EXHIBIT 10.8
AMENDMENT TO S CORPORATION TERMINATION,
TAX ALLOCATION AND INDEMNIFICATION AGREEMENT
This Amendment relates to the S Corporation, Termination, Tax
Allocation and Indemnification Agreement dated as of March 24, 1997 (the
"Agreement"), by and between International CompuTex, Inc., a Georgia corporation
(the "Company"), and each of its then-current stockholders, Xxxx X. Xxxxx,
Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxx, Xxxxx X. XxXxxxxxx and Xxxxxxxx Xxxxxxx Salem
(the "Stockholders"). The effective date of this Amendment is March 24, 1998.
RECITALS:
A. It was the intention of the Company and of the Stockholders at the
time the Agreement was executed that the amount of termination payments made
pursuant to Section 2.2 of the Agreement was intended to be equal to the net
worth of the Company as of the Termination Date, as determined by the Company
for accounting purposes. The Agreement provided for such distributions, however,
based upon the Accumulated Adjustments Account, which is a term utilized in
connection with the preparation of the federal income tax return for the
Company. At the time the Agreement was executed, the parties to the Agreement
had no reason to believe that the amount of distributions based upon net worth
as calculated for accounting purposes would be different from the amount of
distributions based upon the Accumulated Adjustment Account.
B. The Company subsequently has determined that the calculation of
the Accumulated Adjustments Account as of the Termination Date was less than the
amount of net worth of the Company as of the Termination Date for accounting
purposes.
C. The conversion of the Company's tax status from an S Corporation
to a C Corporation was completed in connection with its initial public offering
of common stock. In the prospectus prepared in connection with such offering,
the proposed distribution to the five Subchapter S stockholders of the Company
was disclosed by reference to accumulated, undistributed earnings, without
specific reference to any tax calculation, with the estimated amount of such
distribution being $2.4 million dollars. The actual distribution made was
$2,360,127. Reports issued by the Company to its shareholders and filed with the
Securities and Exchange Commission have reflected the amount of distribution as
$2,418,765, which was the amount anticipated prior to writing off certain
receivables as uncollectible.
D. Having considered the foregoing, the parties have mutually agreed
to amend the Agreement to cause its terms to be consistent with the intentions
of the parties and to be consistent with prior filings with the Securities and
Exchange Commission and disclosures to shareholders of the Company. Each of the
two members of the Board of Directors of the
Company who are not parties to the Agreement has specifically consented to the
execution and delivery of this Amendment.
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each of the parties hereto, and in
consideration of the premises recited above, the Company and the Stockholders
agree as follows:
1. The following defined term shall be added to Article I of the
Agreement:
"Stockholders' Equity" shall have the meaning ascribed to such term
under Generally Accepted Accounting Principles (GAAP), except that the
Common Stock Par Value shall be subtracted from such amount.
2. Section 2.2 of the Agreement shall be deleted in its entirety and
replaced with the following:
2.2 Termination Payments to Stockholders. Immediately prior to the
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Termination Date, the Company shall distribute to the Stockholders (pro
rata in accordance with the relative number of shares of stock of the
Company held by each Stockholder as of the Termination Date) an amount
equal to the Stockholders' Equity of the Company as of the Termination
Date. Such distribution shall take the form of the assignment of accounts
receivable of the Company as of the Termination Date, plus an amount of
cash which, when combined with the amount of the accounts receivable to be
distributable, equals the Stockholders' Equity of the Company as of the
Termination Date. For purposes of this Section 2.2, the amount of the
Stockholders' Equity of the Company shall be as determined by the Chief
Financial Officer of the Company in accordance with the Company's books and
records.
3. Section 2.3, relating to future adjustments in distribution amounts
resulting from any future examination of tax returns, shall be deleted in its
entirety.
4. Except as provided above, this Amendment shall not affect any other
provisions of the Agreement, including without limitation those provisions
requiring the Stockholders to indemnify the Company for any tax liabilities of
the Company attributable to periods of time prior to the Termination Date or
which are incurred by the Company as a result of any adjustment in the taxable
income of the Stockholders for any period prior to the Termination Date.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date set forth above.
INTERNATIONAL COMPUTEX, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: Chief Financial Officer
STOCKHOLDERS:
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
/s/ Xxxxx X. XxXxxxxxx
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Xxxxx X. XxXxxxxxx
/s/ Xxxxxxxx Xxxxxxx Salem
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Xxxxxxxx Xxxxxxx Salem
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