Delaware
|
54-1817218
|
(State
or other jurisdiction of
incorporation or organization)
|
(I.R.S.
Employer Identification
No.)
|
Large
accelerated filer
o
|
Accelerated
filer
o
|
Non-accelerated
filer
o
(Do not check if a smaller
reporting
company)
|
Smaller
reporting company
x
|
Part
I.
Financial
Information:
|
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4
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5
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6
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8
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26
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39
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39
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40
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40
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41
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41
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41
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42
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42
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43
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·
|
manage
a diverse
product set of solutions in highly
competitive
markets;
|
|
·
|
increase
the
total number of customers utilizing bundled solutions by up-selling
within
our
customer base
and gain new customers;
|
|
·
|
adapt
to meet
changes in markets and competitive
developments;
|
|
·
|
maintain
and
increase advanced professional services by retaining highly
skilled
personnel
and vendor certifications;
|
|
·
|
integrate
with
external IT systems including those of our customers and vendors;
and
|
|
·
|
continue
to
update our software and technology to enhance the features and
functionality of our
products.
|
Three
Months
Ended
September
30,
|
Six
Months
Ended
September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(amounts
in
thousands, except per share data)
|
||||||||||||||||
Sales
of product
and services
|
$ | 179,491 | $ | 189,680 | $ | 345,250 | $ | 396,234 | ||||||||
Sales
of leased
equipment
|
2,182 | 18,218 | 3,447 | 26,804 | ||||||||||||
181,673 | 207,898 | 348,697 | 423,038 | |||||||||||||
Lease
revenues
|
12,211 | 12,470 | 23,836 | 31,616 | ||||||||||||
Fee
and other
income
|
2,974 | 4,633 | 6,611 | 9,013 | ||||||||||||
15,185 | 17,103 | 30,447 | 40,629 | |||||||||||||
TOTAL
REVENUES
|
196,858 | 225,001 | 379,144 | 463,667 | ||||||||||||
COSTS
AND
EXPENSES
|
||||||||||||||||
Cost
of sales,
product and services
|
154,414 | 166,193 | 298,131 | 351,400 | ||||||||||||
Cost
of leased
equipment
|
2,034 | 17,429 | 3,260 | 25,611 | ||||||||||||
156,448 | 183,622 | 301,391 | 377,011 | |||||||||||||
Direct
lease
costs
|
3,833 | 5,870 | 7,627 | 11,893 | ||||||||||||
Professional
and
other fees
|
1,808 | 3,504 | 4,353 | 7,171 | ||||||||||||
Salaries
and
benefits
|
18,672 | 17,208 | 38,136 | 36,902 | ||||||||||||
General
and
administrative expenses
|
3,801 | 3,892 | 7,589 | 8,375 | ||||||||||||
Interest
and
financing costs
|
1,467 | 2,276 | 2,952 | 4,772 | ||||||||||||
29,581 | 32,750 | 60,657 | 69,113 | |||||||||||||
TOTAL
COSTS AND
EXPENSES (1)(2)
|
186,029 | 216,372 | 362,048 | 446,124 | ||||||||||||
EARNINGS
BEFORE
PROVISION FOR INCOME TAXES
|
10,829 | 8,629 | 17,096 | 17,543 | ||||||||||||
PROVISION
FOR
INCOME TAXES
|
4,409 | 3,775 | 6,983 | 7,679 | ||||||||||||
NET
EARNINGS
|
$ | 6,420 | $ | 4,854 | $ | 10,113 | $ | 9,864 | ||||||||
NET
EARNINGS PER COMMON SHARE
—
BASIC
|
$ | 0.77 | $ | 0.59 | $ | 1.22 | $ | 1.20 | ||||||||
NET
EARNINGS PER COMMON SHARE
—
DILUTED
|
$ | 0.74 | $ | 0.59 | $ | 1.18 | $ | 1.18 | ||||||||
WEIGHTED
AVERAGE
SHARES OUTSTANDING
—
BASIC
|
8,299,496 | 8,231,741 | 8,276,650 | 8,231,741 | ||||||||||||
WEIGHTED
AVERAGE
SHARES OUTSTANDING
—
DILUTED
|
8,622,562 | 8,331,044 | 8,597,896 | 8,363,348 |
(1)
|
Includes
amounts to related
parties of $278 thousand and $281 thousand for the three months
ended September 30, 2008 and September 30, 2007,
respectively.
|
(2)
|
Includes
amounts to related
parties of $556 thousand and $524 thousand for the six months
ended September 30, 2008 and September 30, 2007,
respectively.
