EXECUTION COPY
Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT (the "Agreement") by and between AMF Bowling Inc., a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive"), dated
as of the 28th day of April, 1999 (the "Effective Date").
1. Employment Period. The Company shall employ the Executive, and
the Executive agrees to, and shall, serve the Company, on the terms and
conditions set forth in this Agreement, for the period commencing on the
Effective Date and ending on the third anniversary of the Effective Date (the
"Employment Period"); provided, however, that on the scheduled end of the
Employment Period, and on each anniversary of such date, the Employment Period
shall automatically be extended for a one-year period unless the Company or the
Executive gives notice to the other at least 180 days before an extension is to
take effect that they do not desire the Employment Period to be extended.
2. Position and Duties. (a) Position. During the Employment
Period, the Executive shall be the President and Chief Executive Officer of the
Company with such duties, authority and responsibilities as are reasonably
assigned to him by the Board of Directors of the Company (the "Board")
consistent with his position as President and Chief Executive Officer of the
Company. Such duties and responsibilities may, at the request of the Board,
include serving as an officer or director of certain subsidiaries of the
Company. Upon the Effective Date, the Executive shall be appointed to the Board.
(b) Duties. During the Employment Period, excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
shall devote his full attention and time during normal business hours to the
business and affairs of the Company and shall perform his services primarily at
the Company's headquarters, wherever the Board may from time to time designate
them to be, but in any case, within a 30-mile radius of the Company's current
corporate headquarters in Richmond, Virginia, and to the extent necessary to
discharge the responsibilities reasonably assigned to the Executive under this
Agreement, use the Executive's reasonable best efforts to carry out such
responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Executive to (i) serve on civic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (iii) manage personal investments, so long
as such activities do not compete with and are not provided to or for any entity
that competes with or intends to compete with the Company or any of its
subsidiaries and do not interfere significantly with the performance of the
Executive's responsibilities under this Agreement.
3. Compensation. (a) Base Salary. During the Employment Period,
the Executive shall receive from the Company an annual base salary ("Annual Base
Salary") of $575,000, payable in equal installments at intervals not less
frequent than monthly. The Executive's Annual Base Salary may be increased by
the Board which shall review it annually in January of each year. The
Executive's Annual Base Salary shall not be reduced below $575,000, and the term
Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(b) Annual Bonus. In addition to the Annual Base Salary, for each
calendar year or portion thereof ending during the Employment Period, the
Executive shall be eligible to earn an annual bonus from the Company (the annual
bonus from time to time in effect for the then current year is referred to as
the "Annual Bonus") in an amount equal to 75 percent of the Executive's Annual
Base Salary. 50 percent of the Annual Bonus (the "Discretionary Bonus") shall be
based on discretionary objectives (the "Objectives") set by the Compensation
Committee of the Board (the "Committee") and 50 percent of the Annual Bonus
shall be based on operation and financial targets (the "Targets") set by the
Committee (the "Target Bonus"). The Annual Bonus shall be reduced pro rata for
any year during the Employment Period that is not a full year (based on the
actual number of days of such year included in the Employment Period). The
Objectives and the Targets shall be determined by the Committee (provided, that
the Executive may consult with the Committee prior to its determinations), and
set forth in writing each year prior to the end of the first quarter of the year
to which such Objectives and Targets apply. Each Annual Bonus shall be paid no
later than 30 days after the Company's audited consolidated financial statements
with respect to the year for which the Annual Bonus is awarded are available,
but in no event later than March 31 of the following year. Notwithstanding the
foregoing, the Executive's Annual Bonus for 1999 shall not be less than
$431,250. Nothing herein shall prevent the Committee from awarding the Executive
any additional discretionary bonus that it may deem appropriate.
(c) Signing Bonus. The Executive shall be entitled to a payment
of $500,000, that shall be paid within 30 days following the Effective Date and
that shall be deemed fully earned on the Effective Date.
(d) Relocation Expenses. The Executive shall be entitled to
prompt reimbursement of relocation expenses as set forth in Exhibit A hereto,
plus any losses (after deducting any costs that are not reimbursed by the
Company) incurred by the Executive in the sale of the Executive's house (cost,
including capital improvements, of $850,000) and boat (cost, including capital
improvements, of $210,000); provided, that reimbursement for any losses shall
not exceed $50,000 in the aggregate.
