<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2000
Commission File Number 0-16530
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FINANCIAL PERFORMANCE CORPORATION
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(Exact name of Registrant as specified in its charter)
New York 13-3236325
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
335 Madison Avenue, New York, New York 10017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 557-0401
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [x] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 2, 2000
---------------------------- ----------------------------
Common Stock 11,503,134 Shares
<PAGE> 2
Financial Performance Corporation
Report on Form 10-QSB for the Three Months ended March 31, 2000
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Part I. Page
----
<S> <C> <C> <C>
Item 1. Financial Statements (Unaudited).........................................................1
Consolidated Balance Sheets
March 31, 2000 and March 31, 1999............................................2
Consolidated Statements of Operations
For the Three Months Ended
March 31, 2000 and March 31, 1999............................................3
Consolidated Statements of Cash Flows
for the Three Months Ended
March 31,1999 and March 31, 1998.............................................4
Consolidated Statements of Changes in Stockholders' Equity
for the Three Months Ended
March 31,2000 and March 31, 1999.............................................5
Notes to Consolidated Financial Statements............................................ . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................................................9
Part II
Item 5. Other Information.......................................................................15
Item 6. Exhibits and Reports on Form 8-K........................................................15
</TABLE>
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<PAGE> 3
PART I
Item 1. Financial Statements
The financial statements of Financial Performance
Corporation (the "Company") begin on page 2.
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FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
ASSETS
- ------
Current assets
Cash and cash equivalents $ 3,067,483 $ 4,560,760
Short-term investments 485,000 -
Marketable securities 150,000 -
Accounts receivable 3,437,086 1,847,395
Prepaid expenses other current assets 309,498 65,071
----------- -----------
Total current assets 7,449,067 6,473,226
Property and equipment, net of accumulated depreciation 269,111 209,070
Investment in subsidiary (FPC Information Corp.) - 695,070
Goodwill 12,760,203 -
Other assets 287,877 306,086
----------- -----------
$20,766,258 $ 7,683,452
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Accounts payable and accrued expenses $ 2,955,705 $ 2,333,948
Other current liabilities 310,592 -
----------- -----------
Total current liabilities 3,266,297 2,333,948
----------- -----------
Minority interest in consolidated subsidiaries 1,083,046 915,046
----------- -----------
Stockholders' equity
Common stock - 50,000,000 shares authorized, $.01 par
value; 10,928,034 and 9,471,534 shares issued and
outstanding at March 31, 2000 and 1999, respectively 109,280 94,715
Additional paid in capital 20,935,696 7,756,261
Accumulated deficit (4,628,061) (3,416,518)
------------ -----------
Total stockholders' equity 16,416,915 4,434,458
------------ -----------
$ 20,766,258 $ 7,683,452
============ ===========
</TABLE>
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<PAGE> 5
FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---------- ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Revenues $ 4,335,601 $ 3,390,389
---------- ------------
Costs and expenses
Cost of revenues 2,953,610 2,257,354
Salaries and related expenses 587,054 350,588
Selling, general and administrative 818,727 355,545
---------- ------------
4,359,391 2,963,487
---------- ------------
Operating income (loss) (23,790) 426,902
---------- ------------
Other income (expenses)
Investment income 35,223 25,514
Loss from FPC Information Corp. - (67,000)
Minority interest in earnings of subsidiary (54,000) (71,000)
---------- ------------
(18,777) (112,486)
---------- ------------
Income (loss) before income taxes (42,567) 314,416
Income taxes 33,560 41,784
---------- ------------
Net income (loss) $ (76,127) $ 272,632
========== ============
Basic income (loss) per share $ (.01) $ .03
Diluted income (loss) per share $ (.01) $ .03
</TABLE>
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<PAGE> 6
FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (76,127) $ 272,632
Adjustments to reconcile to net cash provided by
(used in) operating activities:
Depreciation and amortization 176,065 27,986
Minority interest in earnings of consolidated subsidiaries 54,000 71,000
Loss from FPC Information Corp. - 67,000
Increase (decrease) in cash flows from operating activities
resulting from changes in:
Accounts receivable (3,101,263) (1,504,612)
Prepaid expenses and other current assets (58,640) (33,796)
Other assets (8,959) 1,999
Accounts payable and accrued expenses 1,948,037 (507,240)
Other current liabilities 192,401 -
----------- -----------
Net cash used in operating activities (874,486) (1,605,031)
----------- -----------
Cash flows from investing activities:
Acquisition of equipment (10,014) (23,326)
Investment in subsidiary - (98,031)
Restricted cash 500,000 -
Purchase of marketable securities (150,000) -
Closing costs incurred in acquisition of iMapData.com, Inc. (77,196) -
----------- -----------
Net cash provided by (used in) investing activities 262,790 (121,357)
----------- -----------
Cash flows from financing activities:
Repayment of secured promissory note (500,000) -
----------- -----------
Net decrease in cash (1,111,696) (1,726,388)
Cash and cash equivalents, beginning of period 4,179,179 6,287,148
----------- -----------
Cash and cash equivalents, end of period $3,067,483 $ 4,560,760
========== ===========
</TABLE>
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FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
-------------------------- Paid In Accumulated
Shares Par Value Capital Deficit Total
------------ --------- ------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 2000 9,928,034 $ 99,280 $ 7,945,696 $(4,551,934) $ 3,493,042
Issuance of shares for acquisition of
iMapData.com, Inc. 1,000,000 10,000 12,990,000 - 13,000,000
Net income - - - (76,127) (76,127)
---------- -------- ----------- ----------- ------------
Balance, March 31, 2000 10,928,034 $109,280 $20,935,696 $(4,628,061) $ 16,416,915
========== ======== =========== ============ ============
Balance, January 1, 1999 9,471,534 $ 94,715 $ 7,756,261 $(3,689,150) $ 4,161,826
Net income - - - 272,632 272,632
---------- -------- ----------- ----------- ------------
Balance, March 31,1999 9,471,534 $ 94,715 $ 7,756,261 $(3,416,518) $ 4,434,458
========== ======== =========== ============ ============
</TABLE>
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FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - NATURE OF BUSINESS
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (all of which were normal recurring
adjustments) necessary to present fairly the consolidated financial position of
Financial Performance Corporation (the "Company") at March 31, 2000 and 1999,
and the results of its operations and its cash flows for the three months then
ended. The results of operations for the three months ended March 31, 2000 are
not necessarily indicative of the results to be expected for the full year.
