EXHIBIT 10.180
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT to the Employment Agreement (the "Amendment") is
entered into as of September 30, 1999, by and between CATALINA INDUSTRIES, NC.
F/K/A XXXX LIGHTING, INC., a Florida corporation ("Xxxx"), CATALINA LIGHTING,
INC., a Florida corporation (the "Company") and Xxxxxx Xxxx (the "Employee").
RECITALS:
A. The Company, Xxxx and the Employee entered into an Employment
Agreement, dated October 1, 1993, which was subsequently amended on October 1,
1994 and then on June 4, 1999, pursuant to which the Employee has been employed
as Executive Vice President of the Company and President of Xxxx (collectively,
the "Agreement").
B. The Company, Xxxx and the Employee wish to enter into this Third
Amendment in order to further amend the terms of the Agreement.
NOW, THEREFORE, each of the parties agrees as follows:
1. Section 3.2 of the Agreement is hereby amended by the addition of a new
subsection 3.2(c) at the end to read as follows:
"(c) Effective for fiscal years commencing on or after October
1, 1999, the Employee shall not be entitled to a Bonus, as described in
subsections 3.2(a) and (b) hereof, until the Employee and the Company
mutually agree upon a revised bonus structure. Notwithstanding the
foregoing, in the event of an Acquisition of Control, as defined in
subsection 5.l(b) hereof, prior to March 31, 2000, the Employee shall
be entitled to the Bonus, as described in subsections 3.2(a) and (b)
hereof, and this subsection 3.2(c) shall be null and void and shall
have no force or effect."
2. Section 5.7 of the Agreement is deleted in its entirety and shall be replaced
by the following:
"5.7 CHANGE IN CONTROL.
(a) Notwithstanding the provisions of Sections 5.1 through
5.6, but subject to Section 5.9, hereof, in the event that (i) there is
an Acquisition of Control, and (ii) either (A) the Employee is employed
by the Company on the 180th day following the date on which the
Acquisition of Control occurs, or (B) the Employee's employment with
the Company is terminated either by
Catalina without Cause or by the Employee for Good Reason within 180
days after the date on which the Acquisition of Control occurs (the
events referred to in clauses (A) and (B) hereof being referred to
hereinafter as "Triggering Events"), then
(A) the Company shall pay to the Employee an amount
equal to three (3) times the sum of (x) the Employee's Salary
for the then current fiscal year of the Company, and (y) the
Bonus payable to the Employee for the fiscal year immediately
preceding the fiscal year in which the Triggering Event occurs
(the "Change in Control Payment");
(B) the Company shall continue to provide welfare
benefits and automobile allowances to the Employee and/or the
Employee's family at least equal to those which would have
been provided to them in accordance with the plans, programs,
practices and policies of the Company if the Employee's
employment had not been terminated, including health, dental,
disability insurance, life insurance, automobile lease and
related expense allowances, in accordance with the most
favorable plans, practices, programs or policies of the
Company during the 180-day period immediately preceding the
date on which the Triggering Event occurs, or, if more
favorable to the Employee, as in effect at any time thereafter
with respect to other key executives and their families, for a
period of three (3) years commencing as of the date on which
the Triggering Event occurs; and
(C) the provisions of subsection 6.1(b) hereof shall
be of no further force or effect.
The Change in Control Payment shall be made by the Company to
the Employee in a single lump sum payment immediately upon the
occurrence of a Triggering Event. Notwithstanding anything in this
Agreement to the contrary, if the Employee's employment with the
Company is terminated either by the Company without Cause or by the
Employee for Good Reason prior to the date on which an Acquisition of
Control occurs, and it is reasonably demonstrated that such termination
(x) was at the request of a third party who has taken steps reasonably
calculated to effect an Acquisition of Control, or (ii) otherwise arose
in connection with an Acquisition of Control, then the Acquisition of
Control shall be deemed to be a Triggering Event for the Employee and
the Employee shall be entitled to the benefits under this Section 5.7.
In addition to the foregoing, upon the termination of the
Employee's employment with the Company for any reason after the date on
which an Acquisition of Control occurs, the Company shall continue to
pay to the Employee the Employee's Compensation (as defined in
subsection 5.1(b) hereof) (subject to any applicable payroll and/or
other taxes required by law to be withheld) through the date of
termination of the Employee's employment.
(b) In addition, if the Employee's employment with the Company
terminates for any reason other than for Cause within one (1) year
following an Acquisition of Control, then the Employee shall have the
option, for thirty (30) days after the date of such termination of
employment, to enter into a three (3) year consulting and
non-competition agreement (the "Consulting Agreement") with the
Company, in the form attached as Exhibit A hereto, which shall take
effect as of the date it is executed and delivered to the Company."
2
3. Section 5.9 of the Agreement is deleted in its entirety and shall be replaced
by the following:
"5.9 CERTAIN REDUCTION OF PAYMENTS BY THE COMPANY.
(a). Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Employee,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (a "Payment"), would be
nondeductible by the Company for Federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of amounts
payable or distributable to or for the benefit of the Employee pursuant
to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be
reduced to the Reduced Amount. The "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate present value
of Agreement Payments without causing any Payment to be nondeductible
by the Company because of Section 280G of the Code. For purposes of
this Section 5.9, present value shall be determined in accordance with
Section 280G(d)(4) of the Code. For purposes of this Section 5.9, the
terms "Payment" and "Agreement Payments" shall not include any payments
required to be made to the Employee pursuant to the Consulting
Agreement (as defined in Section 5.7 hereof), and any payments pursuant
to the Consulting Agreement shall be disregarded in making any
determinations, and thus shall not be subject to any reductions or
cause any Payments to be reduced, pursuant to this Section 5.9.
(b) All determinations required to be made under this Section
5.9 shall be made by Deloitte & Touche LLP or, at the Company's option,
any other nationally recognized firm of independent public accountants
selected by the Employee and approved by the Company, which approval
shall not be unreasonably withheld or delayed (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the
Company and the Employee as of the date on which the Acquisition of
Control occurs or such other time as is requested by the Company. Any
such determination by the Accounting Firm shall be binding upon the
Company and the Employee. The Employee shall determine which and how
much of the Payments shall be eliminated or reduced consistent with the
requirements of this Section 5.9, provided that, if the Employee does
not make such determination within ten business days of the receipt of
the calculations made by the Accounting Firm, the Company shall elect
which and how much of the Payments shall be eliminated or reduced
consistent with the requirements of this Section 5.7 and shall notify
the Employee promptly of such election. All fees and expenses of the
Accounting Firm incurred in connection with the determinations
contemplated by this Section 5.9 shall be borne by the Company."
4. In all other respects, the Agreement shall remain unchanged by this
Amendment.
3
IN WITNESS WHEREOF, the Company and the Employee have caused this
instrument to be executed the day and year first above written.
CATALINA LIGHTING, INC., a Florida
corporation
Dated: 10/1/99 By: /s/ XXXXXX XXXXX
-------------------------------------------
Xxxxxx Xxxxx, Chairman, President and Chief
Executive Officer
EMPLOYEE:
/s/ XXXXXX XXXX
-----------------------------------------------
XXXXXX XXXX
CATALINA INDUSTRIES, INC. F/K/A XXXX
LIGHTING, a Florida corporation
Dated: 10/1/99 By: /s/ XXXXXX XXXXX
-------------------------------------------
Xxxxxx Xxxxx, Vice President
EMPLOYEE:
/s/ XXXXXX XXXX
-----------------------------------------------
XXXXXX XXXX
4
