that is
remedied by the Company within five (5) business days after
receipt of notice thereof from the Executive.
(ii) A termination of employment by the Executive for Good
Reason shall be effectuated by giving the Company written notice ("Notice of
Termination for Good Reason") of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relies. A
termination of employment by the Executive for Good Reason shall be effective on
the tenth business day following the date when the Notice of Termination for
Good Reason is given, unless the notice sets forth a later date (which date
shall in no event be later than 30 days after the notice is given); PROVIDED,
that such a termination of employment shall not become effective if the Company
shall have substantially corrected the circumstance giving rise to the Notice of
Termination within such 30-day period.
(iii) A termination of the Executive's employment
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by the Executive without Good Reason shall be effected by giving the Company
written notice of the termination.
(d) DATE OF TERMINATION. The "Date of Termination" means the
date of the Executive's death, the Disability Effective Date, the date on which
the termination of the Executive's employment by the Company for Cause or by the
Executive for Good Reason is effective, the date on which the Company gives the
Executive notice of a termination of employment without Cause, or the date on
which the Executive gives the Company notice of a termination of employment
without Good Reason, as the case may be.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION. (a) DEATH,
DISABILITY, CAUSE; WITHOUT GOOD REASON. If, during the Employment Period, the
Executive's employment is terminated because of death, Disability, for Cause, or
by the Executive without Good Reason, then except as provided in Section 8, the
Executive shall not be entitled to any compensation provided for under this
Agreement, other than Annual Base Salary through the Termination Date, benefits
under any long-term disability insurance coverage in the case of termination
because of Disability, and (without limiting the provisions of Section 6 hereof)
vested
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benefits, if any, required to be paid or provided by law.
(b) WITHOUT CAUSE; GOOD REASON. If, during the Employment
Period, the Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason, the Executive shall not be entitled to any
compensation provided for under this Agreement except as set forth in the
following sentence. The Company (i) shall continue to pay the Executive his
Annual Base Salary, at the rate then in effect, for and with respect to the
unexpired portion of the Employment Period (in the same manner as specified in
Section 3(a) hereof) and (ii) shall continue the group health benefits provided
for in Section 3(c) during the unexpired portion of the Employment Period (in
the same manner as specified therein); PROVIDED, that (x) if any such benefits
cannot be provided to nonemployees under the terms of the applicable plans or
applicable law, the Company shall provide the Executive with substitute benefits
that are comparable and equal in value to such benefits, and (y) during any
period when the Executive is eligible to receive any such benefits under another
employer-provided plan, the benefits provided by the Company under this
paragraph may be made secondary to those provided under such other plan.
6. NON-EXCLUSIVITY OF RIGHTS. Nothing in this
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Agreement shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the Company,
Cardinal or any of the Affiliated Companies for which the Executive may qualify,
nor, subject to Section 10(f), shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company, Cardinal or any of the Affiliated Companies. Vested
benefits and other amounts that the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or agreement
with, the Company, Cardinal or any of the Affiliated Companies on or after the
Date of Termination shall be payable in accordance with such plan, policy,
practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
7. MITIGATION. Following any termination of the Executive's
employment that gives rise to a right to payments and benefits described in
Section 5(b) above, the Executive shall use reasonable efforts to obtain other
employment or self-employment, of a nature comparable to the employment provided
for in this Agreement, and if the Executive does engage in any other employment
or self-employment, the payments of Annual Base Salary that the
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Company is obligated to make pursuant to Section 5(b) above shall be reduced
(but not below zero) by the amount of the Executive's remuneration from such
other employment or self-employment, as and when earned or vested (regardless of
when paid or received).
