Fill and Sign the U S Vision Inc Form S 1a Received 12021997 100417

5.04[2] Sample Recommending Partner Compensation FORMULA SCHEDULE FOR DISTRIBUTION OF EARNINGS TO PARTNERS OF _______________, L.L.P. 1.0 GENERAL STATEMENTExcept as provided in Section 3.1 below, no Partner of the Firm (except a Fixed Income or a Non-Formula Partner) shall be entitled to a fixed share of the net profits of the Firm. Irrespective of the method of calculating a Partner's participation, it is understood that such participation is paid solely in exchange for personal services rendered and responsibilities undertaken by said partner. 2.0 DEFINITIONS The following terms shall have the respective meanings assigned to them for all purposes in this Formula Schedule unless the context in which they are used clearly requires another interpretation: 2.1 "Gross fees" shall mean the fees received from clients for legal services rendered by the Partners and associates of the Firm or by the Firm as a whole, after reduction for recoupment of client disbursements and fees of outside counsel. Remuneration received by a partner from writing, teaching or lecturing, from acting as an officer, director, trustee or executor, or from other personal service activities unrelated to the practice of law shall not be included in this gross fees. Such remuneration for non-legal services shall belong exclusively to the Partner who performs such services in his individual capacity and not to the Firm or any other Partner thereof. However, in computing the participation of any partner for purposes of Section 3.1 of this Formula Schedule, but for this and for no other purpose, his remuneration for non-legal services received during the firm's fiscal year shall be added to his work credit. 2.2 "Work credit" shall mean an amount equal to eighty-five percent (85%) of the gross fees allocated to a Formula Partner or associate for legal services rendered by said individual. 2.3 "Associate profit" shall mean the excess of all associates' work credit over all associates' direct expenses. 2.4 "Associate loss" shall mean the excess of all associates' direct expenses over all associates' work credit. 2.5 "Client credit" shall mean the amount added to the participation of a Formula Partner or granted to the Firm based on the clients attributable to such Partner or to the Firm. 2.6 "Participation" shall mean the total share of each Formula Partner in the profits of the Firm. 2.7 "Associate" shall mean any lawyer hired by the Firm on a full time or hourly basis including Fixed Income, or Non-Formula Partners and any paraprofessionals and law clerks who may be hired by the Firm. 3.0 PARTICIPATION OF PARTNERS 3.1 Minimum Participation Each Formula Partner is guaranteed a minimum participation on an annualized basis of $___________ in each fiscal year or portion thereof of service as a partner in the Firm, plus an additional $___________ on an annualized basis for each subsequent fiscal year of service as a partner in the Firm up to a maximum of $___________. For each fiscal year in which a Partner's normal participation, as defined in Section 3.2 of the Formula Schedule, does not equal or exceed his guaranteed minimum participation, except during the first fiscal year or portion thereof in which he is a Partner, his guaranteed minimum participation for the next fiscal year shall be reduced by $___________. If, for three successive fiscal years, a Partner's normal participation fails to equal or exceed his guaranteed minimum participation, said Partner will not, thenceforth, be entitled to a guaranteed minimum participation. For purposes of this paragraph 3.1, if a person is a Formula Partner for only a portion of a fiscal year, such portion shall be treated as a fiscal year; provided, however, that such Formula Partner's guaranteed minimum participation for such fiscal year shall be that pro rata portion of the full year's guaranteed minimum participation which corresponds to his actual period of partnership during such fiscal year. The minimum participation guaranteed a Partner shall be paid pro rata by the other Partners based on the excess of the normal participation pursuant to paragraph 3.1 below of each such Formula partner over his guaranteed minimum participation, until such excess is exhausted. If Partnership profits are not sufficient to pay each Partner his guaranteed minimum participation, the profits of the Firm shall be distributed among the Partners in the ratio of their guaranteed minimum participations. 3.2 Normal Participation The normal participation of each Formula Partner for services rendered shall be the sum of the following: (a) His work credit; (b) His client credit; (c) A per capita share of other Firm profits determined pursuant to paragraph 3.3 below; and (d) A per capita share of associate profit; minus the sum of the following: (e) His gross direct expenses; (f) His gross per capita expenses; (g) A per capita share of associate loss; (h) A per capita share of other Firm loss determined pursuant to paragraph 3.3 below; and (i) His share of New York City Unincorporated Business Tax (U.B.T.). The method of allocation of U.B.T. shall be: [Partner Share of Income before U.B.T. â Total Formula Partner Income before U.B.T.] x Total 3.3 Other Firm Profits or Losses Each Formula Partner shall be entitled to receive, or shall be charged with, an equal share of the other Firm profits or losses. Other Firm profits or losses shall be composed of the following: (a) Firm client credit; (b) Interest, telephone income, photocopying income or other receipts earned by the Firm and not included in gross fees; less (c) Any item of income or expense not specifically otherwise allocated under this Formula Schedule. 3.4 Partial Years In the case of an individual who becomes a Formula Partner during a fiscal year, his share of all per capita items shall be based on the number of months remaining in such year. 4.0 GROSS FEES; EXPENSES 4.1 Gross Fees Determination The work credit of each Formula Partner or associate and the client credit of each Formula Partner shall be determined at the end of each fiscal year. Prior to the date that a client is billed, the Partner responsible for the billing must discuss with each other Partner whose time is included in the bill any proposed reduction which effectively reduces the billing rate of such other Formula Partner. Where a flat fee is billed, the prior approval of each Formula Partner whose time is included in the bill must also be obtained if he will effectively receive less than his hourly billing rate for time spent by him on the matter. In the event of any such reduction, the fee received by the Firm will be divided by mutual agreement among the Formula Partners working on the matter, taking into consideration the number of hours spent by each lawyer and their respective billing rates. If no such mutual agreement can be reached, the matter shall be referred to the Executive Committee for decision. If the fees of an associate are to be reduced to an amount which is more than twenty percent (20%) below to the product of the number of hours spent by him on any matter times his hourly billing rate, the bill must be submitted to the Executive Committee for review and the latter is empowered to reallocate the fees received by the Firm in the event it finds the allocation to be unfair. 4.2 Expenses In order to determine as nearly as possible the actual expenses of each lawyer, the total expenses of the offices of the partners of the Firm shall be determined and allocated to each Formula Partner and associate, on as fair and objective a basis as possible. All items of expense other than those expenses which are specifically otherwise provided for in this Formula Schedule shall be divided per capita among the Formula Partners of the Firm. The following bases of allocating expenses to the Formula Partners and associates of the Firm shall be employed: Direct (to be allocated directly to a Formula Partner or associate. Per Capita (to be allocated to all Formula Partners on a per capita basis. The following are examples of per capita and direct expenses: The salaries, bonuses, fringe benefits, retirement plan contribution and agency fees of secretaries to a Formula Partner; Partner's individual office development and dues account and his health and life insurance premiums. Basis: Direct to such Formula Partner Secretarial (other than associates' or Formula Partners' secretaries) and general administrative salaries, rent, electricity, general office expense, office supplies, maintenance, telephone, insurance (Workmen's Compensation, etc.), depreciation of office equipment, books, depreciation of remodeling and other leasehold improvements, and fees paid to counsel retained to represent the Firm or a Partner of the Firm on a matter affecting the Firm. Basis: Per Capita to all Formula Partners Salaries, bonuses, fringe benefits, retirement plan contributions and agency fees of an associate and his secretary. Basis: Direct to such Associate