The accounting policies followed by the Company are set forth in Note B to
the Company's consolidated financial statements in the Company's Annual Report
Form 10-KSB for the year ended December 31, 1999, which is incorporated herein
by reference.
The Company operates in two segments through its subsidiaries. Michaelson
Kelbick Partners Inc. ("MKP"), markets merger communication services to the
financial services industry and iMapData.com, Inc. ("iMapData.com"), acquired on
March 3, 2000 (see Note B), and based in Washington, D.C., provides
companies, governmental agencies and trade organizations with access through
digital computer software to competitive marketing, economic and other data on a
secure proprietary web site.
The consolidated financial statements include the accounts of Financial
Performance Corporation, its 80%-owned subsidiary, MKP and its wholly-owned
subsidiary iMapData.com from the date of acquisition. All significant
intercompany accounts and transactions have been eliminated.
NOTE B - ACQUISITION OF IMAPDATA.COM
On March 3, 2000, the Company acquired the stock of iMapData.com for
$13,077,196, including closing costs of $77,196. The transaction was accounted
for as a purchase business combination.
The acquisition was made with the issuance of 1 million shares of the
Company's stock (valued at $13 million based upon the closing price of the
Company's stock at March 3, 2000).
The following table provides an analysis of the purchase of the iMapData.com
acquisition. The excess of the purchase price over the book value of the net
assets acquired has been allocated to goodwill calculated as follows:
<TABLE>
<CAPTION>
<S> <C>
Total purchase cost, including closing costs $ 13,077,196
Fair value of net assets acquired 245,692
------------
Purchase price in excess of estimated fair
value of net assets acquired allocated to
goodwill $ 12,831,504
============
</TABLE>
Goodwill is being amortized on a straight line basis over a fifteen year period.
Pro forma disclosure as required under regulation SB14 is not deemed material.
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<PAGE> 9
FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)
NOTE C - SEGMENT INFORMATION
Condensed financial information of MKP, excluding intercompany
eliminations, as of March 31, 2000 and 1999 and for the period then ended, is as
follows:
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Revenues $ 3,863,000 $ 3,390,000
Operating income 268,000 352,000
Total assets 6,704,000 5,670,000
Total liabilities 2,174,000 1,979,000
</TABLE>
Condensed financial information of iMapData.com as of March 31, 2000 and
for the period March 3, 2000 (date of acquisition) to March 31, 2000 is as
follows:
<TABLE>
<CAPTION>
<S> <C>
Revenues $ 473,000
Operating income 309,000
Total assets 917,000
Total liabilities 363,000
</TABLE>
NOTE D - SIGNIFICANT CUSTOMERS
For the three months ended March 31, 2000, one customer of MKP accounted
for 90% of its revenues and two customers of iMapData.com accounted for 69% and
16% of its revenues, respectively.
NOTE E - WARRANTS AND OPTIONS TO PURCHASE COMMON STOCK
On January 12, 2000 the Company issued to the Chief Executive Officer and
the President, five-year options to purchase, in the aggregate, 2,000,000 shares
of the Company's common stock immediately exercisable at $14.50 per share.
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<PAGE> 10
FINANCIAL PERFORMANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Continued)
NOTE F - EARNINGS (LOSS) PER SHARE INFORMATION
The calculation of basic and diluted earnings (loss) per share for the
three months ended March 31, 2000 and 1999 is based upon the following:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Net income (loss) available to
common share owners $ (76,127) $ 272,632
=========== ===========
Average shares outstanding (a) 10,261,367 9,471,534
Dilutive securities
Stock options and warrants (c) - 903,000
------------ -----------
Average shares outstanding assuming dilution (b) 10,261,367 10,374,534
============ ===========
</TABLE>
(a) Used to compute basic earnings (loss) per share.
(b) Used to compute diluted earnings per share.
(c) Excluded for 2000 computation were 3,588,500 warrants and options which
would be antidilutive.
-8-
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
Financial Performance Corporation (which we may also refer to as the
"Company" or "FPC") is a holding company that operates through its subsidiaries.
Through our subsidiary, Michaelson Kelbick Partners Inc. (which we refer to as
"MKP"), we provide communications consulting services to the financial services
industry, particularly with respect to communications concerning mergers and
other business combinations. Bank merger communications accounts for
approximately 85% of MKP's revenues. MKP also provides marketing services,
planning and communications strategies, sales promotion and direct mail
services.
Through our recently acquired subsidiary, iMapData.com, Inc. (which we may
also refer to as "iMapData.com"), we provide companies, governmental agencies
and trade organizations with access through digital computer software to
competitive marketing, economic and other data on a secure proprietary website.
iMapData.com employs a vast array of information to produce its analyses, mining
and merging the data to create multi-colored, multi-layered geoeconomic
analytical maps and charts. iMapData.com's customized databases enable clients
to view submarkets unique to their industry, display information relating to
competitors, customers and suppliers in a given industry, and overlay and
correlate all this information in simple and meaningful ways -- all in real
time.
From time to time, we may seek acquisitions or business combinations within
or outside the financial services industry that we believe are strategic and
will provide growth opportunities for the Company. We are implementing a new
business strategy in which we will also focus on Internet-related businesses and
services aimed at the business-to-business market. We may fund such acquisitions
through the issuance of stock or with cash, or a combination. If we identify an
appropriate acquisition candidate, we may need to seek additional financing. We
cannot assure you that we will be able to successfully finance or integrate any
new acquisition.