|
Six
Months Ended September
30,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Cash
Flows From Operating
Activities:
|
||||||||
Net
earnings
|
$ | 10,113 | $ | 9,864 | ||||
Adjustments
to reconcile net
earnings to net cash used in operating activities:
|
||||||||
Depreciation
and
amortization
|
8,091 | 11,969 | ||||||
Reserves
for credit losses and
sales returns
|
650 | 552 | ||||||
Provision
for
inventory allowances and inventory returns
|
559 | (52 | ) | |||||
Impact
of stock-based
compensation
|
61 | 1,532 | ||||||
Excess
tax benefit from exercise
of stock options
|
(107 | ) | - | |||||
Tax
benefit of stock options
exercised
|
140 | - | ||||||
Deferred
taxes
|
- | (251 | ) | |||||
Payments
from lessees directly to
lenders
—
operating
leases
|
(4,861 | ) | (7,636 | ) | ||||
Loss
on disposal of property and
equipment
|
16 | 4 | ||||||
Loss
(gain) on sales or disposal
of operating lease equipment
|
(953 | ) | 919 | |||||
Excess
increase in cash value of
officers life insurance
|
(66 | ) | (31 | ) | ||||
Changes
in:
|
||||||||
Accounts
receivable
—
net
|
(4,336 | ) | (18,123 | ) | ||||
Notes
receivable
|
(1,526 | ) | (1,326 | ) | ||||
Inventories—
net
|
(965 | ) | (922 | ) | ||||
Investment
in direct financing and
sale-type leases —net
|
(11,541 | ) | 5,484 | |||||
Other
assets
|
(4,675 | ) | (2,055 | ) | ||||
Accounts
payable
—
equipment
|
2,302 | 1,611 | ||||||
Accounts
payable
—
trade
|
(311 | ) | 7,329 | |||||
Salaries
and commissions payable,
accrued expenses and other liabilities
|
960 | 4,729 | ||||||
Net
cash provided by (used in)
operating activities
|
(6,449 | ) | 13,597 | |||||
Cash
Flows From Investing
Activities:
|
||||||||
Proceeds
from sale or disposal of
operating lease equipment
|
2,192 | 1,415 | ||||||
Purchases
of operating lease
equipment
|
(2,287 | ) | (6,102 | ) | ||||
Purchases
of property and
equipment
|
(388 | ) | (812 | ) | ||||
Premiums
paid on officers' life
insurance
|
(157 | ) | (159 | ) | ||||
Cash
used in acquisitions, net of
cash acquired
|
(364 | ) | - | |||||
Net
cash used in investing
activities
|
(1,004 | ) | (5,658 | ) |
Six
Months Ended September
30,
|
||||||||
2008
|
2007
|
|||||||
Cash
Flows From Financing
Activities:
|
(in
thousands)
|
|||||||
Borrowings:
|
||||||||
Non-recourse
|
22,747 | 12,422 | ||||||
Repayments:
|
||||||||
Non-recourse
|
(3,474 | ) | (10,976 | ) | ||||
Proceeds
from issuance of capital
stock, net of expenses
|
969 | - | ||||||
Excess
tax benefit from exercise
of stock options
|
107 | - | ||||||
Net
borrowings on floor plan
facility
|
3,951 | 3,063 | ||||||
Net
cash provided by financing
activities
|
24,300 | 4,509 | ||||||
Effect
of Exchange Rate Changes on
Cash
|
(94 | ) | 268 | |||||
Net
Increase in Cash and Cash
Equivalents
|
16,753 | 12,716 | ||||||
Cash
and Cash Equivalents,
Beginning of Period
|
58,423 | 39,680 | ||||||
Cash
and Cash Equivalents, End of
Period
|
$ | 75,176 | $ | 52,396 | ||||
Supplemental
Disclosures of Cash
Flow Information:
|
||||||||
Cash
paid for
interest
|
$ | 267 | $ | 727 | ||||
Cash
paid for income
taxes
|
$ | 5,857 | $ | 4,874 | ||||
Schedule
of Non-cash Investing and
Financing Activities:
|
||||||||
Purchase
of property and equipment
included in accounts payable
|
$ | 52 | $ | 39 | ||||
Purchase
of operating lease
equipment included in accounts payable
|
$ | 21 | $ | 42 | ||||
Principal
payments from lessees
directly to lenders
|
$ | 26,410 | $ | 32,576 |
•
|
the
lease transfers ownership of the property to the lessee by the
end of the
lease term;
|
•
|
the
lease contains a bargain purchase
option;
|
•
|
the
lease term is equal to 75 percent or more of the estimated economic
life
of the leased property; or
|
•
|
the
present value at the beginning of the lease term of the minimum
lease
payments equals or exceeds 90 percent of the excess of the fair
value of
the leased property at the inception of the
lease.
