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renewed for succeeding terms of one (1) year each
unless either party shall, at least ninety (90)
days prior to the expiration of any term, given
notice of his or its intention not to renew said
Agreement.
(b) This employment agreement may be term-
inated during this term or any renewal terms by the
occurrence of any events specified in paragraph
(11) of this Agreement.
3, For such term, Royer shall be ~he President and Chief
Executive Officer of CLM and ~cyer sha:: ;erfcrm such additional
du':.ies of
an execucive cha:ac:e:
.. ~ ...... - ': '" - ....; ...;
~.;; _..t:: _...Co_... woo
Di=ec-:..::s cf
CLM may from time to time assign co him. ~oye: shall devote
his best, full-time efforts t~ the ~erfcr~ance of his duties
for CLM, except for periods of vac~~ion, illness or incapacity.
4. For all services rendered :~ C:N in any capacity here-
under, Royer shall receive an annual salary of Eighty-Five
Thousand and no/100 Dollars ($85,000.00), payable at the rate
of Seven Thousand Eighty Three Dollars and Thirty Three Cents
($7,833.331 per month for each, from and including August 1st,
1989, payable on a basis of every two (2) weeks on Friday,
and in, addition, Royer shall receive a bonus of ten percent
(10~) of all after tax profits for a period of three (3) years
commencing with July 1, 1989 through June 30, 1992 to be paid
quarterly.
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reputation, business, or business relationships of
CLN or any of its subsidiaries or any repeated
or continuous failure, neglect or refusal to perform
in a satisfactory manner asssigned to Royer.
(e) This Employment Agreement shall terminate
automatically upon the death of Royer.
12. Royer is authorized to incur reasonable expenses in
connection with and for the promotion of the business of CLN
including expenses for meals and lodging, entertainment and
similar items as required from ~ime to ti~e by his duties.
CLM shall reimburse Royer for all such ex~enses upon the
presentation of an itemized accounc ~here:f.
13. CLN shall pay for all the costs associated with
R I - i' t' 'C' ", ~. .., .' I -\
oyer spar. clpa 10n 1n ~~ s urcup ~e~__n nsurance ~_an.
14. Royer shall be entitled, during the year, to a vacation
of at least two (2) weeks (plus any additional time as authorized
by company policy based upon length of service) during which time
his compensation shall be paid in full. Each vacation shall be
taken by Royer over such periOd or periods as may be mutually
acceptable to Royer and CLM.
15. Royer shall be entitled to sixty (60) days leave each
year with full compensation if he is unable to perform his
services due to illness or incapacity. If Royer shall be absent
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from his employment due to illness or incapacity during all or
substantially all of a continuous period of more than one hundred
eighty (180) days, then Royer may terminate his employment under
this Agreement upon thirty (30) days written notice given after
the expiration of such one hundred eighty (180) day period and
prior to the return of Royer to his employment. Upon ter-
mination, the only obligation of C:N, hereunder shall be to pay
Royer the earned compensation provided in this paragraph fifteen
(15) plus additional compensation equal t~ Twenty Five percent
(25%) of the annual compensation as prov:~ed in paragraph four
(4) above.
16. Nothing in this ~greemenc shal: :e construed as
precluding CLN from granting ~o Royer or ~oyer from receiving
any stock option or the right ~o ;a=:ici~a:e in any general
profit sharing, pension, bonus, or any ocher renumeration plan,
or in group insurance or similar employee benefit plans estab-
lished by CLN in which Royer would ocherw:se be entitled to
participate under the terms of such plan.
17. In the event that CLN shall sell all or substantially
all of the assets used by it in the portion of its business to
which Royer's duties shall relate or shall enter into any plan
or reorganization under which some other person shall acquire
control of the business of CLN to which Royer's duties
principally relate, then the following provisions shall apply.
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(a) Prior to CLN entering into a binding letter
of intent with any proposed purchaser, CLN shall
offer Royer a first right of refusal to equal or
exceed any offers given to CLN.
(bl If Royer does not exercise CLN's first
right of refusal, then CLN shall use its best efforts
to induce the acquiring entity to assume the obligation
of CLN under this Agreement.
(c) In the event tha: ei:~~r the acquiring
entity does not assume the cbli;ations of CLN under
this Agreement or Royer is unwilling to enter into an
employment re:ationshi? w::h the acquiring person,
then Royer's employment hereunder may be ter~inated
~ccr. ni~e:~ ~90) ~a75 wr~::=n ~c:~ce, ~: CLN ::
Royer or by Royer to CLNI however, Royer shall be
entitled to payment of contracted compensation for a
period of at least six (6) ~onths or a lump sum payment
of fifty percent (50\) of Royer's annual compensation
including bonus.
18. Royer agrees to observe and comply with the rules and
regulations of CLM as adopted by CLN's Board of Directors
either orally or in writing, respectin~ performance of his duties
and to carry out and to perform orjers, directions and policies
stated by CLN to him, from time to time either orally or in
writing.
