Cali,
Here is the details of the bonus.
E. Engagement Bonus. The Executive shall be entitled to receive a
one-time engagement bonus in recognition of his execution of this Agreement and
his resignation from IBM prior to March 31, 1998. The engagement bonus shall be
payable, at the election of the Executive, between January 5, 1998 and April 5,
1998, and shall be equal to the sum of (i) $1,050,000, plus (ii) the
appreciation in the value of the Executive's IBM options (the "IBM Option
Appreciation"). The IBM Option Appreciation shall be equal to twelve thousand
(12,000) multiplied by the excess of the fair market value of a share of IBM
stock at the close of business on January 5, 1998 over $62. The engagement bonus
shall be payable through the issuance of up to one hundred thousand (100,000)
shares of restricted Employer common stock, with the restrictions lapsing in
five (5) equal annual installments of up to 20,000 shares each on
January 5, 1998 and the following four annual anniversaries thereof or, if
earlier, upon the Executive's termination of employment under Paragraphs 7A, 7C
or 7E. Any amount owed hereunder which exceeds the value of such shares of
Employer common stock (as determined on the date of payment) shall be payable in
a single cash payment on or before April 5, 1998.
Thus, there is a signing bonus $1.050 mill and $533,250 worth of SSAX stock (IBM closed at 106 7/16 on Jan 5, 1998). The signing bonus is much like in sports but what a bargain. It costs the company $1,583,250 to get an experienced CEO who specializes in Marketing and International Sales. He is already up to speed in understanding SSAX's products and has connections at IBM to keep that relationship firm and growing. Right now we can't tell when he gets paid but Stuek will be worth every cent IMHO. He certainly didn't change jobs for this paltry sum. I believe he wants to grow the company because it is a big chance for him in a personality sense. CEO is a position of power and puts him in the limelight. He might even get on CNBC and get to meet Maria. The takeover was in Q2 and is accretive so I don't believe that will be a negative. The $400,000 left in the Bain settlement must be expensed. All in all, they had over $5mill in special charges in Q4 so Q1 will be better. I want to congratulate you on your thoroughness. I missed some of these details. Keep up the good work AND please keep us informed. Also I expect earnings of $.06-.08 for this quarter based on what other ERP firms did in their Q4's and the fact that some of these expenses are less.
Karl |