|
•
|
there
is persuasive evidence that
an arrangement exists;
|
•
|
delivery
has
occurred;
|
•
|
no
significant obligations by us
related to services essential to the functionality of the software
remain
with regard to
implementation;
|
•
|
the
sales price is determinable;
and
|
•
|
it
is probable that collection
will occur.
|
|
·
|
Level
1 - observable inputs such as quoted prices in active
markets;
|
|
·
|
Level
2 - inputs other than the quoted prices in active markets that
are
observable either directly or indirectly;
and
|
|
·
|
Level
3 - unobservable inputs in which there is little or no market data,
which
require us to develop our own assumptions.
|
As
of
|
||||||||
September
30,
2008
|
March
31,
2008
|
|||||||
(in
thousands)
|
||||||||
Investment
in direct financing and
sales-type leases—net
|
$ | 113,566 | $ | 124,254 | ||||
Investment
in operating lease
equipment—net
|
27,583 | 33,128 | ||||||
$ | 141,149 | $ | 157,382 |
As
of
|
||||||||
September
30,
2008
|
March
31,
2008
|
|||||||
(in
thousands)
|
||||||||
Minimum
lease
payments
|
$ | 110,077 | $ | 120,224 | ||||
Estimated
unguaranteed residual
value (1)
|
14,751 | 17,831 | ||||||
Initial
direct costs, net of
amortization (2)
|
1,077 | 1,122 | ||||||
Less: Unearned
lease
income
|
(10,939 | ) | (13,568 | ) | ||||
Reserve for credit losses
|
(1,400 | ) | (1,355 | ) | ||||
Investment
in direct financing and
sales-type leases—net
|
$ | 113,566 | $ | 124,254 |
(1)
|
Includes
estimated unguaranteed
residual values of $
1,616
thousand and $2,315 thousand as
of
September
30, 2008 and March 31, 2008,
respectively, for direct financing SFAS No. 140
leases.
|
(2)
|
Initial
direct costs are shown net
of amortization of $
1,226
thousand and $1,536 thousand as
of
September
30, 2008 and March 31, 2008,
respectively.
|
As
of
|
||||||||
September
30,
2008
|
March
31,
2008
|
|||||||
(in
thousands)
|
||||||||
Cost
of equipment under operating
leases
|
$ | 58,298 | $ | 62,311 | ||||
Less: Accumulated
depreciation and amortization
|
(30,715 | ) | (29,183 | ) | ||||
Investment
in operating lease
equipment—net (1)
|
$ | 27,583 | $ | 33,128 |
Accounts
Receivable
|
Lease-Related
Assets
|
Total
|
||||||||||
Balance
April 1,
2007
|
$ | 2,060 | $ | 1,641 | $ | 3,701 | ||||||
Provision
for Bad
Debts
|
55 | (245 | ) | (190 | ) | |||||||
Recoveries
|
40 | - | 40 | |||||||||
Write-offs
and
other
|
(453 | ) | (41 | ) | (494 | ) | ||||||
Balance
March 31,
2008
|
1,702 | 1,355 | 3,057 | |||||||||
Provision
for Bad
Debts
|
85 | 46 | 131 | |||||||||
Recoveries
|
51 | - | 51 | |||||||||
Write-offs
and
other
|
(104 | ) | (1 | ) | (105 | ) | ||||||
Balance
September 30,
2008
|
$ | 1,734 | $ | 1,400 | $ | 3,134 |
As
of
|
||||||||
September
30,
2008
|
March
31,
2008
|
|||||||
(in
thousands)
|
||||||||
Non-recourse
equipment notes
secured by lease payments and leased equipment with interest
rates ranging
from 4.65% to 8.5% for the six months ended September 30, 2008
and 4.02% to 10.77% for year ended March 31, 2008.