In November 1999, in connection with the purchase of the Company's common
stock from Robert Trump by Jeffrey Silverman and Ronald Nash, we named Messrs.
Silverman and Nash as directors of the Company. On January 12, 2000, Mr.
Silverman was named our Chairman and Chief Executive Officer and Mr. Nash was
named our President.
Revenues. Our revenues historically have been derived from a limited number
of customers in the banking industry. For the year ended December 31, 1997,
three customers of MKP accounted for an aggregate of approximately 77% of our
total revenues, with one customer of MKP accounting for approximately 48% of our
total revenues. For the year ended December 31, 1998, three customers of MKP
accounted for approximately 83% of our revenues, with one customer of MKP
accounting for approximately 55% of our total revenues. For the year ended
December 31, 1999, two customers of MKP accounted for approximately 92% of our
total revenues, with one customer of MKP accounting for approximately 75% of our
total revenues. During the fiscal years ended December 31, 1997, December 31,
1998 and December 31, 1999, MKP accounted for all of our consolidated revenues.
For the three months ended March 31, 1999, two customers of MKP accounted for
approximately 74% and 10%, respectively, of the Company's total revenues. For
the three months ended March 31, 2000, one customer of MKP accounted for
approximately 90% of MKP's revenues and approximately 80% of the Company's
consolidated revenues. During the
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<PAGE> 12
same three month period ended March 31, 2000, two customers of iMapData.com
accounted for approximately 69% and 16%, respectively, of the revenues of
iMapData.com and approximately 9% of the Company's consolidated revenues.
Accordingly, during the three months ended March 31, 2000, three customers
accounted for approximately 89% of the Company's consolidated revenues. We
anticipate that a substantial amount of our consolidated revenues will continue
to be concentrated from a limited number of customers. As a result, our sales
and operating results are subject to substantial variations in any given year
and from quarter to quarter. Our sales and net income (if any) in a particular
quarter may be lower than the sales and net income (if any) for the comparable
quarter in the prior year. In addition, sales and net income (if any) in any
particular quarter may not necessarily reflect our results of operations for the
full year. The loss of, or reduction in services to, one or more significant
customers is likely to materially harm our business, financial condition and
results of operations.
Subsidiaries. Our consolidated financial statements include FPC and our
subsidiaries. All significant intercompany accounts and transactions have been
eliminated. During the five most recent fiscal years ended December 31, 1997,
1998, and 1999, MKP accounted for all of our consolidated revenues. During the
three-month period ended March 31, 1999, MKP accounted for 100% of our
consolidated revenues. During the three-month period ended March 31, 2000, MKP
accounted for approximately 89% of our consolidated revenues and iMapData.com
accounted for approximately 11% of our consolidated revenues.
Condensed financial information concerning MKP, excluding intercompany
eliminations, as of March 31, 2000 and 1999, and for the three months then
ended, is as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 1999
--------- ---------
<S> <C> <C>
Revenues 3,863,000 3,390,000
Operating Income 268,000 352,000
Total Assets 6,704,000 5,670,000
Total Liabilities 2,174,000 1,979,000
</TABLE>
Condensed financial information concerning iMapData.com as of March 31,
2000 and for the period commencing March 3, 2000 (the date of the Company's
acquisition of iMapData.com) through March 31, 2000, is as follows:
<TABLE>
<S> <C>
Revenues 473,000
Operating Income 309,000
Total Assets 917,000
Total Liabilities 363,000
</TABLE>
The following analysis of the financial condition and results of operations
of the Company should be read in conjunction with our consolidated financial
statements appearing elsewhere in this report.
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<PAGE> 13
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999
Revenues. Total revenues increased by $945,212 or approximately 27.9% to
$4,335,601 for the three months ended March 31, 2000 from $3,390,389 for the
three months ended March 31, 1999. This increase was primarily attributable to
increased services provided by MKP during this period as well as the inclusion
of the revenues of iMapData.com for the period commencing March 3, 2000 through
March 31, 2000 in the Company's consolidated revenues for the three months ended
March 31, 2000. The increase in MKP's services during this period was primarily
attributable to the increased scope of merger and other projects for which MKP
was engaged during this period and variations arising from the nature of MKP's
business, based upon the different stages of merger communications projects for
which MKP was engaged during this period.
Cost of Revenues. Cost of revenues increased by $696,256 or approximately
30.8% to $2,953,610 for the three months ended March 31, 2000 from $2,257,354
for the three months ended March 31, 1999. This increase was primarily
attributable to increased costs arising out of the increased level of services
provided by MKP during the three months ended March 31, 2000, as well as the
inclusion of the cost of revenues of iMapData.com for the period commencing
March 3, 2000 through March 31, 2000 in the Company's consolidated results of
operations for the three months ended March 31, 2000.
Salaries and Related Expenses. Payroll expenses increased by $236,466 or
approximately 67.4% to $587,054 for the three months ended March 31, 2000 from
$350,588 for the three months ended March 31, 1999. This increase was
attributable primarily to the recognition of additional payroll expenses for
employees of the Company's fifty-percent owned subsidiary, FPC Information
Corp., resulting from the Company's one-time write-off of its investment in such
subsidiary during the three- month period ended December 31, 1999, and, to a
lesser extent, to the inclusion of the payroll expenses of iMapData.com for the
period commencing March 3, 2000 through March 31, 2000 in the Company's
consolidated results of operations for the three months ended March 31, 2000.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $463,182 or approximately 130.3% to
$818,727 for the three months ended March 31, 2000 from $355,545 for the three
months ended March 31, 1999. This increase was attributable principally to an
increase in general overhead expenses, including office lease expense,
professional fees, insurance costs and other administrative expenses.
