AMENDMENT TO EMPLOYMENT AGREEMENT
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THIS AMENDMENT ("Amendment"), dated as of July 26, 2001 to the Employment
Agreement (the "Agreement"), dated as of January 1, 2000, between THE XXXXX
XXXXXX COMPANIES INC., a Delaware corporation (the "Company"), and XXXX X.
XXXXXXXXXX, a resident of Scarsdale, New York (the "Executive")
W I T N E S S E T H:
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WHEREAS, the Executive and the Company are parties to the Agreement; and
WHEREAS, section 5 (c) of the Agreement provides for the Company to make
five annual premium payments which in the aggregate shall total approximately
$26,634,000 to a policy of the life of the Executive and to enter into a split
dollar life insurance agreement with the owner of such policy;
WHEREAS, Xxxxx Theummler and Alaska Trust Company, as Trustees of the
Xxxxxxxxxx 2000 Insurance Trust, u/a/d December 19, 2000 (the "Trust") acquired
from American General Life Insurance Company a life insurance policy on the life
of the Executive and his spouse, Policy Number VL1005095L, dated December 26,
2000 (the "Policy");
WHEREAS, the Trust, and the Company entered into a Split Dollar Life
Insurance Agreement, dated as of December 26th, 2000 (the "Split Dollar
Agreement");
WHEREAS the Split Dollar Agreement provides, inter alia, for certain
borrowings by the Trust and recovery by the Company of its actual premium
payments;
WHEREAS, the arrangement was premised on the understanding of the parties
as to the federal income tax consequences of the Split Dollar Agreement;
WHEREAS, subsequent to the purchase of the Policy the Internal Revenue
Service issues Notice 2000-10, which may provide for different tax consequences
to the Split Dollar Agreement, but the application of which to the Policy in not
now certain.
WHEREAS, the Executive and the Company wish to define their rights in the
event that the tax treatment of the Split Dollar Agreement is not as originally
anticipated; and
WHEREAS, THE Compensation Committee of the Board of Directors of the
Company has approved the terms of this Amendment;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and obligations hereinafter set forth, the parties hereto, intending
to be legally bound, hereby agree to amend the Agreement as follows:
Subsection ( c) of Section 5 of the Agreement is hereby amended by adding
at the end thereof the following:
"(iii) In the event that the Executive notifies the Company that, in the
opinion of the Executive's legal counsel, which counsel is reasonably acceptable
to the Company, it is likely as a result of the arrangements under the Split
Dollar Agreement that either (A) the Executive or the Trust will be treated as
receiving an interest-free loan from the Company, or (B) the Executive or the
Trust will be deemed to be taxable on accretions in the cash value of the
Policy, either at the time such accretions occur or upon the repayment to the
Company of its premium payments, then the Company and the Executive shall
negotiate in good faith to provide the Executive, in a form reasonably
acceptable to the Executive, an economic benefit substantially equivalent to
that which would have been provided by operation of the Split Dollar Agreement
under the tax principles set forth in the letter dated September 6, 2000 from
Xxxxxx X. Xxxxxxx of Xxxxxx Xxxxxxxx, LLP to Xxxxx X. Xxxxxx of the Company."
Except as provided above, all other terms and conditions of the Agreement
shall remain the same.
This Amendment may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the date first above written.
THE XXXXX XXXXXX COMPANIES INC.
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President -
Global Human Resources
/s/ XXXX X. XXXXXXXXXX
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Xxxx X. Xxxxxxxxxx
