EXHIBIT 10.5
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") made September 17,
2001 to be effective as of July 1, 2001 (the "Effective Date") by and between
AHC I ACQUISITION CORPORATION ("AHC"), AKI HOLDING CORP. ("Holding") and AKI,
INC. ("AKI") (AHC, Holding and AKI collectively called the "Company"), and
XXXXXXX X. XXX (the "Executive");
WITNESSETH:
THAT WHEREAS, the Company and the Executive are parties to the Employment
Agreement dated January 27, 1999 (the " Employment Agreement"); and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement as set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby irrevocably acknowledged, the parties agree as
follows:
1. The Employment Agreement is hereby amended as follows:
a. The anniversary date of the Employment Agreement shall be July 1
of each year, rather than February 1.
b. The reference to "$600,000" is deleted from Section 3(a) and
"$775,000" is substituted in lieu thereof.
c. All references to "80%" in Section 3(b) are deleted and "75%" is
inserted in lieu thereof. All references to "25%" in Section 3(b)
are deleted and "50%" is inserted in lieu thereof. All references
to "150%" in Section 3(b) are deleted and "110%" is inserted in
lieu thereof.
d. The following sentence is added after the second sentence of
Section 3(f):
Notwithstanding the foregoing, the amount of the Acquisition
Bonus for "Project W," if consummated, shall only be 1% of
the Value of the Transaction in excess of $30,000,000 but
not more than $50,000,000, and .25% of the Value of the
Transaction in excess of $50,000,000.
e. The following sentence is added at the end of Section 3(f):
This Section 3(f) shall apply to the acquisition by the
Company or combination with the Company of any business
whether by means of an asset purchase, a merger or
consolidation, the use of a restricted or unrestricted
subsidiary or any other method.
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f. The following sentence is added at the end of Section 4(b):
Beginning with calendar year 2001, the Executive shall be
entitled to five weeks vacation per annum during the Term,
to be scheduled at mutually agreeable times and to be taken
in accordance with the Company's policies.
g. The last sentence of Section 4(c) is deleted, and the following
sentence is inserted in lieu of it:
In addition, the Company shall reimburse Executive for the
reasonable automobile maintenance, care and other expenses
incurred by Executive for business purposes, including but
not limited to (i) lease payments not to exceed $1,000.00
per month and (ii) the cost of parking in New York City.
h. The following reference to "$15,000" in Section 4(e) is deleted
and "$20,000" is inserted in lieu thereof.
i. The reference to "90 days" in clause (v) of Section 6(b) is
deleted, and "120 days" is inserted in lieu thereof.
j. Clause (ii) of Section 6(c)(i)(D) is deleted, and the following
clause (ii) is inserted in lieu of it:
(ii) one-half of such amount shall be payable in six equal
installments with one each of such installments being
payable on the first day of each month until such amount is
paid in full, beginning the first day of the month
immediately following the effective date of such
termination.
k. The following sentences are added immediately prior to the last
sentence of Section 6(c)(i)(D):
Notwithstanding the foregoing, should this Agreement be
terminated by the Executive for Good Reason as a result of a
Change of Control or by the Company for any reason other
than Cause or the Executive's death or Disability within
sixteen (16) months following a Change of Control (a "Change
of Control Termination"), the Executive shall be entitled to
receive a severance benefit in an amount equal to two (2)
times the highest aggregate amount of compensation (i.e,
Base Salary and Bonus, excluding any Acquisition Bonus) paid
to the Executive in any of the three calendar years prior to
the effective date of termination. One-half of the total
amount of such severance benefit shall be due and payable
upon the effective date of any such Change of Control
Termination, and one-half of the total amount of such
severance benefit shall be payable in six equal installments
with one each of such installments being payable on the
first day of each month until such amount is paid in full,
beginning the first day of the month immediately following
the effective date of such Change of Control Termination.