8. CONFIDENTIAL INFORMATION; NO-RAID; NONCOMPETITION;
INVENTIONS. (a) The Executive shall hold in a fiduciary capacity for the benefit
of the Company, Cardinal and the Affiliated Companies all secret or confidential
information, knowledge or data relating to the Company, Cardinal or any of the
Affiliated Companies and their respective businesses (including, without
limitation, any proprietary and not publicly available information concerning
any processes, methods, trade secrets, research, secret data, costs or names of
users or purchasers of their respective products or services, business methods,
operating procedures or programs or methods of promotion and sale) that the
Executive obtains during the Executive's employment by the Company, Cardinal or
any of the Affiliated Companies and that is not public knowledge (other than as
a result of the Executive's violation of this of Section 8(a)) ("Confidential
Information"). For the purposes of this Section 8(a), information shall not be
deemed to be publicly available merely because it is embraced by general
disclosures or
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because individual features or combinations thereof are publicly available. The
Executive shall not communicate, divulge or disseminate Confidential Information
at any time during or after the Executive's employment with the Company,
Cardinal or any of the Affiliated Companies, except with the prior written
consent of the Company, Cardinal or such Affiliated Company, as applicable, or
as otherwise required by law or legal process. All records, files, memoranda,
reports, customer lists, drawings, plans, documents and the like that the
Executive uses, prepares or comes into contact with during the course of his
employment shall remain the sole property of the Company, Cardinal and/or one or
more of the Affiliated Companies, as applicable, and shall be turned over to the
Company, Cardinal or such Affiliated Company, as applicable, upon termination of
the Executive's employment.
(b) The Executive agrees that he will not, at any time during
or after the Executive's employment with the Company, Cardinal or any of the
Affiliated Companies, without the prior written consent of the Company, Cardinal
or such Affiliated Company, as applicable, directly or indirectly employ, or
solicit the employment of (whether as an employee, officer, director, agent,
consultant or independent contractor), any person who was or is at any
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time during the previous twelve (12) months an employee, representative, officer
or director of the Company, Cardinal or any of the Affiliated Companies (except
for such employment by the Company, Cardinal or any of the Affiliated
Companies).
(c) During the Noncompetition Period (as defined below), the
Executive shall not, without the prior written consent of the Board, engage in
or become associated with a Competitive Activity. For purposes of this Section
8(c): (i) the "Noncompetition Period" means the Initial Noncompetition Period
(as defined in clause (ii) of this sentence) plus the applicable Additional
Noncompetition Period (as defined in clause (iii) of this sentence); (ii) the
"Initial Noncompetition Period" means the period during which the Executive is
employed by the Company, Cardinal, or any of the Affiliated Companies; (iii) the
Additional Noncompetition Period means (A) in the case of a termination of the
Executive's employment by the Company for Cause, the period beginning on the
last day of the Initial Noncompetition Period and ending on the third
anniversary thereof, (B) in the case of a termination of the Executive's
employment by the Executive without Good Reason, the period beginning on the
last day of the Initial Noncompetition Period and ending on the fifth
anniversary thereof, (C) in
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the case of a termination of the Executive's employment by the Company without
Cause or by the Executive for Good Reason, the period beginning on the last day
of the Initial Noncompetition Period and ending on the later of the first
anniversary thereof or the first anniversary of the first date on which the
Executive no longer is receiving any compensation or benefits pursuant to
Section 5(b) hereof, plus any subsequent period during which the Executive
receives any compensation or benefits pursuant to Section 5(b) hereof, and (D)
in the case of any other termination of the Executive's employment, the period
beginning on the last day of the Initial Noncompetition Period and ending on the
later of the first anniversary thereof or the sixth anniversary of the Effective
Time; (iv) a "Competitive Activity" means any business or other endeavor, in the
United States or Canada or any other country, of a kind then being conducted by
the Company, Cardinal or any of the Affiliated Companies in such country; and
(v) the Executive shall be considered to have become "associated with a
Competitive Activity" if he becomes directly or indirectly involved as an owner,
principal, employee, officer, director, independent contractor, representative,
stockholder, financial backer, agent, partner, advisor, lender, or in any other
individual or representative capacity with any indi-
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vidual, partnership, corporation or other organization that is engaged in a
Competitive Activity. Notwithstanding the foregoing, the Executive may make and
retain investments during the Employment Period in not more than five percent
of the equity of any entity engaged in a Competitive Activity, if such equity
is listed on a national securities exchange or regularly traded in an
over-the-counter market. Should this provision be unenforceable in any
jurisdiction because it is deemed too broad, as to time, area, subject matter,
or otherwise, this provision shall be deemed modified to the extent necessary
to be enforceable in such jurisdiction. The parties acknowledge that after the
end of the Initial Noncompetition Period, nothing contained in this Section
8(c) shall prevent the Executive from owning or operating a pharmacy or similar
type of business, or in any way working for a business engaged primarily in
franchising (other than franchising of pharmacies or other businesses in which
the Company, Cardinal or any of the Affiliated Companies is engaged), so long
as such activity is not in competition with the Company, Cardinal or any
of the Affiliated Companies.