|
$ | 86,678 | $ | 93,814 |
Three
months ended September
30,
|
Six
months ended September
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
income available to common
shareholders—basic and diluted
|
$ | 6,420 | $ | 4,854 | $ | 10,113 | $ | 9,864 | ||||||||
Weighted
average shares
outstanding — basic
|
8,299 | 8,232 | 8,277 | 8,232 | ||||||||||||
Effect
of dilutive
shares
|
324 | 99 | 321 | 131 | ||||||||||||
Weighted
average shares
outstanding — diluted
|
$ | 8,623 | $ | 8,331 | $ | 8,598 | $ | 8,363 | ||||||||
Income
per common
share:
|
||||||||||||||||
Basic
|
$ | 0.77 | $ | 0.59 | $ | 1.22 | $ | 1.20 | ||||||||
Diluted
|
$ | 0.74 | $ | 0.59 | $ | 1.18 | $ | 1.18 |
Number
of
Shares
|
Exercise
Price
Range
|
Weighted
Average Exercise
Price
|
Weighted
Average Contractual Life
Remaining (in years)
|
Aggregate
Intrinsic
Value
|
||||||||||||||||
Outstanding,
April 1,
2008
|
1,240,813 | $ | 6.23 - $17.38 | $ | 9.78 | |||||||||||||||
Options
granted
|
- | - | - | |||||||||||||||||
Options
exercised
|
(129,325 | ) | $ | 6.86 - $9.00 | $ | 7.83 | ||||||||||||||
Options
forfeited
|
(24,287 | ) | $ | 6.86 - $17.38 | $ | 11.59 | ||||||||||||||
Outstanding,
September 30,
2008
|
1,087,201 | $ | 6.23 - $17.38 | $ | 9.97 | 2.4 | $ | 2,402,528 | ||||||||||||
Vested
or expected to vest at
September 30, 2008
|
1,087,201 | $ | 9.97 | 2.4 | $ | 2,402,528 | ||||||||||||||
Exercisable,
September 30,
2008
|
1,087,201 | $ | 9.97 | 2.4 | $ | 2,402,528 |
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||
Range
of
Exercise
Prices
|
Options
Outstanding
|
Weighted
Avg. Exercise Price per
Share
|
Weighted
Avg. Contractual Life
Remaining
|
Options
Exercisable
|
Weighted
Average Exercise Price
per Share
|
|||||||||||||||||
$ | 6.23 - $9.00 | 720,201 | $ | 7.67 | 1.8 | 720,201 | $ | 7.67 | ||||||||||||||
$ | 9.01 - $13.50 | 166,500 | $ | 11.51 | 5.0 | 166,500 | $ | 11.51 | ||||||||||||||
$ | 13.51 - $17.38 | 200,500 | $ | 16.95 | 2.6 | 200,500 | $ | 16.95 | ||||||||||||||
$ | 6.23 - $17.38 | 1,087,201 | $ | 9.97 | 2.4 | 1,087,201 | $ | 9.97 |
Shares
|
Weighted
Average Grant-Date Fair
Value
|
|||||||
Nonvested
at April 1,
2008
|
20,000 | $ | 6.13 | |||||
Granted
|
- | |||||||
Vested
|
(20,000 | ) | $ | 6.13 | ||||
Forfeited
|
- | |||||||
Nonvested
at September 30,
2008
|
- |
Number
of
Shares
|
Weighted
Average Grant-Date Fair
Value
|
|||||||
Outstanding,
April 1,
2008
|
||||||||
Shares
granted
|
38,532 | $ | 10.90 | |||||
Shares
forfeited
|
- | |||||||
Outstanding,
September 30,
2008
|
38,532 | $ | 10.90 | |||||
Vested
or expected to vest at
September 30, 2008
|
- | |||||||
Exercisable,
September 30,
2008
|
- |
Three
months ended September 30,
2008
|
Three
months ended September 30,
2007
|
|||||||||||||||||||||||
Financing
Business
Unit
|
Technology
Sales Business
Unit
|
Total
|
Financing
Business
Unit
|
Technology
Sales Business
Unit
|
Total
|
|||||||||||||||||||
Sales
of product and
services
|
$ | 766 | $ | 178,725 | $ | 179,491 | $ | 828 | $ | 188,852 | $ | 189,680 | ||||||||||||
Sales
of leased
equipment
|
2,182 | - | 2,182 | 18,218 | - | 18,218 | ||||||||||||||||||
Lease
revenues
|
12,211 | - | 12,211 | 12,470 | - | 12,470 | ||||||||||||||||||
Fee
and other
income
|
186 | 2,788 | 2,974 | 766 | 3,867 | 4,633 | ||||||||||||||||||
Total
revenues
|