Other Expense. Other expense decreased by $93,709 or approximately 83.3% to
$18,777 for the three months ended March 31, 2000 from $112,486 for the three
months ended March 31, 1999. This decrease was primarily attributable to the
elimination of continuing losses from the Company's subsidiary, FPC Information
Corp., as a result of the Company's write-off of the Company's investment in
such subsidiary during the three-month period ended December 31, 1999, as well
as, to a lesser extent, an increase in investment income earned by the Company
and a decrease in the deduction attributable to the minority interest of MKP's
earnings during the three-month period ended March 31, 2000.
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<PAGE> 14
Operating Income (Loss). Operating income decreased by $356,983 or
approximately 113.5% to an operating loss of $42,567 for the three months ended
March 31, 2000 compared to operating income of $426,902 for the three months
ended March 31, 1999.
Net Income (Loss). Net income decreased by $348,759 or approximately 127.9%
to a net loss of $76,127 for the three months ended March 31, 2000 compared to
net income of $272,632 for the three months ended March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2000, we had working capital (current assets less current
liabilities) of $4,182,770, stockholders' equity of $16,416,915 and a working
capital ratio (current assets to current liabilities) of approximately 2.3:1,
compared to working capital of $4,139,278, stockholders' equity of $4,434,458
and a working capital ratio of approximately 2.8:1 as of March 31, 1999. As of
March 31, 2000 and 1999, we had cash and cash equivalents of $3,067,483 and
$4,560,760, respectively. However, we conduct our operations through our
subsidiaries and rely on cash payments from our subsidiaries to meet our
operating requirements.
For the three months ended March 31, 2000 and March 31, 1999, net cash used
in our operating activities was $874,486 and $1,605,031, respectively. For the
three months ended March 31, 2000 and March 31, 1999, we generated $262,790 and
used $121,357 of net cash for investing activities, respectively. For the three
months ended March 31, 2000 and March 31, 1999, net cash used in the Company's
financing activities was $500,000 and $0, respectively.
As of March 31, 2000, we had no long-term debt. On December 12, 1999,
Robert S. Trump, our principal shareholder, loaned us $500,000 on a short-term
basis. The loan provided for interest at the rate of 10% per year and matured on
February 15, 2000. On February 15, 2000, we repaid the entire principal amount
of the $500,000 loan to Mr. Trump.
As of March 31, 2000, we had made no material capital commitments other
than those related to non-cancelable operating leases for office space and
equipment. For the years ended December 31, 2000, 2001, 2002, and 2003, our
minimum payments in connection with these leases are approximately $920,000,
$932,000, $1,066,000 and $1,066,000 per year, respectively. We expect to have
sublease rental income of approximately $200,000 in each such year.
Based on our current plan of operations, we anticipate that our existing
working capital and expected operating revenues will provide sufficient working
capital for the conduct of our business. However, there can be no assurance that
we will not require additional financing. Our capital requirements depend on,
among other things, whether we are successful in continuing to generate revenues
and income from our subsidiaries, whether we continue to identify appropriate
acquisition candidates, our marketing efforts, competition, and the cost and
availability of third-party financing.
We may also seek additional financing in connection with the acquisition of
one or more other entities or products (or rights related thereto) or the
consummation of other business combinations. If needed, we may raise financing
through additional equity offerings, joint ventures or other collaborative
relationships, borrowings and other transactions. We may seek additional funding
through any such transaction or a combination thereof. There can be no assurance
that additional financing will be available to us or, if available, that such
financing will be available on acceptable terms.
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<PAGE> 15
YEAR 2000
The Year 2000 issue is one where computer systems recognize the designation
"00" as 1900 instead of 2000, potentially resulting in system failure or
miscalculations. In recognition of this Year 2000 issue, commencing in 1998, we
initiated a comprehensive review of our information technology systems, on which
we are dependent for the conduct of our business operations, as well as the
computer hardware and software products, components and other equipment supplied
to us by third parties in order to determine the adequacy of those systems in
light of our future business requirements. We completed our review in January
1999.
As a result of our review, we determined that our internal financial
software systems were adequate for our future business needs, including Year
2000 compliance, and do not need to be replaced. The cost of our Year 2000
efforts was immaterial. To date, we have not experienced any material Year 2000
compliance problems relating to our internal financial software systems or our
other information technology systems, computer hardware, software products and
components or other equipment.
We have not assessed the Year 2000 readiness of any third parties with whom
we have relationships, such as our banking clients or vendors. Due to our
uncertainty of the Year 2000 readiness of these third parties, we cannot
determine whether the failure by one or more of these parties to be Year 2000
compliant will materially impact our business, financial condition or results of
operations. Through May 12, 2000, we have not experienced any material Year 2000
compliance failures by any third parties.
If we or the third parties with which we have relationships were to fail to
meet Year 2000 requirements, we would likely encounter disruptions to our
business that could have a material adverse effect on our business, financial
position or results of operations. We could be materially and adversely impacted
by widespread economic or financial market disruption or by Year 2000 computer
system failures of third parties with which we have relationships.
HOLDING COMPANY AND OPERATING SUBSIDIARIES
We conduct our operations through our subsidiaries. We have historically
relied on cash payments from MKP to, among other things, pay creditors, maintain
capital and meet our operating requirements. Under MKP's shareholders'
agreement, MKP is required to pay to FPC on a quarterly basis a management fee
equal to 30% of MKP's pre-tax earnings. In fiscal 1999 and 1998, MKP paid FPC
approximately $766,000 and $1,714,000, respectively. Regulations, legal
restrictions and contractual agreements could restrict any needed payments from
MKP, or in the future, other subsidiaries. If we are unable to receive cash
funds from MKP, from iMapData.com, or from any operating subsidiaries we may
acquire in the future, our operations and financial condition will be materially
and adversely affected.
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<PAGE> 16
STOCK PRICE FLUCTUATIONS
The market price of our common stock has fluctuated significantly and may
be affected by our operating results, changes in our business and management,
changes in the industries in which we conduct business, and general market and
economic conditions. In addition, the stock markets in general have recently
experienced extreme price and volume fluctuations. These fluctuations have
affected stock prices of many companies without regard to their specific
operating performance. The price of our common stock may fluctuate significantly
in the future.