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21. During the period of this Agreement, Royer shall devote
himself during all business hours to the business of CLN and
shall not, directly or indirectly, ~ngage in any business which
is competitive with the business of CLN. !n the event that Royer
shall resign his position with CLN or ter~inate this Agreement
for any reason other than default on the ~art of CLN, Royer also
agrees that he shall not engage in any business competitive
with the business of CLN for a gericd cf :~o (2) years after
the termination of this Agreement. For ~~r?oses of this
paragraph a business will be deemed ccmpe:iti7e if it is con-
duceed i~ whole cr in 9ar~ anT~h~=a :~ ~~e St~:e of Pennsylvania
or city wh~re :LN has a cam~u5 and ~~vc:~ei i~ th~ busi~ess of
t:aining cr any ether ~ield in ~n::~ ::~i :3 engage~ !: :~!: ~~~~
cr has ~ade cefinite 9lans t~ c~c=me ;n~~;~d; and Rcy~: ~~ll be
deemed ~o ha7e engaged, direcc:y or ind~:!c:ly, in such busi~ess
if :layer
=a::icicatas i~ as a~ amc::'!ee, ~art~er,
.... .... ~
prcpr~etor, or
investor who has advanced, lca~ed cr ex~e;.ded for purchase of
stock an amount or amcunts aggregating mere than Ten Thcusand
Dollars ($10,000.00).
22. This Agreement shall be construed according to the laws
of the State of Pennsylvania.
23. Any notice required cr ~ermi:ted to be given under this
Agreement shall be sufficient if such notice is in writing and
if sent by registered or certified mail ~o his residence, in
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the case of Royer and to its principal office, in the case of
CLN.
24. In the event that CLN shall breach any provision of
this Agreement, then CLN agrees to pay to Royer at once, the
compensation provided in paragraph four (4) above, for the full
period of this Agreement.
25. The waiver by CLN of a breach of any provision of
this Agreement by Royer shall not operate or be construed as
a waiver of any subsequent breach by Royer, nor shall the
waiver by Royer of a breach of any prcvisicn of this Agreement
by CLN, operate or be cons:ruec as a waiver of any sutsequent
breac~ by C:N.
26. Each of the rights and obliga:ions herein are legally
binding on each of the par::es hereto, be~ween themselves,
and on their successor, executors, adminis~rators, personal
representatives, heirs, devisees, beneficiaries, and assignees,
as the case may be.
27. The invalidity or unenforceability of any terms or
provision, or any clause or portion thereof, of this Agreement
shall in no way impair or affect the validity or enforceability
of any other provision of this Agreement, which shall remain in
full force and effect.
28. This Agreement is personal in its nature and neither
of the parties heretc 5h~tl, without t~a censer.: of the other,
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SHE E T
NETWORK
BALANCE
COMPUTER LEARNING
(lbl:;'~1Iq2
ASE,ETS
Petty Cash-Camp Hill
Petty CBeh-Altoona
Commonweal th-Cheeldng
Comlllonwlth Bu~in&~~ Inwe~t.aet
Corlllllonweal th Chee Idng-PByroll
ComMonwealth Cheeldng-PELL
AI toona ,1one>y 11..rll&t Aecnt.
Mid-State Checking-Altee~a
)r4B National Ce>rt el4 Depoe,it
PELL Grant Receivable
Accnt~.Recl?ivable-Camp Hill
Accnts.J!leee-i wabl e-AI te,c,n..
I.M.A.G. InsurBnce fiece-i~..ble
ConEdCo Payroll Fecei~at]e
F'S'EerVE' ~ c'r Bad [Ie-bt
~dvances to EmploteeeNI~ FF
Advanees-PermBne-nl Tr..'e]
Advilnc E!:.-F' /P G~rni E-t".IItE r. t
pccrued lnteree.t Fece. ...t,le
Fre-P..id 1a:lee.
Prepaid Insurance
Frepaid Pent
Frepaid IntereEt
Frepaid C.C.A. Due!
~lote Pec' b/l .11.t..G.
Con. Ed. Co. Fece-i~ab]e
O~fice E~uip.-C..mp Hill
Pccum.Depree.O~~ice Equip!C.~.
Education..l Equip/CBfflpH111
Accum.Dep.Ed.Equip/C..mp Hill
Office Equip-Altcon..
AccuIII.Deprec-O~~ice Equip/alt.
Educational Equip/Alto~na
AccuIII.Dep.Ed.EQuip/Altoon..
Security Deposits
Lee,e,on DevE'l. Coe,te,
Accum.Amort/lee.son Deve-I.Coe,h
Amorthed (Prepaid) Ellpeneee,
De~erred Pro4e~sional 6ervieee
Pre-paid Advert. C.H.
Prepaid Advert. Alteena
Prepaid HOllie> studt Equip.