(e) Other Benefits. During the Employment Period: (i) the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, practices, policies and programs of the Company to the same
extent as generally applicable to other senior executives; and (ii) the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in, and shall receive all benefits under, all welfare benefit
plans, practices, policies and programs provided by the Company (including, to
the extent provided, without limitation, medical, prescription, dental,
disability, salary continuance, employee life insurance, group life insurance,
accidental death and travel accident insurance plans and programs) to the same
extent as provided generally to senior executives of the Company; provided,
however, that nothing in this Agreement shall impose on the Company any
obligation to offer to the Executive participation in any stock, stock option,
bonus or other incentive award, plan, practice, policy or program other than the
awards made pursuant to Sections 3(b) or 4 hereof. The Executive shall be
entitled to retain for his own personal use any frequent flyer miles and similar
travel awards obtained with respect to the Executive's travel.
(f) Expenses. The Executive shall be entitled to receive prompt
reimbursement for all reasonable travel and other expenses incurred by the
Executive in carrying out the Executive's duties under this Agreement, provided
that the Executive complies with the policies, practices and procedures of the
Company for submission of expense reports, receipts or similar documentation of
such expenses.
(g) Vacation. The Executive shall be entitled to 4 weeks of paid
vacation for each full year during the Employment Period and a pro rata portion
thereof during each partial year during the Employment Period; provided,
however, that the Executive shall be entitled to 4 weeks of paid vacation for
the year ending December 31, 1999. Up to an aggregate of 2 weeks of unused
vacation may be carried forward to the next year during the Employment Period
and used therein and any unused vacation in excess of 2 weeks shall lapse.
4. Option. (a) Option Grant. The Executive is hereby granted on
the Effective Date an option (the "Option") to purchase 1,000,000 shares of the
Company's common stock, at an exercise price per share equal to "fair market
value" on the date of grant, as defined in the Company's 1998 Stock Incentive
Plan, as amended (the "Plan"). The Executive may make payment on the exercise of
the vested portion of the Option by certified or bank check or such other
instrument as the Company may accept or by "cashless exercise" procedures
established by the Company. Unless sooner exercised or forfeited as provided in
this Agreement, the Option shall expire on the tenth anniversary of the date of
this Agreement. The Option is granted pursuant to the attached Option Agreement
and the Option shall, except as otherwise expressly provided herein, be governed
by the terms of the Plan and Option Agreement. Although the Option is not
granted pursuant to the Plan, the Executive hereby acknowledges receipt of a
copy of the Plan and agrees to be bound by all the terms and provisions thereof
as if the Option had been granted thereunder. Within a reasonable time after the
Effective Date, the Company will register the issuance of the common stock
underlying the Option on Form S-8 (or any successor form) and will use its
reasonable efforts to cause such registration statement to remain effective
until the full exercise or expiration of the Option.
(b) Vesting. The Option shall vest and become exercisable in
installments according to the following schedule:
Term of Employment
Since the Effective Date Vested Percentage
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Effective Date 20 percent
At least 1 year,
but less than 2 years 40 percent
At least 2 years,
but less than 3 years 60 percent
At least 3 years,
but less than 4 years 80 percent
4 years, or more 100 percent
In the event of a Change in Control (as defined in Section 6(d) hereof), any
outstanding and unvested portion of the Option shall immediately vest and become
exercisable.
(c) Treatment of Option Upon Termination of Employment. In the
event of a termination of the Executive's employment by the Company without
Cause (other than Disability) or by the Executive for Good Reason, (i) the
portion of the Option that would have vested during the two-year period
following the Date of Termination shall immediately vest and become exercisable;
(ii) the portion of the Option vested as of the Date of Termination, including
that portion vested pursuant to clause (i) above, shall be exercisable for the
90-day period following the Date of Termination; and (iii) the portion of the
Option not vested as of the Date of Termination, shall be forfeited on the Date
of Termination. In the event of the Executive's death or termination of the
Executive's employment, other than by the Company without Cause or by the
Executive for Good Reason, the Executive (or the Executive's estate or legal
representative): (i) shall forfeit the portion of the Option not vested as of
the Date of Termination; and (ii) shall have 90 days following the Date of
Termination to exercise the vested portion of the Option, if such termination of
employment is for any reason other than the Executive's death (in which event
the exercise period shall be one year) or for Cause. In the event of the
Executive's termination of employment for Cause, the Executive shall forfeit the
unexercised portion of the Option (whether vested or unvested) on the Date of
Termination. The vested portion of the Option not exercised within the specified
periods of time shall be forfeited by the Executive or the Executive's estate or
legal representative.