(d) In consideration for the Executive's agreeing to be bound
by the provisions of Section 8(c), he shall be
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granted, as of the Effective Time, (i) options (the "Options") to purchase
10,000 shares of common stock of Cardinal (the "Cardinal Stock"), and (ii) 5,000
shares of restricted Cardinal Stock (the "Restricted Stock"), in each case
pursuant to the Cardinal Stock Plan. The Options shall have a per-share exercise
price equal to the last sale price of a share of the Cardinal Stock on the New
York Stock Exchange on the day during which the Effective Time occurs or, if no
such sales take place on such day, on the most recent prior day on which such
sales take place. In addition, the Options shall have a term of ten years from
the Effective Time, shall vest and become exercisable on the third anniversary
of the Effective Time, and shall otherwise be subject to the standard terms and
conditions applicable to option grants under the Cardinal Stock Plan. The
Restricted Stock shall vest and become exercisable on the third anniversary of
the Effective Time, and shall otherwise be subject to the standard terms and
conditions applicable to restricted stock grants under the Cardinal Stock Plan.
(e) All plans, discoveries and improvements, whether
patentable or unpatentable, made or devised by the Executive, whether by himself
or jointly with others, from the date of the Executive's initial employment by
the Company and continuing until the end of the Employment
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Period and any subsequent period when the Executive is employed by the Company,
Cardinal or any of the Affiliated Companies, relating or pertaining in any way
to his employment with or the business of the Company, Cardinal or any of the
Affiliated Companies, shall be promptly disclosed in writing to the Board and
are hereby transferred to and shall redound to the benefit of the Company, and
shall become and remain its sole and exclusive property. The Executive agrees to
execute any assignments to the Company or its nominee, of his entire right,
title and interest in and to any such discoveries and improvements and to
execute any other instruments and documents requisite or desirable in applying
for and obtaining patents or copyrights, at the expense of the Company, with
respect thereto in the United States and in all foreign countries, that may be
required by the Company. The Executive further agrees, during and after the
Employment Period, to cooperate to the extent and in the manner required by the
Company, in the prosecution or defense of any patent or copyright claims or any
litigation, or other proceeding involving any trade secrets, processes,
discoveries or improvements covered by this Agreement, but all necessary
expenses thereof shall be paid by the Company.
(f) The Executive acknowledges and agrees that the Company's
remedy at law for any breach of the
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Executive's obligations under this Section 8 would be inadequate and agrees and
consents that temporary and permanent injunctive relief may be granted in any
proceeding which may be brought to enforce any provision of such Section without
the necessity of proof of actual damage. With respect to any provision of this
Section 8 finally determined by a court of competent jurisdiction to be
unenforceable, the Executive and the Company hereby agree that such court shall
have jurisdiction to reform this Agreement or any provision hereof so that it is
enforceable to the maximum extent permitted by law, and the parties agree to
abide by such court's determination.
9. SUCCESSORS. (a) This Agreement is personal to the
Executive, and he may not assign any interest herein in any manner whatsoever.
Any purported assignment by the Executive shall be void.
(b) In addition to assignments by operation of law, the
Company shall have the right to assign this Agreement to any person, firm or
corporation, controlling, controlled by or under common control with the Company
(including without limitation Cardinal or any of the Affiliated Companies), or
acquiring substantially all of its assets, but such assignment shall not release
the Company from its
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obligations under this Agreement.
