Exhibit 10.02
AMENDMENT TO EMPLOYMENT AGREEMENT
The Compensation Committee of the Board of Directors has reviewed and
approved the following amendments to the Employment Agreement dated as of
October 20, 1994 between Comdisco, Inc. and Xxxx X. Xxxxxx, which amendments
include a grant of Performance Units by the Committee of the Comdisco, Inc. 1992
Long-Term Stock Ownership Incentive Plan (the "92 Plan").
1. SALARY
The fixed salary as set forth in Section 3 of the Employment Agreement
shall be increased from $433,000 to $550,000 per year.
2. INCENTIVE COMPENSATION
The incentive compensation as set forth in Section 4 of the Employment
Agreement shall be revised as follows for the 1996 fiscal year:
(i) one percent (1%) of Comdisco's fiscal 1996 pre-tax earnings between
$130 million and $175 million, and (ii) two percent (2%) of pre-tax earnings in
excess of $175 million.
As an example, if Comdisco has pre-tax earnings of $180,000,000 in
fiscal 1996, the annual incentive compensation shall be $550,000.
3. ANNUAL STOCK OPTION INCENTIVE
If Comdisco achieves its 1996 Pre-Tax Earnings of $100 million, you
will also be entitled to a stock option grant of 11,658 shares at the closing
price on September 30, 1996. These options would vest at the rate of 33.3% per
year over a three year term.
If the Pre-Tax Earnings achieved is more than $100 million, then the
number of shares granted will be based on the percentage of (i) the Pre-Tax
Earnings achieved divided by (ii) the Pre-Tax Earnings of $100 million.
Notwithstanding the foregoing, there shall be a cap of 20,984 options to be
awarded under this section.
4. LONG-TERM PERFORMANCE UNIT GRANT
The Committee of the 92 Plan hereby awards you with 366 Performance
Units.
a. Performance Objective and Performance Period
The Committee has set a target Performance Objective that Comdisco's
"Total Shareholder Return" (as defined below) be ranked at or above the 50th
percentile of the Total Shareholder Return of all companies contained in the S&P
500 for the period running from October 2, 1995 through September 30, 1998 (the
"Performance Period").
"Total Shareholder Return" is defined as the sum of the stock price
appreciation plus dividends (reinvested) through the Performance Period.
b. Determination of Performance Unit Value
The actual Performance Unit Value will be determined based upon
Comdisco's Total Shareholder Return over the Performance Period. The target
Performance Unit Value has been set at $500. The actual Performance Unit Value
will be determined by multiplying the target Performance Unit Value times the
Performance Percentage specified in the following table:
TSR % Rank Performance Target Unit Actual Unit
in S&P 500 % x Value = Value
---------- ----------- ----------- -----------
below 50th 0% $500 = $ 0
50th 100% 500 500
55 150 500 750
60 200 500 1,000
65 260 500 1,300
70 320 500 1,600
75 390 500 1,950
80 460 500 2,300
85 530 500 2,650
90+ 600 500 3,000
c. Method of Distribution
Within 15 days of the date of this Agreement, you must decide upon one
of the following distribution methods by signing the Election Statement attached
hereto:
i. Cash Distribution - You may elect to have 100% of the actual
Performance Unit Value paid in cash (less applicable taxes).
ii. Restricted Stock - You may elect to have 100% of the actual
Performance Unit Value paid in the form of Restricted Stock.
In such event, the actual Performance Unit Value will be
multiplied by 120% and the product thereof will be used to
acquire Restricted Stock based on the closing price of
Comdisco's stock on September 30, 1998.
d. Restrictions
The Performance Unit Award is conditioned upon (i) your continuing as
an employee throughout the Performance Period and (ii) if you have elected to
receive Restricted Stock, your continuing as an employee for an additional one
year beyond the Performance Period. The effects of a termination of employment
within these periods are set forth in Section 14 of the 92 Plan.
e. Exercise of Performance Units
Performance Units may be exercised by delivery to the Secretary of
Comdisco of written notice of intent to exercise a specific number of
Performance Units.
f. Incorporation of 92 Plan Provisions
This award of Performance Units shall incorporate the terms and
conditions of the 92 Plan.
g. Acceptance
By execution of the attached Election Statement, you accept the terms
and conditions of this Performance Unit Grant.
5. CASH TO OPTION CONVERSION ALTERNATIVE.
Within 15 days of the date of this Agreement, you may elect to convert
cash compensation into stock options. You may elect to convert cash compensation
paid under Base Salary (Section 3 of the Employment Agreement), Annual Cash
Incentive (Section 4 of the Employment Agreement) and Long-Term Performance
Units into stock options on a one for two basis. You must elect to forego cash
compensation equally from the above three sources in $1,000 increments. For each
$1,000 foregone, you will receive stock options with an "option value" of
$2,000.
If you make this election, you will receive a stock option grant at the
closing price of Comdisco stock on the date the election notice is received. The
following example will illustrate this alternative.
September 29, 1995
- Election to forego $10,000 each from Salary, Annual Cash
Incentive and Performance Units
- Comdisco stock closes at $30.00
- $30,000 foregone x 2 = $60,000
- Option Value = $30.00/3 = $10.00
- $60,000/$10.00 = 6,000 options granted at $30.00
- Vests at 20% per year commencing 9/30/96
This agreement shall not be construed to give you any employment
rights.
Dated this 29th day of September, 1995.
/s/ Xxxxx Xxxxxxx /s/ Xxxx Xxxxxx
On behalf of the Committee Xxxx Xxxxxx
ELECTION STATEMENT
The undersigned hereby acknowledges receipt of the Amendment to
Employment Agreement, a copy of the 1992 Long-Term Stock Ownership Incentive
Plan, and copies of Comdisco's latest financial statements.
Performance Unit Method of Distribution
Pursuant to Section 4, I elect the following method of distribution for
any Performance Units:
i) Cash Distribution ___________
please initial
ii) Restricted Stock ___________
please initial
Cash to Option Conversion Alternative
Pursuant to Section 5, I elect to convert the following cash
compensation components into stock options:
Base Salary $50,000
Annual Cash Incentive $50,000
Performance Units $50,000
By:_________________________
Xxxx Xxxxxx
Date: _______________________
