Document:

exv10w2

 

Exhibit 10.2

Confidential

Asset Acceptance Capital Corp.

2008 Annual Incentive Compensation Plan for Management

General

     Each year the Compensation Committee (the “Committee”) of the Board of Directors of Asset
Acceptance Capital Corp. (the “Company”) establishes an annual incentive compensation plan (the
“Plan”) for key executives and certain other management level associates (the “Plan
Participant(s)”) of the Company.

     The Plan will establish for each Plan Participant a bonus target (the “Bonus Target”) equal to
a specified percentage of Base Salary (as defined below). The Bonus Target will be set by the
Committee at a level consistent with each associate’s responsibilities. As used in this Plan,
“Base Salary” shall be the Plan Participant’s base compensation (excluding incentive and any other
taxable compensation) paid during 2008. For individuals who become Plan Participants during 2008,
Base Salary shall be the base compensation (excluding incentive and any other taxable compensation)
paid in 2008 beginning on the date the individual first becomes eligible to participate in the
Plan.

     The Plan will be comprised of two parts: (a) Financial Objectives; and (b) Personal
Objectives. Bonus amounts will be computed separately for achievement of Financial Objectives and
Personal Objectives, as set forth below under the captions “Financial Objectives” and “Personal
Objectives”, respectively. The bonus earned shall be the sum of the bonus calculated under the
Financial Objectives portion of the Plan and the bonus calculated under the Personal Objectives
portion of the Plan. Payments under the Plan will be made after receipt and approval by the Audit
Committee of the annual audited financial statements of the Company for the year ending
December 31, 2008. A Plan Participant will not be considered to have earned a bonus unless the
Plan Participant is employed by the Company on the date the Audit Committee approves the annual
audited financial statements for 2008.

     Payments shall be made no later than 2-1/2 months after the end of the fiscal year to which
the bonus amount relates (or such later time as is allowed in accordance with Treasury Regulation
1.409A-3(d)) in order to preserve the exemption from Section 409A of the Internal Revenue Code.

     The Compensation Committee recognizes the need of the Plan Participants to conduct themselves
in compliance with the Code of Business Conduct. In addition to the non-financial consequences
contained in the Code of Business Conduct, any violation of the Code of Business Conduct shall
result in complete forfeiture of any bonus which would otherwise be earned under this Plan.

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Financial Objectives

     The bonus earned under the Financial Objective portion of the Plan shall be 50% of the Target
Bonus at achievement of the 2008 Financial Objective Goal, as defined below.

     The financial performance of the Company will be measured by Earnings Before Interest, Taxes,
Depreciation and Amortization (“EBITDA”), after accrual of all incentive compensation plan
payments. EBITDA will be determined in a manner consistent with the definition of EBITDA contained
in Exhibit 1.

     For the fiscal year ending December 31, 2008, the financial objective goal will be set at $
XXX,XXX,XXX* (the “2008 Financial Objective Goal”), which equals XXX* percent of fiscal 2007 actual
EBITDA. The minimum goal will be set at $ XXX,XXX,XXX* (the “Minimum Goal”), which equals XXX*
percent of fiscal 2007 EBITDA. The maximum goal will be set at $XXX,XXX,XXX* (the “Maximum Goal”),
which equals XXX* percent of fiscal 2007 EBITDA.

     If the 2008 actual EBITDA achieved equals the Minimum Goal, the bonus earned under the
Financial Objective portion of the Plan shall be 25 percent of the Target Bonus. If the actual
EBITDA for 2008 is equal to or greater than the Maximum Goal, the bonus earned under the Financial
Objectives portion of the Plan will be 100% of the Target Bonus. For actual EBITDA achieved
greater than the Minimum Goal and less than the Maximum Goal, the percentage of the Target Bonus
shall be pro-rated consistent with the following examples. Example 1). If actual 2008 EBITDA
achieved is XXX* percent of 2007’s EBITDA, the bonus earned under the Financial Objectives portion
would be 37.5 percent of the Target Bonus. Example 2). If the actual 2008 EBITDA achieved is XXX*
percent of 2007’s EBITDA, the payout would be 80 percent of the Target Bonus.

Personal Performance Objectives

     Each Plan Participant may earn up to a maximum of 50% of his or her Target Bonus based on the
achievement of Personal Objectives.

     Personal Objectives should be measurable goals jointly developed by the Plan
Participant and his/her immediate supervisor (subject to approval by the Chairman, President and
Chief Executive Officer or his designee(s), and for certain participants, the Committee). The
percentage earned under Personal Performance will be calculated based on a rating from 0 to 4,
whole numbers only, of completion of each assigned objective, recognizing the determination of such
percentage completion is in part subjective. If there is any disagreement as to the scoring of
each assigned objective, the determination of the Chairman, President and Chief Executive Officer
or his designee(s) shall be final and binding.