5. Termination of Employment. (a) Death or Disability. The
Executive's employment under this Agreement shall terminate automatically in the
event of the Executive's death. The Company shall be entitled to terminate the
Executive's employment in the event of the Executive's Disability. "Disability"
means that the Executive has been unable, for a period of (i) 120 consecutive
days or (ii) an aggregate of 180 days in a period of 365 consecutive days, to
perform, with or without reasonable accommodation to the Executive, his
essential duties under this Agreement, as a result of physical or mental illness
or injury. 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 on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), unless the Executive returns to full-time
performance of his duties in accordance with the provisions of Section 2(b)
hereof before the Disability Effective Date. In the event of a dispute as to
whether the Executive has suffered a Disability, the final determination shall
be made by a licensed physician selected by the Board and acceptable to
Executive in the Executive's reasonable judgment.
(b) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason within 90 days following the Executive's actual
knowledge of an event constituting Good Reason. For purposes of this Agreement,
"Good Reason" shall mean, without the Executive's written consent: (i) any
material diminution in the Executive's title, authority, duties or
responsibilities inconsistent with his position as the President and Chief
Executive Officer of the Company (other than as a result of the Executive's
physical or mental incapacity); (ii) any removal of the Executive from any of
the positions set forth in Section 2(a) hereof; (iii) any reduction in the
Executive's Annual Base Salary; (iv) the Company's requiring the Executive to be
based at any office or location other than as provided in Section 2(b) hereof;
or (v) the Company's failure to comply with its material obligations under this
Agreement. The Executive shall provide the Company with written notice of any of
the events set forth in subsections (i) or (v) of this Section 5(b) and the
Company shall have 15 days to cure. The Executive may not terminate employment
for Good Reason as a result of any such event specified in subsections (i) or
(v) of this Section 5(b) if the Company effectuates such cure within the 15-day
period.
(c) Termination by the Company. The Company may terminate the
Executive's employment at any time during the Employment Period with or without
Cause. A termination of the Executive's employment at the end of the Employment
Period by the Company providing the notice described in Section 1 hereof, as the
same may be extended from time to time as provided in Section 1 hereof, shall be
deemed to be a termination of the Executive's employment by the Company without
Cause. For purposes of this Agreement "Cause" means: (i) commission of any act
of fraud or gross negligence by the Executive in the course of his employment
hereunder which, in the case of gross negligence, has a materially adverse
effect on the business or financial condition of the Company; (ii) willful
material misrepresentation at any time by the Executive to the Company; (iii)
voluntary termination of employment by the Executive; (iv) the Executive's
willful failure or refusal to comply with any of his material obligations under
this Agreement or to comply with a reasonable and lawful instruction of the
Board, which in each case continues for a period of 15 days after the
Executive's receipt of a written notice from the Board identifying the
objectionable action or inaction by the Executive; (v) any conviction of, or
plea of guilty or nolo contendere to, any felony, whether of the United States
or any state thereof or any similar foreign law to which the Executive may be
subject; (vi) any willful or grossly negligent failure substantially to comply
with any written rules, regulations, policies or procedures of the Company
furnished to the Executive which, if not complied with, would reasonably be
expected to have a material adverse effect on the business or financial
condition of the Company; or (vii) any willful failure to comply with the
Company's policies regarding ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
(d) Date of Termination. The "Date of Termination" means the date
of the Executive's death, the Disability Effective Date, or the date on which
the termination of the Executive's employment by the Company, or by the
Executive, is effective, as the case may be.
6. Obligations of the Company Upon Termination. (a) By the
Company without Cause (Other than for Death or Disability) or by the Executive
for Good Reason. If the Company terminates the Executive's employment without
Cause (other than due to the Executive's death or Disability), or the Executive
terminates his employment for Good Reason, the Company shall: (x) pay the
amounts described in subparagraph (i) below to the Executive in a lump sum
within 10 days following the Date of Termination; (y) continue payments of the
Executive's Annual Base Salary as described in subparagraph (ii) below; and (z)
continue the benefits described in subparagraph (iii) below throughout the
remainder of the Employment Period and thereafter for a period of 12 months.
(i) The amounts to be paid in a lump sum as described in
subsection (x) above are:
A. The Executive's accrued but unpaid cash compensation
(the "Accrued Obligations"), which shall equal the sum of (1) any
portion of the Executive's Annual Base Salary through the Date of
Termination that has not yet been paid; (2) any compensation
previously deferred by the Executive (together with any accrued
interest or earnings thereon) that has not yet been paid; and (3)
any accrued but unpaid vacation pay; and
B. The Target Bonus and the Discretionary Bonus for the
fiscal year during which the Date of Termination occurs (in lieu
of any pro rata Annual Bonus for such fiscal year).