15,345 | 181,513 | 196,858 | 32,282 | 192,719 | 225,001 | ||||||||||||||||||
Cost
of
sales
|
2,470 | 153,978 | 156,448 | 18,015 | 165,607 | 183,622 | ||||||||||||||||||
Direct
lease
costs
|
3,833 | - | 3,833 | 5,870 | - | 5,870 | ||||||||||||||||||
Selling,
general and
administrative expenses
|
3,973 | 20,308 | 24,281 | 3,611 | 20,993 | 24,604 | ||||||||||||||||||
Segment
earnings
|
5,069 | 7,227 | 12,296 | 4,786 | 6,119 | 10,905 | ||||||||||||||||||
Interest
and financing
costs
|
1,442 | 25 | 1,467 | 2,228 | 48 | 2,276 | ||||||||||||||||||
Earnings
before income
taxes
|
$ | 3,627 | $ | 7,202 | $ | 10,829 | $ | 2,558 | $ | 6,071 | $ | 8,629 | ||||||||||||
Assets
|
$ | 231,841 | $ | 158,548 | $ | 390,389 | $ | 261,114 | $ | 153,121 | $ | 414,235 |
Six
months ended September 30,
2008
|
Six
months ended September 30,
2007
|
|||||||||||||||||||||||
Financing
Business
Unit
|
Technology
Sales Business
Unit
|
Total
|
Financing
Business
Unit
|
Technology
Sales Business
Unit
|
Total
|
|||||||||||||||||||
Sales
of product and
services
|
$ | 2,497 | $ | 342,753 | $ | 345,250 | $ | 1,767 | $ | 394,467 | $ | 396,234 | ||||||||||||
Sales
of leased
equipment
|
3,447 | - | 3,447 | 26,804 | - | 26,804 | ||||||||||||||||||
Lease
revenues
|
23,836 | - | 23,836 | 31,616 | - | 31,616 | ||||||||||||||||||
Fee
and other
income
|
293 | 6,318 | 6,611 | 1,018 | 7,995 | 9,013 | ||||||||||||||||||
Total
revenues
|
30,073 | 349,071 | 379,144 | 61,205 | 402,462 | 463,667 | ||||||||||||||||||
Cost
of
sales
|
4,784 | 296,607 | 301,391 | 26,883 | 350,128 | 377,011 | ||||||||||||||||||
Direct
lease
costs
|
7,627 | - | 7,627 | 11,893 | - | 11,893 | ||||||||||||||||||
Selling,
general and
administrative expenses
|
8,158 | 41,920 | 50,078 | 7,715 | 44,733 | 52,448 | ||||||||||||||||||
Segment
earnings
|
9,504 | 10,544 | 20,048 | 14,714 | 7,601 | 22,315 | ||||||||||||||||||
Interest
and financing
costs
|
2,908 | 44 | 2,952 | 4,681 | 91 | 4,772 | ||||||||||||||||||
Earnings
before income
taxes
|
$ | 6,596 | $ | 10,500 | $ | 17,096 | $ | 10,033 | $ | 7,510 | $ | 17,543 | ||||||||||||
Assets
|
$ | 231,841 | $ | 158,548 | $ | 390,389 | $ | 261,114 | $ | 153,121 | $ | 414,235 |
Property
and
equipment—net
|
$
|
64
|
||
Intangible
Assets:
|
||||
Customer
Relationship (estimated
5-year life)
|
200
|
|||
Tradename
(estimated 15-year
life)
|
7
|
|||
Goodwill
|
120
|
|||
Other
current
liabilities
|
(27
|
)
|
||
Net
assets
acquired
|
$
|
364
|
|
Six
Months Ended
September
30,
|
|
||||||
|
2008
|
|
|
2007
|
|
|||
Net
cash
provided
by (
used
)
in operating
activities
|
|
$
|
(6,
499
|
)
|
|
$
|
13,597
|
|
Net
cash used in investing
activities
|
|
|
(1,004
|
)
|
|
|
(
5
,
658
|
)
|
Net
cash provided by financing
activities
|
|
|
24,
300
|
|
|
|
4,509
|
|
Effect
of exchange rate changes on
cash
|
|
|
(94)
|
|
|
|
268
|
|
Net
increase in cash and cash
equivalents
|
|
$
|
16,75
3
|
|
|
$
|
12,716
|
|
Maximum
Credit
Limit
at
September
30,
2008
|
Balance
as
of
September
30,
2008
|
Maximum
Credit
Limit
at
March
31,
2008
|
Balance
as
of
March
31,
2008
|
|||||||||||
$
|
125,000
|
$
|
5
9,586
|
$
|
125,000
|
$
|
55,634
|
Maximum
Credit Limit
at
September
,
2008
|
Balance
as of
September
30,
2008
|
Maximum
Credit Limit
at
March
31,
2008
|
Balance
as of
March
31,
2008
|
|||||||||||
$
|
30,000
|
$
|
-
|
$
|
30,000
|
$
|
-
|
4.
