Exhibit 10.4
INCENTIVE COMPENSATION AGREEMENT
Agreement, dated as of May 3, 2002, between GP Strategies
Corporation, a Delaware corporation with principal executive offices at 0 Xxxx
00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxx X.
Xxxxxxx, residing at 000 Xxxx Xxxxxx Xxxx, Xxxxxxx Xxxxx, Xxx Xxxx 00000
("Employee").
WHEREAS, Employee is a founder of the Company and has for many years
been Chairman of the Board and Chief Executive Officer of the Company;
WHEREAS, Section 5(b) of the Employment Agreement, dated as of June 1,
1999, as amended (the "Employment Agreement"), between the Company and Employee
provides that the Company and Employee will negotiate in good faith to formulate
an annual incentive based compensation arrangement based on the Company
achieving certain financial milestones which will be fair and equitable to
Employee and the Company and its stockholders; and
WHEREAS, the Company desires to provide incentive compensation to
Employee in a manner that will closely align the amount of such compensation to
the interests of the Company's stockholders and the enhancement of stockholder
value.
NOW, THEREFORE, intending to be legally bound, and for and in
consideration of the mutual covenants set forth herein, the parties hereto agree
as follows:
1. Incentive Compensation. Employee shall be eligible to receive from
the Company up to five payments (each, an "Incentive Payment"). The Company will
pay Employee an Incentive Payment in an amount equal to $1 million on the first
date that each of the following events occurs:
(a) the closing price of the common stock, par value $0.01 per share,
of the Company on the New York Stock Exchange (the "Closing Price") equals or
exceeds, for at least 10 consecutive trading days, $5.40 (the "First Incentive
Payment"); provided that if the First Incentive Payment does not become payable
prior to the second anniversary of this Agreement, the First Incentive Payment
shall be paid on the date, if any, that the Second Incentive Payment (as defined
below) is paid;
(b) the Closing Price equals or exceeds, for at least 10 consecutive
trading days, $6.30 (the "Second Incentive Payment"); provided that if the
Second Incentive Payment does not become payable prior to the fourth anniversary
of this Agreement, the Second Incentive Payment shall be paid on the date, if
any, that the Third Incentive Payment (as defined below) is paid;
(c) the Closing Price equals or exceeds, for at least 10 consecutive
trading days, $7.20 (the "Third Incentive Payment");
(d) the Closing Price equals or exceeds, for at least 10 consecutive
trading days, $8.10; and
(e) the Closing Price equals or exceeds, for at least 10 consecutive
trading days, $9.00.
2. Set-off Against Loans. To the extent there are any outstanding
loans from the Company to Employee at the time an Incentive Payment is payable,
the Company will set off the payment of such Incentive Payment against the
outstanding principal and interest under such loans.
3. Termination. This Agreement will terminate on the earlier to occur
of (a) the fifth anniversary of the date hereof and (b) the date of termination
of Employee's employment with the Company (other than termination by (i) the
Company in breach of the Employment Agreement or (ii) Employee for Good Reason
(as defined in the Employment Agreement)). Notwithstanding anything set forth in
this Agreement to contrary, no Incentive Payment shall be payable after the
termination of this Agreement.
4. Employment. Notwithstanding anything set forth in this Agreement to
the contrary, nothing in this Agreement shall be construed as an agreement by
the Company to employ the Employee for any period of time and, except as
provided in the Employment Agreement, the Company shall have the right at any
time to terminate the Employee with or without cause.
5. Miscellaneous.
(a) The dollar amounts in Section 1 shall be equitably adjusted for
stock splits, stock dividends, and similar transactions.
(b) This Agreement shall not be assignable, in whole or in part, by
either party without the prior written consent of the other party, and any
attempted assignment without such prior written consent shall be void.
(c) This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, representations and understandings, written or oral,
of the parties.
(d) This Agreement may not be modified, amended, or supplemented
except by a writing signed by each of the parties hereto.
(e) This Agreement may be executed in counterparts each of which shall
be deemed an original but both of which together shall constitute one and the
same instrument.
(f) This Agreement shall be governed by and interpreted under the
internal laws of the State of New York, without regard to conflicts of laws
principles.
IN WITNESS WHEREOF, the parties have signed this Agreement on the date
first set forth above.
GP STRATEGIES CORPORATION
Xxxxx X. Xxxxxxxxx
President and Chief Financial Officer
Xxxxxx X. Xxxxxxx