TOTAL ASSETS
L1ABILI rtES
N,jl:e'llP,lyab Ie
Nate Payable - G. E.,.let.
Mid-State Nate P.ayable
A<:C:'j'Jnt'll Fay-tble-Vend'jr.
Unearned r'J i I: io;;
Accrued P,iYTol1
FleA r,H: L Lab. -Eo.? I'j'toer
''5';). (11;1
4(11;,.(11;1
45. ~,4E1. ()S
. ()(I
H,.E187 .~q
1 . (II;)
.-;)0
:',4.8'31.78
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:,4~'" Er~,:. e,:'
:'.00. :.1 b , Elc.
4.1:0.B4
l.(1 . 8; 1 , A ~i
f : 7. . 7,{,1" . ~U:J .
.01:-
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7.1~,:.Hl
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( : I>. ~.~'t'. I;J~.l
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/17. ](.4 .4t,1
t.(I. ~'~14 . Ell;,
C:E'.4E,7.eo:l
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4" .144.1;11;1
(:,.~, :',15,~IZ'
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7 . (184 . 1 to
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877.:15
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2,127.6~
"1,711.1)'1
1:';; . 41)1) . :10
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'1.I;r~,7 .86'3.76
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UABIUTlES AND SHAREHOLDER'S EQUITY
Currentllabllllles:
Current portion 01 long-term debt
Accounts payable
Unearned lulllon
Accrued:
Payroll and payroll taxes
Expenses
Income taxes payable
Total current liabilities
S 10,087
62,390
686,073
63,819
4,264
8.600
835,233
Long-term:
Debt, net 01 current portion
..BOniii'f>iYabll' ,
Excess 01 loss Irom subsidiary over Investment and net advances
11,732
16,764 ·
23,630
/52,125
Shareholder's equity:
Common stock, $10 par, euthorlzed 100,000 shares,
Issued and outstanding 6,923 shares
Additional paid In capital
Dellclt
69,230
88,462
I 121,338)
18.354
I 903,713
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COMPUTER LEARNING NETWORK, INC.
STATEMENT OF LOSS
FIFTEEN MONTHS ENDED SEPTEMBER 30, 1992
Revenue:
Tulllon
Projects, workshops end mlsceUeneous
Operating expenses
Operating Income
Other Income (expense):
Interest Income
Interest expense
Income before loss from subsidiary and Income taxes
Loss from subsidiary
Loss before Income taxes
Income taxes, state
Net loss
Bee notes to financial statements,
.
$ 2,041,1523
16,625
2,057,148
1,996,676
61,472
8,236
( 7,391\
845
62,317
140,196
n,879)
8,600
If 86,4791
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COMPlITCR LEARNING NETWORK, INC.
STATEMENT OF CASH FLOWS (CONTINUED)
FIFTEEN MONTHS ENDED SEPTEMBER 3D, 1992
Cash flows from financing activities:
Proceeds from long-term debt
Repayment of:
Long.term debt
Note payable, officer
Net cash provided by financing activities
Net decrease In cash
Cash, beginning of period
Cash, end of period
Supplemental disclosure of cash flow Information:
Cash paid during the period for Interest
See nolea to financial statements,
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. 30,480
( 8,661)
( 1UOB)
6,210
( 1,446)
61.043
- !SU97
S 7,389
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COMPUTER LEARNING NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FIFTEEN MONTHS ENDED SEPTEMBER 30, 1992
4, Commitments:
The Company Is obligated, under noncancelable operating leases, to pay minimum leasa paymente as
lollows:
Year ending
Sectember 30, Facilities Eaulcment
1993 $ 109,194 $ 3,395
1994 111,816 2,929
1995 79,924
1996 16,856
S 315,690 ~ 6,224
Rent expense lor the lilleen months e,;.:~,:; S.;~:.mtu ::, 1 SS2 was 5132,229,
5. Loss from subsidiary:
The Company owns 100% 01 the stock 01 Collegiate Publishing and Research Network, Inc, Summarized
Ilnanclellnlormatlon lor the subsidiary Is not available as of September 30, 1992 and lor the 1I11een months
then ended,
The loss Irom subsidiary equals the Company's Investment in and net advances to the subsidiary and
$23,630 of subsidiary debt guarantaed by the Company as 01 September 30, 1992, The subsidiary has
sustained losses in excess 01 these amounts,
6, Related party transactions:
The Company Incurred a menagementlee of $130,000 Irom Its subsidiary lor services provided during the
1I11een months ended September 30, 1992,
7, Income taxes:
The Company's election not to be taxed as a corporation tarminated In October 1991 as a resull 01 Its
Incorporation of a subsidiary, The Company willllle e consolidated federal Income tax return wllh lis
subsidiary, The Company has a consolidated lederal net operallng loss lor 1992, State Income taxes
have been provided based on the Company's Income before the loss from subsidiary,
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