|
The
stockholders approved the Amended and Restated
Certificate of
Incorporation which provides that directors will
be elected to one-year
terms of office starting at the 2009 Annual Meeting
of
Shareholders. The Amended and Restated Certificate of
Incorporation includes other less substantive revisions,
such as updating
the name and address of the Company’s registered agent.
|
|||
For
|
Against
|
Abstain
|
Broker
Non-vote
|
|
7,986,573
|
6,892
|
7,373
|
0
|
|
5.
|
The
stockholders ratified the appointment of Deloitte
& Touche LLP as the
Company’s independent auditors for the fiscal year ending
March 31,
2009.
|
|||
For
|
Against
|
Abstain
|
Broker
Non-vote
|
|
7,642,939
|
29,155
|
328,747
|
0
|
Exhibit
No.
|
Exhibit
Description
|
Amended
and
Restated Certificate of Incorporation of
e
Plus inc., filed
on September 19,
2008.
|
|
Employment
Agreement, effective as of November 1, 2008, between
e
Plus inc. and Kleyton L.
Parkhurst.
|
|
Certification
of
the Chief Executive Officer of
e
Plus
inc. pursuant
to the Securities Exchange Act Rules 13a-14(a) and
15d-14(a).
|
|
Certification
of
the Chief Financial Officer of
e
Plus
inc. pursuant
to the Securities Exchange Act Rules 13a-14(a) and
15d-14(a).
|
|
Certification
of
the Chief Executive Officer and Chief Financial Officer of
e
Plus
inc. pursuant
to 18 U.S.C. §
1350.
|
e
Plus
inc.
|
|
Date:
November
12
,
2008
|
/s/PHILLIP
G.
NORTON
|
By:
Phillip
G.
Norton,
Chairman
of the Board,
|
|
President
and
Chief Executive
Officer
|
Date:
November
12
,
2008
|
/s/
ELAINE
D. MARION
|
By:
Elaine
D.
Marion
|
|
Chief
Financial
Officer
|
EPLUS
INC.
|
||
Signature:
|
/s/
Erica S. Stoecker
|
|
Name:
|
Erica
S. Stoecker
|
|
Title:
|
Secretary
|
|
(a)
|
“Incapacity”
shall mean the Executive’s physical or mental inability to perform his
duties under this Agreement, even with reasonable accommodation,
for more
than twelve (12) weeks, whether or not consecutive, in any twelve-month
period.
|
|
(b)
|
“Employment
Term” shall be the period from November 1, 2008 through and including
October 31, 2009.
|
|
(c)
|
“Expiration
Date” means the date that the Employment Term (as it may have been
extended) expires.
|
|
(d)
|
“Good
Cause” means that the Compensation Committee of the Company’s Board of
Directors (the “Board”) in good faith determines that the
Executive:
|
|
i.
|
Failed
to satisfactorily perform his duties to the Company and such failure
was
not cured within 30 days of the Company providing Executive with
notice of
such failure; or
|
|
ii.
|
Failed
to observe a material policy of the Company that was applicable
to the
Executive and such failure was not cured within 30 days of the
Company
providing Executive with notice of such failure;
or
|
|
iii.
|
Acted
or failed to act in a manner that constitutes gross misconduct,
embezzlement, misappropriation of corporate assets, fraud or negligent
or
willful violations of any laws with which the Company is required
to
comply; or
|
|
iv.
|
Was
convicted of or entered a plea of “guilty” or “no contest” to a
felony;
|
|
vi.
|
Refused
or failed to comply with lawful and reasonable instructions of
the Board
and such refusal or failure was not cured within 30 days of the
Company
providing Executive with notice of such refusal or failure;
or
|
|
vii.
|
Any
other material breach of this Agreement or the duty of
loyalty.
|
|
(e)
|
“Good
Reason” shall mean that within thirty days prior to the Executive
providing the notice to the Company required under Section 6.b.ii
of this
Agreement that any of the following has
occurred:
|
|
i.