INFLATION
In general, we believe that we will be able to offset any inflationary
pressures by increasing operating efficiency, monitoring and controlling
expenses and increasing prices to the extent permitted by competitive factors.
FORWARD-LOOKING STATEMENTS
Certain statements we make in this Report are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. You
can identify these forward-looking statements by our use of words such as
"believes," "anticipates," "may," "intends," "expects," "plans," "proposed" and
words of similar import. These forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause actual results,
performance or achievements or industry results to be materially different from
results, performance or achievements that we expressed or implied by our
forward-looking statements. These factors include:
- the continued services of Messrs. Silverman and Nash, Ms.
Kelbick and Ms. Michaelson of MKP and Messrs. Lilley and
DeFranco of iMapData.com;
- our ability to identify appropriate acquisition candidates,
complete such acquisitions and successfully integrate
acquired businesses;
- changes in our business strategies or development plans;
- competition;
- our anticipated growth within the banking and
internet-related industries;
- our ability to obtain sufficient financing to continue
operations; and
- general economic and business conditions, both nationally
and in the regions in which we operate.
Given these uncertainties, you should not place undue reliance on our
forward-looking statements. We undertake no obligation to update these factors
or to publicly announce the result of any revisions to any of our
forward-looking statements contained in this Report to reflect events or
developments after the date hereof.
-14-
<PAGE> 17
PART II
Item 5. Other Information
(a) On January 12, 2000, Jeffrey S. Silverman was named Chairman and
Chief Executive Officer of the Company and Ronald Nash was named President of
the Company. On such date, the Company issued to each of Messrs. Silverman and
Nash, in lieu of salaries for the year 2000 five year options to purchase
1,000,000 shares of common stock, immediately exercisable at $14.50 per share.
(b) On January 18, 2000, the Company's board of directors appointed
Grant Thornton LLP as our certifying accountants, replacing Goldstein & Morris
(the "Former Accountants").
During our two most recent fiscal years and the interim period
thereafter ended January 18, 2000, there were no disagreements with the Former
Accountants on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of the Former Accountants, would have caused
them to make reference to the subject matter of the disagreement in their
report. None of the Former Accountants' reports on our financial statements for
either of the past two years contained an adverse opinion or disclaimer of
opinion, or was qualified or modified as to uncertainty, audit scope, or
accounting principles.
A letter from the Former Accountants dated January 18, 2000 addressed to
the Securities and Exchange Commission, stating that they agree with the
foregoing, was filed as an Exhibit to the Company's Form 8-K dated January 18,
2000.
(c) On March 3, 2000, pursuant to an Agreement and Plan of Merger dated
as of February 23, 2000 among the Company, FPC Acquisition Corp., iMapData.com,
and the stockholders of iMapData.com, FPC Acquisition Corp. was merged into
iMapData.com in exchange for 1,000,000 shares of the Company's common stock. As
a result of the merger, iMapData.com has become a wholly owned subsidiary of the
Company. iMapData.com is a Washington, D.C.-based electronic database
information and proprietary Internet-based company.
(d) On April 26, 2000, Edward T. Stolarski was hired as Executive Vice
President of the Company and elected a Director of the Company. Mr. Stolarski
will be engaged in the Company's corporate finance activities, including
identifying sources of capital and structuring financing transactions. Prior to
joining the Company, Mr. Stolarski was Senior Vice President at GE Capital's
Capital Funding, Inc.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1. Amendment dated as of January 10, 2000 to Executive
Employment Agreement of William F. Finley ( incorporated by
reference to Exhibit 10.38 to the Company's Report on Form
10-KSB for the fiscal year ended December 31, 1999).
-15-
<PAGE> 18
10.2. Option Agreement dated as of January 12, 2000 between the
Company and Jeffrey Silverman (incorporated by reference to
Exhibit 10.39 to the Company's Report on Form 10-KSB for
the fiscal year ended December 31, 1999).
10.3. Option Agreement dated as of January 12, 2000 between the
Company and Ronald Nash (incorporated by reference to
Exhibit 10.40 to the Company's Report on Form 10-KSB for
the fiscal year ended December 31, 1999).
10.4. Agreement and Plan of Merger dated February 23, 2000
between the Company, FPC Acquisition Corp., iMapData.com,
Inc., William Lilley III and Laurence J. DeFranco
(incorporated by reference to Exhibit 10.17 to the
Company's Current Report on Form 8-K filed February 24,
2000).
10.5. Stock Option Agreement dated as of April 26, 2000 between
the Company and Edward T. Stolarski, covering 100,000
shares of common stock; Stock Option Agreement dated as of
April 26, 2000 between the Company and Edward T. Stolarski,
covering 300,000 shares of common stock; and Employment
Agreement dated April 25, 2000 between the Company and
Edward T. Stolarski.
16.1. Letter from Goldstein and Morris addressed to the
Securities and Exchange Commission (incorporated by
referenced to Exhibit 16.1 to the Company's Current Report
on Form 8-K filed January 24, 2000).
(b) Reports on Form 8-K
The Company filed the following Current Reports on Form 8-K
during the three months ended March 31, 2000:
(i) the Company's Current Report on Form 8-K dated January 13,
2000 (filed on January 19, 2000), in which the Company
reported that Jeffrey S. Silverman had been named the
Company's chief executive officer, Ronald Nash had been
named the Company's president, and the Company issued
options to purchase 1,000,000 shares of common stock to
each of Messrs. Silverman and Nash in lieu of salaries;
(ii) the Company's Current Report on Form 8-K dated January 18,
2000 (filed on January 24, 2000), in which the Company
reported a change in the Company's certifying accountants
to Grant Thornton LLP, replacing Goldstein & Morris; and
(iii) the Company's Current Report on Form 8-K dated February 24,
2000 (filed on February 24, 2000) in which the Company
reported that the Company had entered into an Agreement and
Plan of Merger pursuant to which iMapData.com, Inc. will be
acquired by the Company for 1,000,000 shares of the
Company's common stock.