 

			
	*	 	Portions of this exhibit have been omitted pursuant to
Asset Acceptance’s request to the Secretary of the Securities and Exchange
Commission for confidential treatment pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.

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     No Plan Participant will be eligible to earn any part of his or her bonus based on the achievement
of Personal Objectives unless 2008 EBITDA achieved by the Company equals or exceeds the 2007 EBITDA
achieved by the Company of $171,397,083.

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Exhibit 1

     EBITDA: The net income (loss) of the Company plus interest expense-net, income taxes,
depreciation and amortization (including amortization of purchased receivables). The determination
of EBITDA, for purposes of this Plan, shall be made by the Committee in accordance with generally
accepted accounting principles in effect in the United States, applied on a consistent basis
(“GAAP”); provided, however, that EBITDA shall be adjusted for this purpose (A) to exclude net
gains and losses on the disposal of assets and other non-operating income or expense items; (B) to
exclude EBITDA generated from acquisitions of new businesses or companies during the year (an
acquisition of a new office would not be deemed to be a material acquisition); and (C) for other
items in the discretion of the Committee. EBITDA will be determined after accrual for all bonuses,
including bonuses to be paid under this and all other Company annual incentive compensation plans.

4exv10w1

 

Exhibit 10.1

	 	 	 	 	 	 	 
	Peerless Systems

	 	2381 Rosecrans Avenue
	 	voice:
	 	310. 536. 0908
	Corporation

	 	El Segundo, California
	 	fax:
	 	310. 536. 0058
	 

	 	90245	 	 	 	 

April 23, 2008

Cary A. Kimmel

75 Monticello

Irvine, CA 92720

Dear Cary:

     As we have discussed, we have recently completed a review of our plans and
strategies for the remainder of Fiscal Year 2009. Unfortunately, that review led us to
the conclusion that we are unable to retain all of our valued contributors. I am truly
sorry to inform you that your position is one of those being eliminated as a result of a
reduction in force. Consequently, your last day of employment and your last day serving
as an officer of Peerless Systems Corporation and Director of the Board of Directors of
Peerless K.K. are today, April 23, 2008.

     Out of appreciation for your efforts, the following confidential Separation
Agreement and Release details the proposed terms of your departure from Peerless Systems
Corporation.

     1. Your last day of employment is April 23, 2008. On your last day, you will receive
all compensation earned through Friday April 25, 2008 including any accrued vacation
time, less applicable withholdings required by law. In addition, your FY 2008 bonus
payment will be mailed to you on April 30, 2008. By your acceptance of this Agreement you
acknowledge that you have received all compensation due you as a result of your
employment with us.

     2. Within fourteen (14) days of executing this Agreement (providing you have not
revoked the Agreement) Peerless will provide you with six (6) months of severance at your
current rate of pay, minus applicable withholdings. Payments will be made every other
week on your regularly scheduled paydays until the full amount of severance has been
paid. By signing this Agreement, you acknowledge that this constitutes valuable
consideration and an amount above and beyond any sum otherwise owed to you by the
Company.

     3. Your company provided health care will terminate effective April 30, 2008.
However, as consideration for signing this agreement, Peerless will pay for the first six
(6) months of your COBRA premiums. After that initial company paid six month period, you
will then be eligible to purchase an additional twelve (12) months of health insurance
benefits at your own expense through the provisions outlined in COBRA. You will receive a
letter from IGOE and company, our COBRA administrator, detailing your rights and the
procedures for taking advantage of COBRA coverage. Even though Peerless may be paying

 

 

Separation Agreement

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your COBRA premiums, you must complete and return the COBRA forms to IGOE within the timeframe
indicated on the forms.

     4. You have ninety (90) days in which to exercise any vested options you may hold. As of
today, no additional options will vest. You remain bound by rules governing insider trading and are
prohibited from trading in Peerless shares if you are in possession of material non-public
information.

     5. You will return to Elliot Shirwo all files, records, reports, data, correspondence,
memoranda and other documents (including handwritten notes and drafts), key cards and all other
physical or personal property you received from the Company.

     6. You agree that you will strictly abide by the terms of your Non-Disclosure Agreement. Your
signature below confirms that you have reviewed this agreement to be certain you are aware of all
responsibilities and prohibitions it contains.

     7. You also acknowledge that this Agreement and all matters relating to negotiating and
carrying out this Agreement are confidential and you will not disclose the information to any third
party except your spouse, legal and tax advisor to the extent necessary to perform services, or as
required by law.