|
a
material change in the scope of the Executive’s assigned duties and
responsibilities or the assignment of duties or responsibilities
that are
inconsistent with the Executive’s level of position;
or
|
|
ii.
|
a
reduction by the Company in the Executive’s base salary as set forth
herein as may be increased from time to time or a reduction by
the Company
in the Executive’s or incentive compensation;
or
|
|
iii.
|
the
Company’s requirement that the Executive be based anywhere outside of a
35
miles radius from the Company’s offices in Herndon, Virginia;
or
|
|
iv.
|
the
failure by the Company to continue to provide the Executive with
benefits
substantially similar to those specified in Section 5 of this
Agreement.
|
|
v.
|
a
termination of employment by the Executive for any reason during
the
90-day period immediately following a Change of Control as “Change of
Control” is defined in the 2008 Employee Long-Term Incentive
Plan.
|
|
(f)
|
“Termination
Date” shall mean the date Executive’s termination is effective, as
described in the respective subparts of Section
6.
|
|
a.
|
serve
as the Senior Vice President and Assistant Secretary. The Executive
shall
be responsible for, but not limited to, the following
areas: Mergers and Acquisitions, Credit, Marketing and Treasury
operations (National City relationship) for the
Company;
|
|
b.
|
render
such other services to the Company as requested provided that such
services are consistent with the level of his position;
and
|
|
c.
|
devote
his full business time, attention, skill and energy to the business
of the
Company and shall not engage or prepare to engage in any other
business
activity, whether or not such business activity is pursued for
gain,
profit or other economic or financial advantage. With prior
written approval from the Company, Executive may engage in appropriate
civic, charitable, or educational activities provided that such
activities
do not interfere or conflict with the Executive’s responsibilities or the
Company’s interests. Nothing in this Agreement shall preclude
Executive from acquiring or managing any passive investment he
has in
publicly traded equity securities in companies that are not in
the same
line of business as the Company.
|
|
a.
|
Executive
shall receive a base annual salary of two hundred and fifty thousand
dollars ($250,000), which may be increased from time to
time.
|
|
b.
|
Based
on his MBOs and overall company performance he shall be eligible
to be
considered for an annual bonus of up to 50% of his base salary
then in
effect under the terms and conditions as outlined in the Executive
Incentive Plan
.
|
|
c.
|
He
shall be entitled to participate in and receive other benefits
offered by
the Company to all employees, which may include, but are not limited
to,
vacation, sick, holiday and other leave times, and benefits under
any
life, health, accident, disability, medical, and dental insurance
plans.
|
|
d.
|
He
shall be entitled to be reimbursed for the reasonable and necessary
out-of-pocket expenses, including entertainment, travel and similar
items
and all expenses necessary to maintain his professional, industry
association memberships incurred by him in performing his duties,
in
accordance with the Company’s expense reimbursement policies in place from
time to time.
|
|
e.
|
In
the event Executive’s employment with Company terminates for any reason,
any payments and benefits due the Executive under the Company’s employee
benefit plans and programs, including any Long-Term Incentive Plan,
shall
be determined in accordance with the terms of such benefit plans
and
programs, and shall be in addition to any other payments or benefits
herein.
|
|
a.
|
Termination
by the Company.
|
|
i.
|
During
the Employment Term, the Company may terminate the Executive’s employment
for Good Cause. Termination by the Company for Good Cause shall
be effective on the date the Company gives notice of such termination
to
the Executive.
|
|
ii.
|
During
the Employment Term, the Company may terminate the Executive’s employment
at any time without Good Cause upon 30-days notice to the Executive
or 30
days pay in lieu of such notice. Termination is effective 30
days after the date the written notice is provided to the Executive.
The
Company may, in its sole discretion, place the Executive on paid
administrative leave as of any date prior to the end of the 30-day
notice
period and require that the Executive no longer be present on Company
premises. During any period of administrative leave, the
Executive is not authorized to act or speak as a representative
of the
Company.
|
|
b.
|
Termination
by Executive.
|
|
i.
|
During
the Employment Term, the Executive may voluntarily terminate his
employment for any reason with the Company upon 30 days prior notice.