(ii) The Annual Base Salary shall be continued throughout the
remainder of the Employment Period and thereafter for a period of 12 months and
shall be payable in semi-monthly installments.
(iii) The benefits shall be continued as described in subsection
(z) above and in paragraph (b) below and shall be benefits for the Executive
and/or the Executive's family at least as favorable as those that would have
been provided under Section 3(e)(ii) of this Agreement if the Executive's
employment had continued until 12 months following the end of the Employment
Period; provided, however, that during any period when the Executive is eligible
to receive such benefits under another employer-provided plan, the benefits
provided by the Company under this subparagraph may be made secondary to those
provided under such other plan. For purposes of determining eligibility (but not
the time of commencement of benefits) of the Executive for retiree benefits
under this subparagraph, the Executive shall be deemed to have retired on the
12-month anniversary of the end of the Employment Period.
(b) Death or Disability. If the Executive's employment is
terminated by reason of the Executive's death or Disability, the Company shall
(x) pay the Accrued Obligations to the Executive or the Executive's estate or
legal representative, as applicable, in a lump sum in cash within 10 days after
the Date of Termination; (y) pay to the Executive or the Executive's estate or
legal representative on or before the date that such amounts would have been
payable but for the death or Disability of the Executive, an amount equal to the
pro-rata (based on the number of days employed) Target Bonus and Discretionary
Bonus for the year in which the Date of Termination occurs, provided that the
Objectives and Targets are achieved for such year; and (z) continue the benefits
described in Section 6(a)(iii), to the extent applicable, until the first
anniversary of the Executive's Date of Termination. Thereafter, the Company
shall have no further obligations under this Agreement.
(c) By the Company for Cause or by the Executive without Good
Reason. If the Company terminates the Executive's employment for Cause or if the
Executive terminates his employment without Good Reason, the Company shall pay
the Executive in a lump sum the Accrued Obligations not later than 30 days after
the Date of Termination. Thereafter, the Company shall have no further
obligations under this Agreement.
(d) Effect on Employment of the Executive of a Change in Control
and Certain Stock or Asset Purchasers. In the event of a Change in Control of
the Company or if all or substantially all of the stock or assets of the Company
are sold or otherwise disposed of to a person or entity not affiliated with the
Company, the Executive shall have the right to resign during the Employment
Period, as an officer, director and employee of the Company within nine months
following such occurrence if a "Triggering Event" occurs, and be entitled to
receive, commencing on the date of such termination, the same payments and other
benefits to which the Executive would have been entitled had the Company
terminated the Executive's employment without Cause. For purposes of this
Agreement, "Triggering Event" shall mean a material and adverse alteration in
the Executive's duties, authority, responsibilities, title or compensation
following a Change in Control. "Change in Control" shall have the meaning given
in the Plan, except that for the purposes of this Agreement, the sale of the
Company's operations of bowling centers shall be deemed a "Change in Control".
7. Full Settlement. The Company's obligations to make the
payments provided for in, and otherwise to perform its obligations under, this
Agreement shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action that the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and, except as
specifically provided in Section 6(a)(iii), such amounts shall not be reduced,
regardless of whether the Executive obtains other employment.
8. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or its subsidiaries that
the Executive obtains during the Executive's employment by the Company and that
is not public knowledge or does not become (other than as a result of the
Executive's violation of this Section 8) ("Confidential Information"). The
Executive shall not communicate, divulge or disseminate Confidential Information
at any time during or after the Executive's employment with the Company, except
with the prior written consent of the Company or as otherwise required by law.
9. Noncompetition; Nonsolicitation. (a) Unless the Executive's
employment is terminated by the Company without Cause, during the Employment
Period and during the two-year period thereafter (the "Restriction Period"), the
Executive shall not directly or indirectly participate in or permit his name
directly or indirectly to be used by or become associated with (including as an
advisor, representative, agent, promoter, independent contractor, provider of
personal services or otherwise) any person, corporation, partnership, firm,
association or other enterprise or entity that is, or intends to be, engaged in
any business which is in competition with the "business" of the Company or any
of its subsidiaries in any country in which the Company or any of its
subsidiaries operate, compete or are engaged in such business or at such time
have an intention so to operate, compete or become engaged in such business (a
"Competitor"). For purposes of this Agreement, "business" shall mean bowling
centers, movie theaters and the sale of products relating to bowling. For
purposes of this Agreement, the term "participate" includes any direct or
indirect interest, whether as an officer, director, employee, partner, sole
proprietor, trustee, beneficiary, agent, representative, independent contractor,
consultant, advisor, provider of personal services, creditor, owner (other than
by ownership of less than five percent of the stock of a publicly-held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market).