l. The following Section 6(c)(v) is added to Section 6(c):
(v) Any termination of this Agreement other than by reason
of Executive's death shall be effective on the date set
forth in written notice of termination; provided, however,
that such date shall not be earlier than that date which is
thirty (30) days from the date of such notice, provided,
however, that notwithstanding the foregoing, in the
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event of a termination under Section 5(b), such date shall
not be earlier than the last to occur of (A) that date which
is thirty (30) days from the date of such notice, and (B)
the date immediately following the last day of the
Disability Period. Further, notwithstanding the foregoing,
with respect to any termination for Cause under clauses (ii)
or (iii) of Section 6(a), the effective date of termination
shall be the date of such notice, and with respect to any
termination for Cause under clauses (i) or (iv) of Section
6(a), the effective date of termination shall not be later
than the last day of the cure period (if applicable) set
forth in Section 6(a). Any termination of this Agreement by
reason of Executive's death shall be effective on the date
of death. All compensation and benefits to which Executive
is entitled under this Agreement shall continue through the
effective date of termination, and Executive shall be
entitled to reimbursement for any expenses incurred prior to
any such effective date of termination and payment for all
benefits which have accrued as of such effective date of
termination. Further, should this Agreement be terminated by
the Executive for Good Reason or by the Company for any
reason other than Cause or the Executive's death or
Disability, the Company shall pay the premiums during any
applicable COBRA period (to the extent the Executive elects
COBRA benefits) for the Executive's COBRA coverage under
each and all of the Company's medical, dental and
supplemental medical insurance policies under which the
Executive is covered pursuant to this Agreement immediately
prior to the effective date of termination. Any reference in
this Agreement to a termination of this Agreement shall be
deemed to be a reference to the effective date of such
termination as set forth in this Section 6(c)(v).
m. The following sentence is added at the end of Section 7:
Further, no severance payments or other benefits to which
the Executive may be entitled under this Agreement shall be
offset by any compensation earned by the Executive in
connection with other employment following the termination
of this Agreement.
n. The name and address of DLJ Merchant Banking contained in Section
15 are deleted and the following name and address are inserted in
lieu thereof:
DLJ Merchant Banking Partners
Credit Suisse First Boston Private Equity
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxx
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2. Except as set forth in Section 1 above, the Employment Agreement shall
remain unchanged and in full force and effect.
3. This Amendment shall be governed by and construed under the laws and
decisions of the State of New York with respect to contracts and
agreement entirely made and entered into therein. Any dispute,
controversy or claim arising out of or in connection with this
Amendment shall be determined and settled by arbitration in the County
of New York, State of New York conducted under the commercial
arbitration rules of the American Arbitration Association ("AAA") in
accordance with the then existing rules, regulations, practices and
procedures of the AAA; provided, however, that if the Company or the
Executive seeks injunctive relief to prohibit violations of this
Amendment, the party seeking such relief shall be entitled to do so in
a Court of Law, including, without limitation, the Supreme Court of
the State of New York, County of New York.
4. This Amendment may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which shall constitute one and
the same agreement.
5. This Amendment and the Employment Agreement, as amended by this
Amendment, contain the entire understanding of the parties hereto with
respect to the subject matter hereof and thereof and supersede all
previous written and oral agreements between the parties with respect
to the subject matter set forth herein and in the Employment
Agreement, as amended by this Amendment.
6. Any provision of this Amendment that is deemed invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction and
subject to this section, be ineffective to the extent of such
invalidity, illegality or unenforceability, without affecting in any
way the remaining provisions hereof in such jurisdiction or rendering
that or any other provision of this Amendment invalid, illegal or
unenforceable in any other jurisdiction.
[Signatures appear on the following page.]
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IN WITNESS WHEREOF, the parties have executed this Amendment on the date
first above written to be effective as of the Effective Date.
AHC ACQUISITION CORPORATION
By:/S/ Xxxxxxxx Xxxx
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AKI HOLDING CORP.
By:/S/ Xxxxxxxx Xxxx
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AKI, INC.
By:/S/ Xxxxxxxx Xxxx
-----------------------
XXXXXXX X. XXX
/S/ Xxxxxxx X. Xxx
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Xxxxxxx X. Xxx
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