AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment is made and entered into effective June 20, 2001, by and between
SONUS CORP., a Yukon Territory, Canada, corporation ("Corporation"), and XXXXX
XXXXX ("Executive").
RECITALS
A. Effective November 1, 1998, Corporation and Executive entered into an
employment agreement (the "Agreement").
B. Effective June 14, 1999, Executive was appointed by Corporation's Board of
Directors as President and Chief Operating Officer of Corporation.
C. Corporation and Executive mutually desire to amend the Agreement as set
forth in this Amendment.
AMENDMENT
1. Definitions. Terms defined in the Agreement and not otherwise defined
herein shall have the meanings provided for in the Agreement.
2. Executive Title and Duties. Executive will have the title of President of
Corporation until at least June 1, 2002, and will be responsible for all
operational aspects of the hearing centers owned by Corporation. Executive
will also have such other executive and managerial duties as Corporation's
Chief Executive Officer may prescribe from time to time. Executive will
report directly to Corporation's Chief Executive Officer.
3. Salary and Bonus. Executive's Base Salary is increased to $225,000 per
year beginning July 9, 2001. In the event that Executive is employed by
Corporation on June 1, 2002, Executive's Annual Bonus for the fiscal year
ended July 31, 2002, shall be not less than $25,000.
4. Termination of Employment. Corporation acknowledges and agrees that by its
actions in altering certain of Executive's duties following the employment
of Xxxxxx X. Xxxx as Chief Executive Officer of Corporation (the
"Restructuring"), Good Reason exists for Executive to terminate his
employment with Corporation. Executive hereby waives his right to
terminate his employment based on the Restructuring; provided, however,
that Executive may terminate his employment with the Corporation (i) at
any time during the period beginning on June 1, 2002, and ending on June
30, 2002 (the "Separation Period"), or (ii) not later than 30 days after
Xxxxxx X. Xxxx ceases to be Chief Executive Officer of Corporation, and
such termination shall be deemed to be for Good Reason. If Executive
terminates his employment for Good Reason during the Separation Period or
within 30 days after Xxxxxx X. Xxxx ceases to be Chief Executive Officer
of Corporation, Corporation will pay Executive a severance payment of
$200,000 instead of a severance payment in the amount of Executive's Base
Salary.
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5. Additional Stock Options. Corporation will grant Executive nonqualified
stock option awards for 200,000 shares of Corporation's common stock (the
"Option") under Corporation's Stock Award Plan (the "Plan"). The Option
will have the following additional features:
a. The effective date of the option grant (the "Grant Date") will be
the date the Board takes action to grant the Option;
b. The option purchase price per share will be $2.12, the Fair Market
Value (as defined in the Plan) on the Grant Date;
c. The Option will have a term of 10 years, commencing on the Grant
Date;
d. The Option will be immediately exercisable as to 70,000 shares;
e. The Option will become exercisable as to an additional 10,834 shares
on the first day of each fiscal quarter of Corporation beginning
August 1, 2001;
f. The Option will become immediately and fully exercisable in the
event that, at any time following a Change in Control of
Corporation, Executive is terminated without Cause or one of the
events described in the definition of Good Reason in Section 1 of
the Agreement occurs;
g. The Option will be governed by an Award Agreement (as defined in the
Plan) as approved by the Board; and
h. Vested Options will remain exercisable for one year after
termination of employment or, in the case of termination due to
death or Disability.
4. Existing Stock Options. With respect to Section 4.3.1 of the Agreement,
the date by which vested Options must be exercised following termination
of Xx. Xxxxx'x employment by Corporation shall be one year rather than 90
days. In addition, the following is added to the end of Section 4.3.1:
"Executive shall be entitled to modifications of his options to purchase
Corporation's common shares consistent and commensurate with
modifications provided to other senior executives of Corporation
(including issuance of new options, re-pricing outstanding options,
acceleration of vesting periods, etc.)."
5. Resignation from Board. Executive will resign from the Board of Directors
of Corporation effective July 9, 2001.
6. No Other Amendment. Except as expressly provided in this Amendment, the
Agreement will continue in full force and effect.
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CORPORATION: SONUS CORP.
By /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Chief Executive Officer
EXECUTIVE: /s/ Xxxxx Xxxxx
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XXXXX XXXXX
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