EXHIBIT 10.5
LETTER AGREEMENT
May 1, 2002
Xx. Xxxx X. Xxx
000 Xxx Xxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Dear Xxxx:
This letter is intended to amend the Employment Agreement dated as of
August 24, 1998 between Volume Services America Holdings, Inc. (formerly VSI
Acquisition II Corporation) (the "Company") and yourself (the "Agreement").
Capitalized terms used herein and not defined have the meanings specified in the
Agreement.
1. TERM. Section 1 of the Agreement shall be amended to extend the Term
to the seventh anniversary of the Effective Date (i.e., through August 24,
2005). Accordingly, the current Section 1 shall be deleted in its entirety and
replaced with the following:
"1. TERM. The employment of the Executive under this Agreement
shall commence as of August 24, 1998 (the "Effective Date") and shall
continue through the seventh anniversary of the Effective Date (the
"Term"), subject to earlier termination as provided for in Section 4."
2. DUTIES. Section 2 of the Agreement shall be amended to provide that
you shall serve as Chairman of the Board of Directors of the Company.
Accordingly, Section 2(a) of the Agreement shall be deleted in its entirety and
replaced with the following:
"(a) During the Term, the Executive shall devote all of his
business time, effort and energies to the business of the
Company. The Executive shall be nominated and, when elected,
shall serve as a member and Chairman of the Board of Directors
of the Company (the "Board"). The Executive shall have such
authority and responsibilities, and shall serve in such
capacities with the Company's majority-owned subsidiaries and
affiliates, as are consistent with his position as Chairman
and from time to time assigned to him by the Board."
3. BASE SALARY. Section 3(a) of the Agreement shall be amended to
provide for half-salary during the extended term of the Agreement. Accordingly,
Section 3(a) of the Agreement shall be deleted in its entirety and replaced with
the following:
"(a) BASE SALARY. The Company shall pay the Executive an
annual salary of $465,000 through August 24, 2003 and
thereafter an annual salary of $232,500. The Executive's
annual salary shall be payable in accordance with the
Company's salary payment policies governing senior
executives."
4. BENEFITS. Section 3(d)(i) of the Agreement shall be amended with
respect to medical benefits so that the current Section 3(d)(i) shall be deleted
in its
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entirety and replaced with the following:
"(i) During the Term, the Executive shall be entitled to the
coverage or benefits under any and all employee benefit plans
maintained by the Company (including, without limitation,
medical insurance, life insurance, split-dollar life
insurance, long-term disability insurance and pension plans,
if any) to the extent permissible under the terms of the
plans. In addition, until the Executive reaches age 65, the
Company shall continue to provide the Executive and his spouse
and minor children with medical, hospitalization and dental
insurance comparable to that provided by the Company on the
date hereof, including up to $150,000 of the cost of providing
the current Exec-U-Care, SML Select and Blue Cross/Blue Shield
Executive Medical Cost Policy or similar products (the
"Additional Medical Benefits")."
5. TERMINATION BY THE EXECUTIVE FOR GOOD REASON. The definition of
"Good Reason" in Section 4(d) of the Agreement shall be amended to delete
Section 4(d)(ii) thereof.
6. CONSEQUENCES OF TERMINATION. Sections 5(b) and (c) of the Agreement
shall be amended, among other things, to take into account the extended term of
the Agreement. Accordingly, Section 5(b) of the Agreement shall be deleted in
its entirety and replaced with the following:
(b) DEATH OR DISABILITY. If the Executive's employment under
this Agreement is terminated pursuant to Section 4(a) due to
death or Disability, the Executive shall not thereafter be
entitled to receive any salary, bonus or other payments or
benefits under this Agreement, except that the Executive or
his estate (as the case may be) shall be entitled to receive
the following: (a) payments pursuant to Section 3(a) of salary
for the balance of the Term, as and when they would be payable
absent such termination; (b) reimbursement pursuant to Section
3(c) of expenses incurred through the date of termination; (c)
except as provided in subparagraph (e) of this Section
concerning all life insurance benefits, benefits, at the then
current employee rates, pursuant to Section 3(d)(i) for the
balance of the Term, provided that (i) nothing herein shall
require the Company to provide Additional Medical Benefits if
the Executive dies or reaches age 65; (ii) the Executive, his
spouse and/or minor children will make a "COBRA" election if
requested by the Company; and (iii) the Company shall not be
required to provide coverage when COBRA is not available; (d)
accrued vacation (to the extent salary payable under
subparagraph (a) of this Section is less than the amount
accrued) and (e) assignment of title to any life insurance
policy covering the life of the Executive, after which time
the Executive shall be fully responsible for all costs of such
policy due and payable after termination of his employment
(and provided that, in the event such policy is a "split
dollar" policy or otherwise evidences an ownership interest by
the Company, the Company shall waive its right to recover its
interest therein).
In addition, Section 5(c) of the Agreement shall be deleted in its
entirety and replaced with the following:
(c) OTHER TERMINATIONS. If the Executive's employment under
this Agreement is terminated (i) by the Company pursuant to Section
4(c) or (ii) by the Executive pursuant to Section 4(d), the Executive
shall
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May 1, 2002
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not thereafter be entitled to receive any salary, bonus or
other payments or benefits under this Agreement, except that
the Executive shall be entitled to receive the following: (a)
payments pursuant to Section 3(a) of salary for the balance of
the Term, as and when they would be payable absent such
termination; (b) reimbursement pursuant to Section 3(c) of
expenses incurred through the date of termination; (c) except
as provided in subparagraph (e) of this Section concerning all
life insurance benefits, benefits, at the then current
employee rates, pursuant to Section 3(d)(i) for the balance of
the Term, provided that (i) nothing herein shall require the
Company to provide Additional Medical Benefits if the
Executive dies or reaches age 65; (ii) the Executive, his
spouse and/or minor children will make a "COBRA" election if
requested by the Company; and (iii) the Company shall not be
required to provide coverage when COBRA is not available; (d)
accrued vacation (to the extent salary payable under
subparagraph (a) of this Section is less than the amount
accrued) and (e) assignment of title to any life insurance
policy covering the life of the Executive, after which time
the Executive shall be fully responsible for all costs of such
policy due and payable after termination of his employment
(and provided that, in the event such policy is a "split
dollar" policy or otherwise evidences an ownership interest by
the Company, the Company shall waive its right to recover its
interest therein).
7. NOTICES. Section 7(a) of the Agreement shall be amended to provide
that notices to the Executive shall be made to the address set forth above and
notices to the Company shall be made in the name of Volume Services America
Holdings, Inc. rather than VSI Acquisition II Corporation.
Except as specifically amended as set forth herein, the Agreement will
remain in full force and effect.
If the foregoing is acceptable to you, kindly countersign one copy of
this letter where indicated below and return it to the undersigned.
Sincerely yours,
Volume Services America Holdings, Inc.
By: /s/ Xxxxx X. Xxxxxxxxxx
Its: General Counsel and Secretary
Agreed to and accepted:
/s/ Xxxx X. Xxx
___________________________
Xxxx X. Xxx
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