Termination is effective 30 days after the date the notice is provided
to
the Company. The Company may, in its sole discretion, place the
Executive on paid administrative leave as of any date prior to
the end of
the 30-day notice period and require that the Executive no longer
be
present on Company premises. During any period of
administrative leave, the Executive is not authorized to act or
speak as a
representative of the Company.
|
|
ii.
|
During
the Employment Term, the Executive may terminate his employment
for Good
Reason as defined in Section 2(e) only if the Executive has
provided the Board with 10 business days notice of his intent to
terminate
his employment for Good Reason and the Company fails to cure the
Good
Reason within 10 business days after receiving Executive’s written
notice. Termination for Good Reason will be effective on the
11
th
day after the Company receives Executive’s written notice and fails to
cure the Good Reason identified in Executive’s
notice.
|
|
c.
|
Termination
by Reason of Death or Incapacity.
|
|
d.
|
At-will
Termination
|
|
a.
|
If
the Executive’s employment ends at anytime (during or after the Employment
Term) for any reason, the Company shall pay the Executive his then
current
base salary and provide the Executive his then current benefits
(as
provided in Section 5) through the Termination
Date.
|
|
b.
|
If
during the Employment Term the Executive’s employment terminates by reason
of death as described in Section 6(c), the Company shall also pay
the
Executive’s estate any bonus as determined by the Compensation Committee
in accordance with the Company’s Executive Incentive
Plan.
|
|
c.
|
Provided
that after the Termination Date the Executive (i) signs in the
form
provided by the Company a release of any claims Executive may have
against
the Company or its then current or former officers, directors,
or
employees and (ii) certifies that the Executive has complied with
Sections
8, 9, 10 11 and 12 of this Agreement (confidentiality,
intellectual property, non-compete, non-solicitation, conflict
of interest
and return of property provisions),
then:
|
•
|
“Trade
Secrets” or proprietary
information;
|
•
|
strategic
sourcing information or analysis;
|
•
|
patents,
patent applications, developmental or experimental work, formulas,
test
data, prototypes, models, and product
specifications;
|
•
|
accounting
and financial information;
|
•
|
financial
projections and pro forma financial
information;
|
•
|
sales
and marketing strategies, plans and
programs
|
•
|
product
development and product testing
information;
|
•
|
product
sales and inventory information;
|
•
|
personnel
information, such as employees’ and consultants’ benefits, perquisites,
salaries, stock options, compensation, formulas or
bonuses;
|
•
|
organizational
structure and reporting
relationships;
|
•
|
business
plans;
|
•
|
names,
addresses, phone numbers of
customers;
|
•
|
contracts,
including contracts with clients, suppliers, independent contractors
or
employees; business plans and
forecasts;
|
•
|
existing
and prospective projects or business opportunities;
and
|
•
|
passwords
and other physical and information security protocols and
information.
|
|
(i)
|
hire
or attempt to hire a Covered Employee, encourage another to hire
a Covered
Employee, or otherwise seek to adversely influence or alter such
Covered
Employee’s relationship with the Company. A “Covered Employee”
shall mean any person who either is employed by the Company or
has been
employed by the Company within the preceding sixty (60)
days;
|
|
(ii)
|
encourage
or attempt to persuade a Customer to purchase other than from the
Company
products or services similar to those that the Company was selling
as of
the date Executive’s employment ends and is continuing to offer for sale.
A “Customer” shall mean any person or entity that has purchased products
or services from the Company within six (6) months prior to the
date
Executive’s employment ends; and/or
|
|
(iii)
|
encourage,
or attempt to persuade any person or entity that the Company is
using as a
consultant or vendor as of the date Executive’s employment ends to
terminate or modify such business relationship with the Company
in a
manner adverse to the Company.
|
|
a.
|
This
Agreement shall be binding upon, and inure to the benefit of the
parties
hereto and their heirs, successors and
assigns.
|
|
b.
|
The
Company shall require any successor to all or substantially all
of the
business or assets of the Company expressly to assume and agree
to perform
this Agreement in the same manner and to the same extent that the
Company
would be required to perform if no such succession had taken
place.
|
IF
TO THE EXECUTIVE:
|
IF
TO THE COMPANY;
|
Kleyton
Parkhurst
|
ePlus,
inc.
|
13595
Dulles Technology Drive
|
13595
Dulles Technology Drive
|
Herndon,
VA 20171
|
Herndon,
VA 20171
|
ePlus inc. | Executive | |||||||
/s/Phillip G. Norton | 11/03/2008 | /s/Kleyton Parkhurst | 10/31/08 | |||||
Phillip G. Norton | Date | Kleyton Parkhurst | Date |
/s/
PHILLIP G. NORTON
|
|
Phillip
G.
Norton
|
|
Chief
Executive
Officer
|
|
/s/
ELAINE D. MARION
|
|
Elaine
D.
Marion
|
|
Chief
Financial
Officer
|