-16-
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 12, 2000
FINANCIAL PERFORMANCE CORPORATION
By: /s/ Jeffrey S. Silverman
-------------------------
Jeffrey S. Silverman,
Chief Executive Officer
By: /s/ William F. Finley
----------------------
William F. Finley,
Chief Financial Officer
-17-
<PAGE> 1
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT (the "Agreement"), dated as of April 26, 2000
between Financial Performance Corporation, a New York corporation (the
"Company"), having an address at 777 Third Avenue, 30th Floor, New York, New
York 10017 and Edward T. Stolarski, residing at 40 Hackberry Hill Road, Weston,
Connecticut 06883 ("Grantee").
In consideration of Grantee's employment by the Company in accordance
with a certain employment agreement, dated as of April 25, 2000, between the
Company and the Grantee, the Company hereby grants to the Grantee, a
nonqualified stock option (the "Option") to purchase from time to time all or a
portion of an aggregate of 300,000 shares of the Company's common stock, $.01
par value per share (the "Shares"), subject to and upon the terms set forth
herein. This Option is a nonqualified Stock Option which is not intended to be
an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").
To evidence the Option and to set forth its terms, the Company and the
Grantee agree as follows:
1. Confirmation of Grant. The Company hereby evidences and confirms
its grant of the Option to the Grantee on the date of this Agreement.
2. Number of Shares. This Option shall be for an aggregate of 300,000
Shares.
3. Exercise Price. The exercise price shall be $6.38 per share, which
amount equals the closing sale price of the Company's common stock as quoted on
the OTC Bulletin Board as of the close of business on April 25, 2000.
4. Term and Vesting of Option. Subject to the terms of this
Agreement, the Option shall expire five years from the date hereof and shall
vest and be exercisable as follows: all or a portion of 150,000 Shares (in whole
shares) of the Option from April 27, 2001 to the expiration of the Option; and,
all or any portion of 150,000 Shares (in whole shares) of the Option from April
27, 2002 to the expiration of the Option; provided, however, that any portion of
the Option shall be exercisable in denominations of 25,000 Shares or more.
5. Exercise of Options. The Option may be exercised by written notice
to the Chief Executive Officer of the Company at the Company's principal office.
Such notice shall state the election to exercise the Option and the number of
shares in respect of which it shall be exercised, and shall be signed by the
Grantee or his "Permitted Assigns," in accordance with Paragraph 6 below. In the
event that the Option shall be exercised pursuant to paragraph 6 hereof by any
person other than the Grantee, such notice shall be accompanied by appropriate
proof of the right of such person to exercise the Option, as may be reasonably
required by the Company and its counsel. The notice of exercise shall be
accompanied by payment of the full purchase price of the Shares being purchased
in cash or cash equivalents. The Grantee shall have the right to instruct the
Company to
<PAGE> 2
withhold a portion of the Option shares to meet the obligations for
tax withholding upon exercise of the Option or pay cash to satisfy such tax
withholding obligations. The certificate or certificates for the shares as to
which the Option shall have been so exercised shall be registered in the name of
the Grantee or his Permitted Assigns and shall be delivered, as provided above,
to or upon the written order of the person or persons exercising the Option as
soon as practicable (except as otherwise provided below in this paragraph 5)
after the due and proper exercise of the Option. The holder of the Option shall
not have any rights of a stockholder with respect to the shares covered by the
Option unless and until the certificate or certificates for such shares shall
have been issued and delivered. It is expressly understood that, notwithstanding
anything contained in this Agreement to the contrary, (1) the time for the
delivery of the certificate or certificates of Common Stock may be postponed by
the Company for such period as may be required by the Company to comply with any
listing requirements of any national securities exchange or to comply with any
applicable State or Federal law, and (2) the Company shall not be obligated to
sell, issue or deliver any shares as to which the option or any part thereof
shall have been exercised unless such shares are at that time effectively
registered or exempt from registration under the Securities Act of 1933, as
amended. All shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and non-assessable. The Company has reserved
for issuance out of the authorized capital stock of the Company a number of
shares of the Company's common stock equal to the number of shares of the
Company's common stock issuable upon the exercise of the Option.
6. Nontransferability. The Option shall not be assignable or
transferable other than to a member of the immediate family of Grantee or to
trustees of a trust, the beneficiaries of which are members of the Grantee's
immediate family, or by will or the laws of descent and distribution. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof shall be null and void and without
effect.
7. Termination of Employment. In the event the employment of the
Grantee with the Company is terminated by the Company for Cause (as such term is
defined in the Employment Letter, dated April 25, 2000, between the Company and
the Grantee), all rights to purchase shares pursuant to the Option shall
forthwith cease and terminate. In the event the employment of the Grantee with
the Company is terminated by the Company without Cause, the rights to exercise
the Option shall accelerate and the Grantee shall have the right for a period of
three months after the termination of his employment, to exercise all of the
shares subject to the Option. In the event the employment of the Grantee with
the Company is terminated by the Grantee, all rights to purchase shares pursuant
to the Option shall forthwith cease and terminate, except that for a period of
three months after the termination of his employment, the Grantee shall have the
right to exercise the Option with respect to those shares which he had a right
to purchase as of the date of termination. If such termination results from
physical disability, then the right to exercise the Option shall accelerate and
the Grantee shall have the right to exercise the Option in full for a period of
twelve (12) months after the date of the date of his termination of employment
or until the expiration date of the Option, if sooner. Notwithstanding anything
contained herein to the contrary, if the Grantee terminates his employment as a
result of a Change in Control of the Company (as defined below), all options not
otherwise vested pursuant to this agreement, shall immediately vest and be
exercisable upon such termination. Change in Control of the Company shall occur
at any time that Jeffrey S. Silverman shall no longer be Chairman of the Company
and the majority of the members
<PAGE> 3
of the Board of Directors shall consist of individuals who were not directors of
the Company on the first annual meeting of shareholders subsequent to the date
hereof.
