Form of Non-Negotiable Certificate Representing an Employee Participant Interest in the Daily Journal Corporation (DJC) Plan for Supplemental Compensation to an Employee as long as that Employee Remains Employed by DJC or one of its Subsidiaries, Based on Pre-tax Earnings of DJC and its Subsidiaries on a Consolidated Basis
Form of Certificates Issued Under the Management Incentive Plan
Representing an Employee Participant Interest in the
Daily Journal Corporation (“DJC”) Management Incentive Plan
to an Employee, as long as that Employee Remains Employed by DJC or one of its Subsidiaries,
based on Earnings of DJC and its Subsidiaries on a Consolidated Basis (“DJC Consolidated”)
This non-negotiable certificate represents the right of (the “Employee”) to receive, in addition to all other compensation due or awarded:
1. In December [YEAR], ___________ / 1,805,053 of the earnings of DJC Consolidated for the year ending September [YEAR], before taxes, workers’ compensation expenses, supplemental compensation expenses, realized and unrealized gains or losses on investments and any write-downs of unrealized losses on investments; plus
2. In December of each of the following nine years, the same fraction of the earnings of DJC Consolidated for the year ended the preceding September 30, before taxes, workers’ compensation expenses, supplemental compensation expenses, realized and unrealized gains or losses on investments and any write-downs of unrealized losses on investments.
If more shares of DJC are issued for consideration (e.g., in a merger or public offering), the denominator of the Employee’s fractional interest will be increased by the number of shares issued, effective with the first payment due thereafter, to reflect the share increase. Both the numerator and the denominator of the fraction will be appropriately adjusted to reflect any changes in shares outstanding which occur without additional consideration to DJC, as in stock splits and stock dividends.
No additional payments will be made to the Employee under this or any other certificate (all of which shall expire) after the employee either (1) shall have left the employ of DJC, prior to the Employee’s reaching age 65, for any reason whatsoever (including but not limited to being unreasonably fired by DJC prior to reaching age 65) or (2) directly or indirectly enters the employ (either as a direct or indirect employee or direct or indirect independent contractor) of any competitor of DJC or any of its subsidiaries whether such employment occurs before or after the Employee reaches age 65. If this certificate has not expired prior to the time of the Employee’s death, payments will continue to be made under this certificate (and any other unexpired certificates) to the Employee’s beneficiaries until expiration. Otherwise, all certificates are non-transferrable.
Compensation to the Employee under this certificate, and other such certificates issued to the Employee (and other employees), shall not be deducted in making earnings computations for the purpose of the Plan. Earnings computations, for purposes of the Plan, shall be reasonable approximations made by DJC to facilitate convenient and economical accounting practices and will be final and binding on the Employee.
Payments to be made under this non-negotiable certificate are in addition to payments to be made under unexpired certificates, if any, issued to the Employee in prior years.
IN WITNESS WHEREOF, this certificate is executed as of [DATE].
DAILY JOURNAL CORPORATION