     8. You further agree not to malign or denigrate the Company to anyone including but not
limited to any employee, contractor, vendor or customer of Peerless, just as we will not malign or
denigrate you to potential employers. Should you violate this non-denigration clause, any severance
payments that may have been made to you must be reimbursed to Peerless. Furthermore, Peerless would
have the right to pursue all available remedies including damages and injunctive relief.

     9. By executing this agreement and in exchange for the benefits described above, you fully
release and discharge the Company including its officers, directors, partners, employees, parent
companies, subsidiaries, affiliates, shareholders, representatives and agents from any liability,
claim, damages, or cause of action arising out of or related to your employment relationship with
the Company or the termination of that employment. This includes, but is not limited to, any claim
for additional compensation of any type including salary or bonus, or any claim relating to any
local, state or federal labor regulations, or equal employment laws, wage laws, ordinances,
regulations or orders, such as claims under Title VII of the Civil Rights Act of 1964, the Family
Medical Leave Act, the Family Rights Act, the California Fair Employment and Housing Act and the
Age Discrimination in Employment Act, as amended by the Older Workers’ Benefit Protection Act of
1990 (OWBPA). It also includes any claim that you might wish to
assign or transfer to a third
party.

This general release includes known and unknown claims and thus you agree to waive Civil Code
Section 1542, which states:

“A general release does not extend to claims which the creditor does not know or suspect to
exist in his or her favor at the time of executing the release, which if known by him or her
must have materially affected his or her settlement with the debtor.”

 

 

Separation Agreement

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     10. You further acknowledge that this waiver specifically applies to rights or claims arising
under the Age Discrimination in Employment Act (ADEA), as amended by the Older Workers Benefit
Protection Act and that unless compelled by law you will not assist in or encourage the pursuit of
litigation against the Company by any other person or entity.

     11. This Agreement does not release claims that cannot be released as a matter of law,
including but not limited to claims under Division 3, Article 2 of the California Labor Code (which
includes indemnification rights). It also does not apply to rights or claims that may arise after
the date it is signed.

     12. With the exception of challenges under the OWBPA, your signature below confirms your
understanding that if you initiate, participate in, or in any manner seek relief by filing a
lawsuit or other claim, you must not only repay any severance provided, but must also pay all
attorneys’ fees incurred by those who must defend or otherwise respond to the suit or Claim on
behalf of Peerless Systems Corporation and any of its agents covered by this release unless
otherwise prohibited by law.

     13. Both you and Peerless understand and agree that neither paying severance, nor executing
this release is an admission of any liability whatsoever.

     14. Both you and Peerless hereby acknowledge that no promise or inducement has been offered or
made except those stated in this Agreement. This Agreement and your Non-Disclosure Agreement
contain all the terms and conditions by which each party agrees to be bound. If any individual
provision of this Agreement is found to be invalid or unenforceable then only that provision shall
be removed. All other provisions and the remainder of the Agreement will remain in force.

     15. You have forty-five (45) days in which to consider this offer, however, your consideration
of our offer will not change your separation date. The offer remains valid through June 7, 2008.
Executing the Agreement prior to the conclusion of the forty-five (45) day review period indicates
your intentional waiver of the remaining portion of the review period and a willingness to enter
into this Agreement voluntarily. Once you have signed the Agreement, you have seven (7) days to
revoke the Agreement. To be effective, this revocation must be in writing, and received by the
Human Resources Director at Peerless within seven (7) days after you have executed the Agreement.
No severance payments or other benefits described in this agreement will be due and owing until you
have signed this Agreement and your day revocation period has expired. By your signature below, you
acknowledge that you have received and reviewed Exhibit “A” which sets forth the criteria used for
selecting employees for participation in our reduction in force as well as a list of job titles and
ages of those employees eligible and ineligible for participation in this severance program.

     16. In the event you decide not to sign this letter, you will be terminated as of April 23,
2008 and receive only accrued vacation pay as provided by the “at-will” terms of your employment.
Your benefits would still terminate and your COBRA eligibility would begin, effective May 1, 2008.
You will continue to be bound by the terms of your Non-Disclosure and Agreement.

 

 

Separation Agreement

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     Your signature below confirms that you have had the opportunity to carefully review and
consider this Confidential Separation Agreement and Release and are knowingly, freely and
voluntarily entering into this Agreement.

     If the above terms and conditions are agreeable to you, kindly acknowledge your agreement by
signing in the space provided below and return it to Lisa Magowan, Human Resources. You may mail it
to 2381 Rosecrans Avenue, El Segundo, CA 90245 or fax it to 310-297-3286.

     Again, we thank you for your efforts on behalf of Peerless. I wish you well in your future
endeavors.

Respectfully,

Richard Roll

President and CEO

Agreed and Accepted:

	 	 	 	 	 
	/s/ Cary A. Kimmel

	 	4/23/08	 	 
	 

Cary A Kimmel

	 	 

Date

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