DEFERRED COMPENSATION PLAN
This Deferred Compensation Plan (the "Plan"), is made by and between
Xxxxxxxxxx Enterprises, Inc., located at 0000 Xxxx Xxxxxx Xxxxxxx, #000,
Xxxxxxxxxx, Xxxxxxxxxx ("Company"), and Xxxxxxx Xxxxxxxxxx ("Xxxxxxxxxx"), an
individual residing at 0000 Xxxxxxx Xx., Xxx Xxxx, Xxxxxxxxxx.
WHEREAS, Xxxxxxxxxx is a founder, and has served as the Company's Chairman of
the Board from inception to 1995, and its President from inception to 1994;
WHEREAS, During this time frame, Xxxxxxxxxx has received no salary for the
time spent in pursuit of the growth of the Company, and for the assumption of
the risk of liability inherent in such pursuit;
WHEREAS, The Board of Directors wishes to recognize the contributions of
Xxxxxxxxxx to the success of the Company, and his forbearance of full
compensation for his past services provided on behalf of the Company;
NOW THEREFORE, In consideration of Xxxxxxxxxx'x past services provided on
behalf of the Company, the Company hereby agrees to provide to Xxxxxxxxxx,
the deferred compensation package as set forth below:
1. DEFERRED COMPENSATION PLAN--This Deferred Compensation Plan is established
as an unfunded individual plan, created by the Company for the benefit of
Xxxxxxx Xxxxxxxxxx. It is created to compensate Xxxxxxxxxx for his past
services provided on behalf of the Company, from the period of time from
September 12, 1986 until September 28, 1995. Xxxxxxxxxx resigned as President
and Chief Executive Officer on October 26, 1994, and resigned as Chairman on
September 28, 1995. Xxxxxxxxxx remains a director and over 10% shareholder of
the Company. This Plan is not intended to meet the funding, employee coverage
and other requirements of a "qualified" plan under Section 401(a) of the
Internal Revenue Code.
2. PAYMENT OF BENEFITS--Commencing on January 1, 1996, the Company agrees to
pay to Xxxxxxxxxx, the aggregate amount of $90,000, to be paid in twenty-four
(24) bi-monthly installments, in accordance with the Company's standard
payroll procedures. Thereafter, the Company shall continue to make such
payments until: (1) January 1, 2005, or (2) the lock-up period terminates in
connection with the closing of an initial public offering of the Company's
common stock, or (3) the closing of a merger or sale of the Company;
whichever is sooner. The parties agree, however, that the first $90,000 is
guaranteed, notwithstanding the occurrence of numbers (2) or (3) above. In the
event of (1), (2) or (3) above, this Plan shall immediately terminate and be
of no further force or effect.
3. TAX IMPACT--The Company makes no representations or warranties to
Xxxxxxxxxx concerning the Federal or California state tax consequences of this
Plan. Each party agrees
that it shall be responsible for its own tax consequences and to satisfy or
pay when due, all tax obligations which may arise as a result of the
implementation of this Plan.
4. PARTIES IN INTEREST/NO ASSIGNMENT--This Plan shall be binding upon and
inure to the benefit of the Company, its successors in interest, and
Xxxxxxxxxx and his heirs, executors, administrators and legal
representatives. The rights and other benefits created under this Plan shall
not be assigned, transferred, pledged or encumbered except by will or by the
laws of descent and distribution.
5. GOVERNING LAW--This Plan shall be construed in accordance with and is
governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have executed this agreement on
May 2, 1996.
XXXXXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
PRESIDENT
--------------------------
/s/ Xxxxxxx Xxxxxxxxxx
----------------------
XXXXXXX XXXXXXXXXX
AMENDMENT No.1
DEFERRED COMPENSATION PLAN ENTERED INTO BY AND BETWEEN XXXXXXX XXXXXXXXXX AND
XXXXXXXXXX ENTERPRISES, INC., DATED MAY 2, 1996 ("THE PLAN")
The Plan is hereby amended as follows:
The aggregate annual amount of deferred compensation shall be $110,000,
commencing on January 1, 1997. All other terms and conditions remain as written.
XXXXXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxx, General Counsel
XXXXXXX XXXXXXXXXX
Signature: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------
