THIRD AMENDMENT TO
EMPLOYMENT CONTRACT
This Third Amendment to Employment Contract ("Amendment") is made and
entered into as of April 15 and is effective January 1, 1997 by and between SA
Telecommunications, Inc., a Delaware corporation with offices at 0000 Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxxx 00000 (the "Company") and XXXX X. XXXX,
XX., residing at 0000 Xxxxxxxx, Xxxxx, Xxxxx 00000 (the "Executive") and amends
that Employment Contract dated as of March 24, 1995 by and between SA Holdings,
Inc. d/b/a SA Telecommunications, Inc. and the Executive as amended effective
January 1, 1996 and January 1, 1997 ("Agreement"). In the event any provision of
this Amendment shall conflict with the Agreement, this Amendment shall control.
In consideration of the mutual covenants hereinafter set forth and intending to
be legally bound, the parties hereby agree as follows:
1. Except as otherwise stated, capitalized terms used herein have the same
meaning as set forth in the Agreement.
2. Section 4(a) of the Agreement is hereby deleted in its entirety and the
following is added in lieu thereof:
(a) If the Company, during any fiscal year which ends during the
Employment Period, shall have either positive Net Income or positive EBITDA
in the amounts set forth below, Executive shall be entitled to cash bonus in
an amount equal to the higher of (i) the Consolidated Net Income Calculation
as set forth below or (ii) the EBITDA Calculation set forth below.
NET INCOME CALCULATION
ANNUAL NET
INCOME LEVEL PERCENTAGE TO BE PAID AS BONUS COMPENSATION
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$0-200,000 1% of net income up to and including $200,000
$200,001-1,200,000 4% of net income from $200,001 up to and including $1,200,000
$1,200,001 and above 8% of net income above $1,200,000
EBITDA CALCULATION
ANNUAL EBITDA PERCENTAGE TO BE PAID AS BONUS COMPENSATION
--------------------------- -----------------------------------------------------------------
$0-10,000,000 1.6% of EBITDA up to and including $10,000,000
Above $10,000,000 1.2% of EBITDA above $10,000,000
For purposes of this subsection, (i) net income is the net income of the
Company and its consolidated subsidiaries determined in accordance with
generally accepted accounting principles ("GAAP") as reflected in the
Company's audited financial statements, excluding the effect of income taxes
and including cash bonuses paid to any employee or consultant other than the
Executive and 50% of goodwill amortization expense for such year, and (ii)
EBITDA is the positive number equal to earnings (loss) of the Company and
its consolidated subsidiaries determined in accordance with GAAP before
interest, taxes, depreciation, amortization, nonrecurring items, and other
income (expense) and including cash bonuses paid to any employee or
consultant other than the Executive as determined from the Company's audited
financial statements. The bonus hereunder shall be paid to Executive within
thirty (30) days after the Company's independent auditors deliver the
audited financial statements to the Board of Directors of the Company with
respect to any fiscal year for which such bonus is earned. Any bonus to
Executive hereunder shall be payable in cash.
2. This Amendment may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed to be an original and all of
which counterparts of this Agreement, taken together, shall constitute but
one and the same instrument.
3. The balance of the Agreement and any amendments or addenda thereto not
modified by this Amendment shall remain in full force and effect. This
Amendment shall be effective upon the signatures of an officer of the
Company and the Executive.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first above written.
SA TELECOMMUNICATIONS, INC.
/s/ XXXX X. XXXX, XX.
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Xxxx X. Xxxx, Xx.
By: /s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
PRESIDENT AND CHIEF
OPERATING OFFICER