8. Death of Grantee. In the event of the death of the Grantee while
he is in the employ of the Company, the Option or unexercised portion thereof
shall be exercisable in full at any time prior to the expiration date of the
Option, in accordance with the terms of the Option, but only by the person or
persons to whom such Grantee's rights under the Option shall pass by the
Grantee's will or by laws of descent and distribution of the state of his
domicile at the time of his death.
9. Adjustments. In the event of any merger, reorganization,
consolidation, sale of substantially all assets, recapitalization,
reclassification, Common Stock dividend (in excess of 5% thereon), Common Stock
split, spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Common Stock after the date hereof, an
appropriate substitution or adjustment shall be made in the number of shares
subject to the Option and to the exercise price; provided, however, that such
adjustment shall not increase the aggregate value of the Option, no fractional
shares shall be issued, and the aggregate exercise price shall be appropriately
reduced on account of any fractional shares. Without limiting the foregoing, in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with a subsidiary in which the Company is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of the outstanding Shares issuable upon
exercise of the Option) or in case of the sale, transfer or other disposition of
all or substantially all of the assets of the Company, then the Grantee shall be
entitled to receive upon exercise of the Option such number of shares of capital
stock or other securities or property upon, or as a result of, such transaction
that the Grantee would have been entitled to receive had the Option been
exercised immediately prior to such transaction.
10. No Limitation on Rights of the Company. The grant of this Option
shall not in any way affect the right or power of the Company to make
adjustments, reclassifications, or changes in its capital or business structure
or to merge, consolidate, dissolve, liquidate, sell, or transfer all or any part
of its business or assets.
11. Rights as a Shareholder. The Grantee shall have the rights of a
shareholder with respect to the Shares covered by the Option only upon becoming
the holder of record of those Shares.
12. No Obligation to Exercise Option. The granting of the Option shall
impose no obligation upon the Grantee to exercise the Option.
13. Governing Law. Except to the extent preempted by Federal law, this
Agreement shall be construed and enforced in accordance with, and governed by,
the laws of the State of New York without regard to any rules regarding
conflicts of law.
<PAGE> 4
IN WITNESS WHEREOF, the Company and the Grantee have duly executed this
Stock Option Agreement as of the date first above written.
FINANCIAL PERFORMANCE CORPORATION
By: /s/ Jeffrey S. Silverman
------------------------------------
Name: Jeffrey S. Silverman
Title: Chief Executive Officer
/s/ Edward T. Stolarski
------------------------------------
Edward T. Stolarski
<PAGE> 5
FINANCIAL PERFORMANCE CORPORATION
777 THIRD AVENUE
THIRTIETH FLOOR
NEW YORK, NY 10017
April 25, 2000
Mr. Edward T. Stolarski
40 Hackberry Hill Road
Weston, CT 06883
Dear Mr. Stolarski:
We are pleased to extend to you an offer to be employed as a principal
executive officer of Financial Performance Corporation (the "Company") upon the
terms and conditions herein set forth. This offer shall remain open until May 1,
2000 and is contingent upon your acceptance of this offer by returning a signed
copy of this letter to us no later than May 1, 2000.
1. We have agreed to employ you as an Executive Vice President of the
Company and you have agreed to serve as such for a term commencing on May 15,
2000 (the "Effective Date") and ending on May 14, 2002, unless sooner terminated
or extended as herein provided (the "Term"). The Term shall be automatically
extended by one year, unless either party provides the other with written
notice, not later than ninety days prior to the expiration of the Term, of its
election not to extend the Term. Thereafter, the Term shall be automatically
extended by additional one year periods, unless either party provides the other
with written notice, not later than ninety days prior to the expiration of the
Term, as extended, of its election not to extend the Term.
2. As Executive Vice President of the Company, you shall perform such
duties as shall be requested of you from time to time by the Board of Directors.
You shall be nominated, and you agree to serve, for no additional compensation,
as a member of the Board of Directors. You further agree to serve as an officer
or director of any of the current or future subsidiaries of the Company, as the
Board of Directors shall request, without additional compensation.
3. You shall receive a salary of $250,000 per year to be paid in
accordance with the Company's normal payroll practices. In addition, you shall
be eligible to receive an annual cash bonus based upon your performance and the
performance of the Company, as determined by the
<PAGE> 6
Mr. Edward Stolarski
April 25, 2000
Page 2
Board of Directors in their sole discretion; provided, however, that you shall
receive a guaranteed minimum bonus of $150,000 for each year of the Term payable
in accordance with the Company's policies. You may also, at the discretion of
the Board of Directors, participate in any of the Company's incentive
compensation plans and to receive bonus awards or commissions based on such
plans subject to your attainment of performance goals set by the Board of
Directors; provided, however, during the Term, you shall receive incentive
performance commissions, payable at the Company's discretion in either cash or
common stock of the Company (provided, however, that in the event the Company is
in a cash positive position, up to $250,000 shall be payable, at your
discretion, in cash), upon the closing of any equity or debt (not including debt
refinancings) raised by the Company or any of its subsidiaries, assuming that
you participated in structuring and closing the transaction, determined in
accordance with the following formula: between $2.5 million and $5 million, a
total of $100,000; and, above $5 million, 5% of the total equity or debt raised,
net of reasonable and customary expenses. Further, during the Term, the Company
shall provide you with an automobile, the exact model of which shall be either a
Mercedes E class, BMW 5 Series or equivalent model mutually agreed to between
you and the Company, at the Company's full cost and expense. We also agree, at
your option, to either reimburse you for any expenses incurred by you for
payment of COBRA, term life and disability premiums during the Term, or provide
you with healthcare, term life and disability benefits as provided to other
senior executives of the Company.
4. During each year of the Term, you shall be entitled to a total of
four weeks vacation taken in accordance with the Company's policies.
