PEO Claims Services Division
Three-Tiered Proposal Overview — Initial Negotiation Round
Decision Framework & Ownership Overview
IRC Sec. 197 Asset Purchase is the preferred structure (benefits both parties)
ALCC, LLC (91% Renee / 9% Franklin IV)
Renee K. Bryant personally
Renee K. Bryant personally
Renee K. Bryant personally (not subject to 91/9 split)
What Is Being Offered & Why
The transaction is structured as an Executive Services and Non-Compete Arrangement — not a client contract acquisition.
Key Distinction
ALCC retains all client contracts. The non-compete delivers the strategic benefit of service relationship disruption without requiring contract assignment.
The non-compete creates market exclusivity without the complexity of contract transfers or assignment concerns.
If any of the 10 existing PEO clients are sold to Docks within 5 years:
Revenue neutral for Docks — paid to Renee as commission
Lost Income Analysis & Compensation Rationale
| Business Line | Annual Revenue | Status |
|---|---|---|
| PEO Claims Services (10 Active Clients) | $541,200 | PROHIBITED |
| Recorded Statements (FFVA) | $72,000 | PROHIBITED |
| Recorded Statements (Other Carriers) | $10,000–$20,000 | PROHIBITED |
| Drug Testing & Field Investigations | $100,000–$200,000 | PROHIBITED |
Non-compete compensation is calculated using multiple income capitalization approaches:
5.5x–7.0x ARR valuation reflects the premium nature of recurring contracts
Recorded Statements: 3–4 year income capitalization
Drug Testing & Field: 2.5–3 year income capitalization
Opportunity Cost & Freedom of Business Premium
Buyer Positioning & Continuity Value
Currently owned by Docks Sutherland — Active ALCC Client
Final stages of acquisition by Docks — Active ALCC Client
No current buyer relationship — Pure new business opportunity
Renee continues servicing existing clients, building national infrastructure, and maintaining proven service quality.
Non-compete removes Renee from the market entirely — Docks gains exclusive focus and complete competitive elimination.
If Docks declines: Loses only the incumbent — yet a proven claims operator already embedded in their own entities.
Docks Sutherland is building a national PEO services platform. Acquiring Renee's embedded position and market exclusivity accelerates this strategy while eliminating a key competitor from the market.
Value Creation Analysis
| PEO ARR | $541,200 |
| Renee's Compensation [EST] | ($95,000) |
| Support Staff [EST] | ($42,000) |
| Software & Technology [EST] | ($12,000) |
| Corporate Overhead [EST] | ($32,400) |
| EBITDA — PEO Division [EST] | $359,800 |
Revenue stays with ALCC under non-compete restrictions — Renee cannot service these clients independently.
Renee's compensation moves from ALCC cost structure to Docks employment budget ($425K–$450K).
Exclusive services PLUS removal of $723K–$833K gross business competitor from the market entirely.
The EBITDA multiple on the PEO Claims System (5.5x–7.0x ARR) embedded in the lump-sum payment represents fair market valuation for a recurring revenue business with documented client retention.
Executive Services Framework
Executive Employment Agreement
3% stake + standard option plan
Minimum 3-year, cause-only termination
12-month severance protection
Senior executive package
Renee Retains ALCC
NONE
Full Non-Compete (Mid-Tier)
Non-Compete + Employment
$425,000
5% + 3-year vesting
10–15% of base
Minimum 3-year, cause-only
5 Years
$135,000
IRC Sec. 197 Asset Purchase — Capital gains treatment
| PEO Claims System Goodwill (5.5x ARR) | $2,976,600 |
| Recorded Statements Business (3-yr cap) | $261,000 |
| Drug Testing & Field (2.5-yr cap) | $375,000 |
| Entrepreneurial Optionality Premium | Embedded |
| TOTAL | $4,000,000 |
Full Non-Compete (Strategic Premium)
Strategic Premium Package
$450,000
8% + Participation Rights
Minimum $50,000
Portfolio growth + $50K+
Operational Leadership Committee
3-yr + auto-renewal
180-day notice required — strongest seller protection
| PEO Claims System Goodwill (7.0x ARR) | $3,788,400 |
| Recorded Statements (4-yr capitalization) | $348,000 |
| Drug Testing & Field (3-yr capitalization) | $450,000 |
| Strategic Premium (Niche + First-Mover) | Embedded |
| Control & Exclusivity Premium | Embedded |
| TOTAL | $5,200,000 |
Side-by-Side Analysis
| Feature | Proposal A | Proposal B | Proposal C |
|---|---|---|---|
| Structure | Employment Only | Non-Compete + Employment | Non-Compete + Strategic Premium |
| Non-Compete Payment | None | $4,000,000 | $5,200,000 |
| Annual Base Salary | $400,000 | $425,000 | $450,000 |
| Equity | 3% + Options | 5% + 3-yr Vest | 8% + Participation Rights |
| Renee Keeps ALCC? | YES | NO | NO |
| Conversion Right | YES (18 months) | N/A | N/A |
| Client Acquisition Credit | 5% additive fee | 5% price credit | 5% price credit |
| Performance Bonus | — | 10–15% of base | Portfolio growth + $50K+ |
| 90-Day Transition | Under salary | $135,000 | $135,000 + signing bonus |
| Advisory Role | No | No | YES |
| Franklin IV Return (9%) | $0 | ~$360,000 | ~$468,000 |
Proposal A
Conversion Right — locked price for 18 months
Proposal B
IRC Sec. 197 Asset Purchase structure
Proposal C
Strategic Premium + first-mover + full exclusivity
5-Year Outlook — Scenario Analysis
| Scenario | Y1 | Y2 | Y3 | Y4 | Y5 | 5-Yr Total |
|---|---|---|---|---|---|---|
| Baseline (0%) | $541.2K | $541.2K | $541.2K | $541.2K | $541.2K | $2,706,000 |
| Conservative (+3%) | $541.2K | $595.3K | $649.4K | $703.6K | $703.6K | $3,193,080 |
| Aggressive (+5%) | $541.2K | $649.4K | $703.6K | $757.7K | $811.8K | $3,463,680 |
All scenarios assume 10 active PEO clients maintained at $541,200 ARR
Claims Intake & Triage SOPs
Consistent service delivery framework
Client-Specific Protocol Library
Documented process repository
Vendor & Adjuster Network
Nationwide coverage capability
Reporting Templates
Standardized performance monitoring
Technology & Platform Access
Immediate operational capability
90-Day Transition Support
Seamless knowledge transfer
SOP library in
written form
3-year employment
term
18-month succession
coordinator target
Cause-only
termination
Documentation Index
Transaction Framework
Reflecting true value of restricted income streams ($723K–$833K annual foregone)
Reflecting role as operational foundation
Aligning long-term interests with buyer's success
Well-documented arrangement for all parties
The transaction structure is designed to deliver maximum value to Docks while ensuring the Bryant family's interests are protected through equity participation and fair market compensation for all restricted income streams.
"We welcome Docks Sutherland's response and are prepared to enter due diligence quickly.
This proposal represents a unique opportunity to acquire embedded PEO claims expertise
while eliminating a key market competitor — creating immediate strategic value."
MARCH 2026
CONFIDENTIAL — FOR NEGOTIATION PURPOSES ONLY — NOT A BINDING COMMITMENT