10. MISCELLANEOUS. (a) The provisions of Sections 5, 6, 7, 8,
9 and 10 of this Agreement shall survive any expiration or termination of this
Agreement.
(b) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified except by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
(c) All notices, requests, consents and other communications
required or provided under this Agreement shall be in writing and shall be
deemed sufficient if delivered by facsimile, overnight courier, or certified or
registered mail, return receipt requested, postage prepaid, and shall be
effective upon delivery as follows:
IF TO THE EXECUTIVE:
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David A. Abrahamson
200 S. Brentwood Boulevard
Apartment 21A
St. Louis, Missouri 63105
Facsimile:
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IF TO THE COMPANY:
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Medicine Shoppe International, Inc.
101 S. Hanley Road, Suite 1600
St. Louis, Missouri 63105
Attention: Assistant Secretary
Facsimile:
(with a copy to Cardinal)
IF TO CARDINAL:
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Cardinal Health, Inc.
655 Metro Place South, Suite 925
Dublin, Ohio 43017
Attention: General Counsel
Facsimile: (614) 761-8919
Either party may change the address and/or facsimile number to which notices are
to be sent to that party by giving written notice of such change of address to
the other party in the same manner above provided for giving notice.
(d) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective, but only to the extent of such prohibition or unenforceability,
without invalidating the other provisions hereof or without affecting the
validity or unforceability of such provision in any other jurisdiction.
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(e) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(f) As of the Effective Time, except as specifically provided
in Section 3(g) hereof, this Agreement shall constitute the entire agreement
between the parties relative to the subject matter contained herein, superceding
all prior agreements, including without limitation the Prior Agreement. No
promises, covenants or representations of any character or nature other than
those expressly stated herein have been made to induce either party to enter
into this Agreement. This Agreement shall not be modified, waived or discharged
except in writing duly signed by each of the parties or their authorized
assignees.
(g) The Executive's or the Company's failure to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement except to the extent any
other party hereto is materially prejudiced by such failure.
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(h) The term "Affiliated Companies" means all companies
controlled by, controlling or under common control with Cardinal, other than the
Company.
11. GUARANTEE. Cardinal hereby irrevocably, absolutely and
unconditionally guarantees the payment by the Company of all compensation that
the Company is obligated to pay to the Executive under Sections 3, 5 and 8 of
this Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and each of the Company and Cardinal has caused this Agreement
to be executed in its name on its behalf, all as of the day and year first above
written.
/S/ DAVID A. ABRAHAMSON
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David A. Abrahamson
MEDICINE SHOPPE INTERNATIONAL, INC.
By /S/ DONALD P. GALLOP
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Donald P. Gallop
Chairman of Executive
Committee
CARDINAL HEALTH, INC.
By/S/ GEORGE H. BENNETT, JR.
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George H. Bennett, Jr.
Executive Vice President
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EXHIBIT A
ANNUAL BONUS
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The Annual Bonus for the fiscal year ending
September 30, 1996 shall be determined as follows:
Percentage Increase of Percentage of Target
"Earnings From Operations" Bonus to be paid
Over Fiscal Year Ending based on Actual Aggregate
September 30, 1995 Earnings Performance Amount of Bonus
------------------ -------------------- ---------------
Below 9% 0 -0-
9% 60% $ 77,076
10% 70% $ 89,922
11% 80% $102,768
12% 90% $115,614
13% 95% $122,037
14% 100% $128,460
15% 110% $141,306
16% 120% $154,152
17% 135% $173,421
For each additional 1% +15% for each $ 19,269
additional
percentage point
The determination of the "Earnings From Operations" shall be
based upon the Company's unaudited financial statements for the period ending
September 30, 1996, prepared in accordance with generally accepted accounting
principles, consistently applied, but excluding such unusual or nonrecurring
items as may be determined by the Board, which determination shall be conclusive
upon the parties hereto.
Any Annual Bonus due hereunder shall be paid by the Company
on or before January 28, 1997.