5. The Company shall pay for or reimburse you for all reasonable
expenses actually incurred by or paid by you during the Term in the performance
of your services under this agreement, upon presentation of expense statements
or vouchers or such other supporting information as the Company customarily may
require of its officers.
6. In consideration of your signing and the delivery of this
Agreement, we have agreed to grant to you an initial bonus consisting of an
option to purchase 100,000 shares of the Company's Common Stock, in accordance
with the Form of Option attached hereto as Exhibit A.
7. As further consideration, we have agreed to grant to you an option
to purchase 300,000 shares of the Company's Common Stock, in accordance with the
Form of Option attached hereto as Exhibit B.
8. During the time that you are employed by the Company and for a
period of twenty-four months thereafter, you agree that you will not, in any
manner, be engaged directly or indirectly, within the United States of America,
its territories and possessions (or for such lesser period of time or for such
lesser geographical areas as may be determined by a Court of law or equity to be
a reasonable limitation on your competitive activities) as an employee, partner,
officer, director,
<PAGE> 7
Mr. Edward Stolarski
April 25, 2000
Page 3
representative, consultant, agent or stockholder of any company in direct
competition with the Company or any of its subsidiaries; provided, however,
nothing shall prohibit you from owning up to 5% of the outstanding securities of
any such company; and, provided further, however, that nothing herein shall be
deemed to prohibit you from being employed or working in the financial services
business.
9. (a) You agree that all information pertaining to the business of
the Company, its subsidiaries and affiliates, and their respective officers,
directors, employees, agents, shareholders and customers (excluding publicly
available information) constitutes a valuable and confidential asset of the
Company. Such information includes, without limitation, information related to
trade secrets, business plans, product designs, statistical data and
compilations, sourcing contacts and financial information of the Company. You
shall hold all such information in trust and confidence for the Company, its
subsidiaries and affiliates, and shall not use or disclose any such information
to any person, firm, corporation or other entity, except as may be required
pursuant to the order of a court of competent jurisdiction, and shall be liable
for damages incurred by the Company as a result of disclosure of such
information by you for any purpose other than the Company's business, either
during your employment or after your employment terminates for whatever reason.
(b) During the Term of this Agreement and continuing for a period
of twenty-four months after the expiration or termination of this Agreement and
the Term, you agree that you shall not, directly or indirectly, individually or
on behalf of other persons, solicit, aid or induce any employee of the Company,
its subsidiaries or affiliates to leave their employment with the Company or
such subsidiaries or affiliates in order to accept employment with or render
services to or with another person, firm, corporation or other entity, or assist
or aid any other person, firm, corporation or entity in identifying or hiring
such employees.
10. Subject to the other terms and conditions herein, your employment
under this Agreement shall terminate upon the expiration of the Term or, if
earlier, upon the earliest to occur of any of the following events or in
accordance with the other provisions of this paragraph:
(a) If, in the written opinion of a qualified physician selected
by the Company and reasonably approved by you, you shall become unable to
perform your duties hereunder due to physical or mental illness, and you have
failed, because of such illness, to render, for 120 days out of any 180-day
period, services of the character contemplated by this Agreement, the Company
may terminate your employment upon written notice to you. In such event or in
the event of your death during the Term, you shall be entitled to receive your
base salary at the rate provided in paragraph 3 to the end of the calendar month
in which termination occurs and the minimum annual bonus payable to you in
accordance with paragraph 3 for the year of the Term in which termination
occurs.
<PAGE> 8
Mr. Edward Stolarski
April 25, 2000
Page 4
(b) The Company may terminate your employment at any time for
Cause, upon written notice to you. As used in this Agreement, "Cause" shall mean
(i) the willful failure by you to substantially perform your duties hereunder
(other than any such failure resulting from your incapacity due to physical or
mental illness); (ii) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company; (iii) conviction of a
felony or any crime involving moral turpitude; or (iv) gross negligence by you
in the performance of your duties hereunder.
If your employment is terminated by the Company for any reason other than
as set forth in paragraphs 10(a) and (b) above, the Company shall continue to
pay to you the salary, the minimum guaranteed bonus and healthcare, term life,
disability and automobile benefits that you would have otherwise received during
the Term had your employment not otherwise been terminated. If you terminate
your employment as a result of a Change in Control of the Company (as defined
below), the Company shall pay to you, in one lump sum payment within 30 days
after the Change of Control, the salary and the minimum guaranteed bonus,
together with compensation for lost benefits (which are limited to healthcare,
term life, disability and automobile) through the remainder of the Term, that
you would have otherwise received during the Term had your employment not
otherwise been terminated and, in addition, all options not otherwise vested
pursuant to the Form of Option attached hereto as Exhibit B, shall immediately
vest and be exercisable upon such termination. Change in Control of the Company
shall occur at any time that Jeffrey S. Silverman shall no longer be Chairman of
the Company and the majority of the members of the Board of Directors shall
consist of individuals who were not directors of the Company on the first annual
meeting of shareholders subsequent to the date hereof.
11. By accepting the terms contained herein, you acknowledge and
represent that you are not bound by any restriction, covenant or other agreement
that would prohibit or otherwise restrict your employment with the Company.
12. This Agreement may be modified only by an instrument in writing
signed by each of us. This Agreement and your employment hereunder shall be
construed in accordance with the laws of the State of New York, applicable to
contracts to be performed entirely within New York State.
13. Any notice to be given hereunder shall be in writing and delivered
personally or by certified mail, postage prepaid, return receipt requested,
addressed to the appropriate party at the address indicated above.
<PAGE> 9
Mr. Edward Stolarski
April 25, 2000
Page 5
Kindly sign a copy of this letter indicating your agreement with respect
hereto.
Very truly yours,
FINANCIAL PERFORMANCE CORPORATION
By: /s/
---------------------------------
ACCEPTED AND AGREED TO:
/s/ Edward T. Stolarski
- ---------------------------
Edward T. Stolarski
Date: April 26, 2000
-----------------------
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