Free Answer to Complaint - District Court of California - California

_ Case 3:O7—cv—O2748-I\/IHP D0cumenté5—2 Ifiled O7/06/2007 F#ag@10f3
I EXHIBIT A

°"’25’2°E;B§é ’§?0*?¥év-02748-MHP Document 25-2 G »FH§6'67/06/2007I Page; ¤f~3~Ei;m\
· ¢97 Méx-Bement bctvvccn Mark L-illgc and Andrew I
` I
Overview _ _ =L "
Andrew Verity (AV) joined Crcazive Marketing Concepts (CMC) on 4/I 7/01 Espxsajas manager. Mark _
_ Liligc {NH,) is cmcntly thc president and sch: owner of CMC. This document outlines the gencrai
agreement bBiW'B€R'ML and AV. The cicar understanding beetwccn both parties is that AV is joining
with a lung term c0mmitr11¤n:t¤·CMC and is expected to overtake the general management and dayto-
day administration of CMC from ML within tip; {1cxt3 1/2 to 4 yagrs. _ _ F I.
1. Work Expectation? AV _
- On 4/17/U1 AVj¤incd CMC as Salas Manager. It is agreed that there will be a learning curve while
AV1cams and assimilatcs fha business and industry specific infomation, .
- _The long mmm expectation 0fAV and ML is that AV will uvaruakc general management and day-
t¤—day administmticm of CMC from MTL. This time period is currently expected to be around 3 I/2
ywrs. .
:.__ l Tiigig agjxuiiznizwtjg ;'V;*g£c`;witg€3Q?1€i6 ;a;dk··£iu?g for CMC. tha w»=p»&£
Ir? War}-: Expectation — ML I
- The transition ofthe day-t¤·—day mjanagcmant workload tb AV is expected to afford ML cxtlra `
available time. This time can be used for 11011 CMC related pursi1its. It can also bc used in pursuit
of current and new business vcnmrcsfor CMC. _ ‘
_ - It is expected that ML will continue to have a strategic input imo CMC’s business direction in line,
I with his ownership interest.
. * -=·**<¤~·¤¤>·*~¤*=¤:鑤>~·:~*-**e» ***·** ‘·*""*"*· °°‘“*“"·
3. Remuncrsztwn p».1¢.u··.£.¢x u.·.:»%¤·¤1o¤¤ ¤‘¤~.¤¤·t·d¤¤*>~L¤
- Salary: AV to have a base salary of $75,000 in year I E`
— Ownership Interest: AV will earn a. 10% ownership interest in thc company. This will be vested
as fc-Hows: ` W. ¤— ·i~4wJ·¤».. W~¤··@M.¢4,,. ‘ ,
End yrl 1% sham received ·
' End 3;:-2 2% sham received (mini share 3%) _ . I
End y1·3 3% sham received (total sham 6%) '
End yr4 4% share received (total share 10%) ' `
_. ‘ __ A second 10% ownership sham can be ¢&mcd based upon thc capital growth ofthe; business, _
I As,} .$\·.¤,¤D,. in-c¤~».L,¤~J,w¢4l» Pwié} ~>¤w¤91€Za~.. $‘¥~¢»V¤*¤w·s·W;U.¤ Cmmgowm wqxbqwm. =°=¥*¤·¤Q¥¤~ <;,x¤zqsk
bL¤&. PM ‘€»\.¤§D.¥¤¤».w.¤.? ·¥.—¤. (¤¤»..& ¤-¤¤:».-·»¤9~¤:&:»£».,.

E 9%*25F2¤<>ii)et§e<>ZB:(B7¤cv—O2748-MHP Document 25-2 Filed O7/06/2007 Page 3 of 3 @ 002
‘ — Proiit Share: Will earn an increasing progiiighare of CMC profits over and above an initiai
baseline (see below) based upon the folioxiving schedule: -
Year 1 7% share _ l
_ Year 2 14% . .
Year 3 21% _ -
Year 4` I 28% I
Year 5 35% _
R'>¤·‘—¤e>¤:¤·.¤,. pi.¤*}‘tt·*si»·m5&\4. m*.1\·· price-\R§i¤•, ..i,‘¤;rg,__,_.;¤,i_L_.· ·n _ ¢a_;___1m— . _.
~ Bnseiiue calculation: $L°`u' BL" Mmm {Nm ;PwWd` {addi-`ii w“¥`m“
- Other Implications: It’s recognized that the change in ownership position created by the
remuneration agreement may lead to a change in the structure ofthe company away from sole ¤»_,,.\,,_,\.;,_;_‘,__
nance. There is aiso an tmdetstancling that ML as majority owner will continue melting business
decisions in the best long term interest of CMC’s profitability and will not unduly damage the
value ot`AV’s minority ownership and profit snare. .
‘ I- - 4. Exit Plan . - .
` - -p l - It is recognized that although the strongest intentions exist both parties to have s long ton;]
business relationship outlined here, there always remains potential for unknown and unforeseen
circumstances to create the need to separate each parties interests.
- If the decision is reached by either party to terminate the agreement in year 1 AV can ieave CMC _
p with no complications.
·· A decision to terminate the agreement in year 2 or thereafter will neceesitate the buyback of any
- Eharc Gwncpghip _;ii_,,,‘.,‘,,,._,, t..-e--;_. ;. ;__ __ .,;,...e.,,. ,;___;__,,,,,,t_.-·..,,,;T‘,-,T; -__ .-... __ d R ` '
disbursement of profit based on profit earned uticfhet dag: - = · · l. l. t =T—= - s
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Case 3:07-cv-02748-MHP

Document 25-2

Filed 07/06/2007

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Case 3:07-cv-02748-MHP

Document 25-2

Filed 07/06/2007

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Case 3:07-cv-02748-MHP

Document 25-2

Filed 07/06/2007

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