Target Operating Income means Six Million Four Hundred Thousand Dollars ($6,400,000) for the Calculation Period. "Target Revenue" shall mean Thirty Five Million Dollars ($35,000,000) for the Calculation Period. 2. Calculation of Additional Purchase Price. The amount of Additional Purchase Price payable to Buyer pursuant to Section 3.3 of the Purchase Agreement shall be equal to the product of Three Million Five Hundred Thousand Dollars ($3,500,000) multiplied by the decimal equivalent of the Achievement Percentage. In no circumstance shall the Additional Purchase Price be greater than Three Million Five Hundred Thousand Dollars ($3,500,000). 3. Limitation on Intercompany Charges. The aggregate amount of intercompany charges and overhead allocations that Buyer may reflect in operating income of the Company, when calculating the Additional Purchase Price shall not exceed Six Hundred Thousand Dollars ($600,000) during the Calculation Period. Buyer shall be entitled to reflect charges up to that amount in accordance with whatever policies Buyer may adopt in its sole discretion. Neither direct costs paid by Buyer on behalf of the Company and charged to the Company nor cost allocations for the Company's employees' participation in benefit plans shall be subject to the limitation in this sentence. 7 3 4. No Other Payments. The Additional Purchase Price shall be a one (1) time payment to Seller for operating results during the Calculation Period. No payment shall be due to Seller with respect to the revenue or operating income of the Company for any period before or after the Calculation Period. 5. Rounding. All percentage calculations shall be rounded to the nearest one thousandth of one percent. 6. Mergers and Acquisitions. In the event the Company acquires another entity or is acquired by another entity, no revenues or operating income from such other entity shall be included in Adjusted Operating Income or Adjusted Revenue. 7. Conduct of Business. Buyer shall permit the Company to continue the business of the Company in the manner previously conducted and to maintain the Company's quality image and reputation consistent with past practices. Buyer shall not require expense reductions so long as quarterly revenue and operating income of the Company (using Buyer's financial year end) meets or exceeds the Company's plan attached hereto as Schedule 1. Nothing hereunder shall be construed as an obligation of Buyer to provide funding to the Company. 8
Such instruction may be limited to apply to fiscal periods in which the Target Operating Income Growth Rate did not account for the occurrence of the Material Event.
Target Operating Income Growth Rate for any fiscal year during the Performance Period shall be the percentage change of the operating income plan for such fiscal year set forth in the Companys budget process and, for purposes of this agreement, presented to and approved by the Committee, over the consolidated operating income of the Company for the immediately preceding fiscal year, as set forth in the Companys audited financial statements for such preceding fiscal year.
Cumulative Target Operating Income Growth shall mean the simple average of the annual Target Operating Income Growth Rates for the Companys [NUMBER] fiscal years during the Performance Period, as approved for purposes of this Agreement by the Committee.
Cumulative Target Operating Income Growth shall mean the simple average of the annual Target Operating Income Growth Rates for the Companys [___number ___] fiscal years during the Performance Period, as approved for purposes of this Agreement by the Committee.
Both Operating Income and Target Operating Income may be adjusted by the Committee to reflect mergers, acquisitions and divestures completed during the Performance Period and changes in the Company's accounting practices and changes in GAAP which affect the comparability of results.(iii)Calculation of Expense Metric.