(b) During the Restriction Period, the Executive shall not,
directly or indirectly, encourage or solicit, or assist any other person or firm
in encouraging or soliciting, any person that from the beginning of the two-year
period preceding such termination of the Executive's employment through the date
of any solicitation or other such action is or was engaged in a business
relationship with the Company or any of its subsidiaries to terminate its
relationship with the Company or any of its subsidiaries or to engage in a
business relationship with a Competitor.
(c) During the Restriction Period, the Executive will not, except
with the prior written consent of the Company, directly or indirectly, induce
any employee of the Company or any of its subsidiaries or Affiliates to
terminate employment with such entity.
(d) Promptly following the expiration of the Employment Period,
the Executive shall return to the Company all property of the Company and its
subsidiaries, and all copies thereof in the Executive's possession or under his
control, including, without limitation, all Confidential Information in whatever
media such Confidential Information is maintained.
(e) The Executive acknowledges and agrees that (i) the
Restriction Period and the covenants and obligations of the Executive in
Sections 8 and 9 are fair and reasonable and the result of negotiation, relate
to special, unique and extraordinary matters, and a violation of any of the
terms of such covenants and obligations will cause the Company and its
subsidiaries irreparable injury for which adequate remedies are not available at
law; and (ii) the Company shall be entitled to an injunction, restraining order
or such other equitable relief as a court of competent jurisdiction may deem
necessary or appropriate to restrain the Executive from violating of any such
covenants and obligations. Such injunctive remedies shall be cumulative and in
addition to any other rights and remedies the Company may have at law or in
equity. If a court holds that such restrictions are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope, or geographical area legally permissible under such circumstances will be
substituted for the period, scope or area stated herein.
10. Successors. (a) This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
11. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, 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.
(b) All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
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▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
or to such other address as either party furnishes to the other in writing in
accordance with this Section 11(b). Notices and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) 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. No later than any date as of which an amount first becomes
includible in the gross income of the Executive for federal income tax purposes
with respect to any stock option, the Executive shall pay to the Company, as
appropriate, or make arrangements reasonably satisfactory to the Company, as
appropriate, regarding the payment of, all federal, state, local and foreign
taxes that are required by applicable laws and regulations to be withheld with
respect to such amount. If the Executive desires to use unrestricted,
unencumbered stock to pay any required withholding taxes, the Company will
cooperate with the Executive in that regard.
(e) 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 any
other provision of or right under this Agreement.
(f) The Executive and the Company each acknowledge that this
Agreement (together with the terms of the Plan and Option Agreement) supersede
all other agreements and understandings, both written and oral, among the
parties concerning the subject matter hereof. The Executive hereby represents
and warrants that he is not a party to any agreement or understanding which
would prohibit him from entering into this Agreement and accepting employment
with the Company or otherwise fulfilling his obligations hereunder.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization of it Boards of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
AMF BOWLING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: CFO
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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EXHIBIT A
RELOCATION EXPENSES
1. Up to three house hunting trips for the Executive and his family for the
purpose of obtaining a new residence and to become familiar with the schooling
situation. Such expenses may include reasonable costs for transportation,
lodging and meals.
2. Reasonable costs of moving of all household goods including packing and
unpacking, insurance at replacement value and temporary storage, if needed. Such
costs may also include the shipping of automobiles. Executive should get a
minimum of two estimates including a Company-recommended mover; however, the
final decision on choice of moving company is the responsibility of the
Executive. Up to 30 days of reasonable temporary housing and living expenses, if
needed. Such expenses may include lodging, meals and telephone calls.
3. Company shall pay all reasonable and customary expenses related to the sale
of existing residence as well as the purchase of a new residence. Such expenses
may also include the utilization of a third party buy-on firm for the sale of
the existing residence, if necessary. Any losses incurred on the sale of the
existing residence and the boat shall be limited to $50,000 in the aggregate, as
set forth in the Agreement. Reasonable and customary expenses may include, but
shall not be limited to, such items as mortgage pre-payment penalty, loan
origination fees, real estate commissions, title search, document preparation
fees, notary fees, attorneys fees, title insurance, recording fees, tax/stamps,
transfer taxes, pest and building inspections.
4. A one-time miscellaneous allowance of one-half month's base salary.
5. Income tax gross-up on the relocation expenses.