EXHIBIT 10.4
FIRST AMENDMENT TO
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This FIRST AMENDMENT TO EMPLOYMENT AND NON-COMPETITION
AGREEMENT (this "First Amendment"), made and entered into this 9th day of
February, 1996 but effective for all intents and purposes as of December 2,
1994, by and between De-Ro/Suncoast, Inc., a Delaware corporation ("Newco") and
Xxxxx Xxxxxxx (the "Employee"),
WITNESSETH:
WHEREAS, the parties hereto have entered into an Employment and
Non-Competition Agreement dated as of December 2, 1994 (the "Original Employment
Agreement").
WHEREAS, the parties desire to correct certain provisions of the Original
Employment Agreement.
NOW, THEREFORE, in consideration of the mutual terms conditions and
covenants set forth herein, and intending to be legally bound, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS. Any initially-capitalized term contained herein
and not otherwise defined herein shall have the meaning given such term in the
Original Employment Agreement.
SECTION 2. AMENDMENT TO ORIGINAL EMPLOYMENT AGREEMENT. Section 4 of the
Original Employment Agreement is hereby deleted and restated in its entirety to
read as follows:
SECTION 4. COMPENSATION.
(a) DEFINITIONS. For purposes hereof, the term "Before-Tax
Income" for any given fiscal year shall mean the earnings of Newco
before all federal income taxes, as reflected on the statements of
income of the Company prepared in connection with the audited annual
consolidated financial statements of Xxxxxx International, Inc. (the
"Financial Statements"), which Financial Statements shall deduct
from Before-Tax Income any payments made to Xxxxxx under the
Management Contract (as defined in the Suncoast Purchase Agreement).
For purposes hereof, the term "Audit Date" shall mean the date of
completion of the audit of the consolidated financial statements of
Xxxxxx as of and for the fiscal year ending September 30, 1995 and
for each subsequent fiscal year to and including September 30, 2002.
In no event shall the Audit Date be later than 120 days after the
end of the applicable fiscal year.
(b) BASE SALARY. For all services rendered by Employee in any
capacity during his employment under this Agreement, including,
without limitation, services as an executive, officer, director, or
member of any
committee of Newco or of any subsidiary or division thereof, Newco
shall pay Employee as compensation a salary at the rate of not less
than One Hundred Fifty Thousand Dollars ($150,000) per annum. Such
salary be payable in accordance with the customary payroll practices
of Newco, but in no event less than semi-monthly, and shall be
subject to applicable withholding and other taxes. During the period
of this Agreement, Employee's salary shall be reviewed at least
annually. Such review shall be conducted by the board of directors
of Newco, or a committee designated by the board of directors, and
such board or committee may (but is under no obligation to) increase
said salary, but shall not decrease said salary.
(C) EARNINGS BONUS. In addition to the consideration payable
to the Employee under clause (b) above, Employee shall be entitled
to receive annual bonuses based on the Before-Tax Income of Newco,
which annual bonus shall be calculated in the following manner:
(i) In the event Before-Tax Income for the partial
fiscal year of Newco beginning on the date hereof (the
"Closing Date") and ending on September 30, 1995 equals or
exceeds an amount equal to $2739.73 times the number of days
elapsed from the Closing Date to and including September 30,
1995, Newco shall pay to the Employee an amount equal to 7.5%
of the Before-Tax Income in excess of such amount for such
period, such payment to be made on or before the tenth day
after the Audit Date with respect to such fiscal year;
(ii) In the event Before-Tax Income for any of the
fiscal years of Newco ending on September 30 of 1996, 1997,
1998, 1999, 2000 or 2001 equals or exceeds $1,000,000, Newco
shall with respect to any such fiscal year pay to the Employee
an amount equal to 7.5% of the Before-Tax Income in excess of
such amount, such payment to be made on or before the tenth
day after the Audit Date with respect to each such fiscal
year; and
(iii) In the event Before-Tax Income for the partial
fiscal year of Newco beginning on October 1, 2001 and ending
on the seventh anniversary of the Closing Date equals or
exceeds an amount equal to $2739.73 times the number of days
elapsed from the October 1, 2001 to and including such seventh
anniversary, Newco shall pay to the Employee an amount equal
to 7.5% of the Before-Tax Income in excess of such amount for
such period, such payment to be made on or before the tenth
day after the Audit Date with respect to such fiscal year.
(iv) In no event shall the aggregate amount payable to
the Employee under this Section 4(c) exceed Three Hundred
Seventy-Five Thousand Dollars ($375,000).
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(d) DISCRETIONARY BONUS. In addition to the consideration
payable to the Employee under clauses (b) and (c) above, the
Employee shall from time to time be eligible for bonuses as shall be
determined by the board of directors of Newco in its sole
discretion.
(e) BENEFITS. Until the termination of the Employee's
employment pursuant to this Agreement, the Employee shall be
eligible for participation in and to receive all benefits under
welfare benefit plans, practices, policies and programs of Newco
(including, without limitation, medical, disability, employee life,
group life, accidental death and travel accident insurance plans and
programs), as may be in effect from time to time for other employees
of Newco, and under any stock purchase or stock option plans that
may be in effect from time to time for other senior executives of
Newco (unless a plan specific to the Employee is implemented or
already in place, and such plan provides benefits to the Employee
which are substantially similar to, or more generous than, the
general plan in effect) it being agreed that the foregoing shall not
require Newco to continue or to put into effect any plan, practice,
policy or program. Employee shall be entitled to vacations in
accordance with Newco's prevailing policy for its executives.
(f) REIMBURSEMENT OF EXPENSES. Newco shall reimburse the
Employee for all reasonable and proper travel and out-of-pocket
expenses incurred by Employee in connection with the performance of
his duties, all in accordance with Newco's written policies as
provided to Employee from time to time, as to the allowable amount
of such expenses and the provision of itemized reports.
(f) COMPANY CAR. For the term hereof, Newco shall, at its sole
cost and expense, maintain for the exclusive use of the Employee the
Chevrolet Suburban VIN # 0XXXX00X0XX000000 currently provided the
Employee by the Company, and shall replace such automobile with a
substantially similar automobile or automobiles as often as is
reasonably necessary (as is agreed by the Employee and Newco). Newco
shall be responsible for all costs of fuel, maintenance and repair
with respect to any automobile provided the Employee under this
Section 4(g). Employee hereby acknowledges and agrees that his
personal use of the car hereunder is compensation income as required
by the Internal Revenue Code."
SECTION 3. EFFECT. This First Amendment shall be effective only for the
specific purposes set forth herein, and, except as modified by this First
Amendment, the terms, covenants and provisions of the Original Employment
Agreement is hereby ratified and confirmed and shall continue in full force and
effect.
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IN WITNESS WHEREOF, the Employee has hereunto set his hand and Newco has
caused this First Amendment to be executed in its name on its behalf, all as of
the day hereinabove first written.
"EMPLOYEE"
___________________________________________
Xxxxx Xxxxxxx
"NEWCO"
De-Ro/Suncoast, Inc.
By: _______________________________________
Xxxxx Xxxxxxx
Title: President
JOINDER
Xxxxxx hereby consents to the foregoing First Amendment to Employment and
Non-Competition Agreement.
XXXXXX INTERNATIONAL, INC.
By: _______________________________________
Xxxxx Xxxxxxx
Title: President
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