EXHIBIT 10(z)
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
---------------------------------------
This amendment is made effective March 26, 2002, between Metatec
International, Inc., an Ohio corporation (the "Company"), and Xxxxxxxxxxx X.
Xxxxx ("Xx. Xxxxx").
BACKGROUND INFORMATION
A. The Company and Xx. Xxxxx (the "Parties") are the parties to an
Employment Agreement dated November 22, 2000 (the "Agreement"), pursuant to
which the Company employed Xx. Xxxxx to serve as the Company's Chief Operating
Officer beginning January 2, 2001.
B. Effective November 29, 2001, Xx. Xxxxx was elected to the offices of
President and Chief Executive Officer of the Company. As a result, the Company
desires to provide additional compensation and incentives to Xx. Xxxxx in
recognition of his increased responsibilities. The Parties are entering into
this amendment for that purpose and to confirm their understanding regarding
some previously unresolved matters relating to Xx. Xxxxx'x 2001 compensation and
benefits.
STATEMENT OF AGREEMENT
The Parties hereby acknowledge the accuracy of the foregoing Background
Information and agree as follows:
Sec. 1. DEFINITIONS. Any capitalized terms used but not otherwise
defined in this amendment shall have the respective meanings given those terms
in the Agreement.
Sec. 2. SERVICES. While serving as President and Chief Executive
Officer of the Company, Xx. Xxxxx shall report to the Board or its Executive
Committee, as determined by the Board, and he shall perform such executive or
administrative tasks and have such responsibilities as may be assigned to him
from time to time by the Board or its Executive Committee.
Sec. 3. SALARY. Xx. Xxxxx'x Base Salary shall be increased to an annual
rate of $300,000, effective as of January 1, 2002. An amount equal to the
difference between such Base Salary and Xx. Xxxxx'x Base Salary as in effect
prior to this amendment, prorated for the period from January 1, 2002 through
the date of the Company's normal pay date prior to the execution of this
amendment, shall be paid with Xx. Xxxxx'x next periodic payment of Base Salary
following the execution of this amendment.
Sec. 4. BONUSES. Section 5 of the Agreement shall no longer be
applicable. Concurrently with the execution of this amendment, the Company shall
pay to Xx. Xxxxx a bonus in the amount of $60,000 (subject to applicable
withholdings) as a one-time bonus for 2001 in full
satisfaction of all remaining bonus, expense reimbursement, and other amounts
payable to Xx. Xxxxx in connection with his employment in 2001.
So long as Xx. Xxxxx'x employment with the Company continues for the
remainder of calendar year 2002, the Company shall pay Xx. Xxxxx a bonus in an
amount of up to 60% of the Base Salary (prorated on a daily basis if Xx. Xxxxx'x
employment terminates prior to the end of the year), with the final percentage
to be determined based upon the performance of the Company as compared with the
2002 plan which has been initialed by Xx. Xxxxx and the Company's Senior Vice
President, Finance, for purposes of identification (the "Base Plan"). For this
purpose, the applicable performance thresholds and cumulative bonus percentages
shall be as follows (with all applicable threshold calculations to be determined
under generally accepted accounting principles):
Threshold Cumulative %
--------- ------------
Achieve Base Plan 20%
$1 million net earnings improvement over Base Plan 25%
$2 million net earnings improvement over Base Plan 30%
$3 million net earnings improvement over Base Plan 35%
Breakeven on net earnings basis 50%
$500,000 net profit 55%
$1 million net profit 60%
Xx. Xxxxx shall be eligible for such periodic bonuses for periods after
calendar year 2002 as may be determined by the Board, in its discretion.
Sec. 5. OPTIONS. As additional consideration for his obligations under
the Agreement, as amended by this amendment, the Company has granted to Xx.
Xxxxx new options to purchase a total of 150,000 common shares, without par
value, of the Company ("Shares"), pursuant to the Company's 1990 Stock Option
Plan, as amended (the "Plan"). The first of such options, for 100,000 Shares, is
subject to a vesting schedule under which such option will vest with respect to
50% of such Shares on each of the first two anniversaries of the February 13,
2002 grant date, subject to the other terms of the Plan and the agreement
evidencing the option. The second of such options, for 50,000 Shares, is subject
to a vesting schedule under which such option will vest with respect to all of
such Shares on March 1, 2003, subject to the other terms of the Plan and the
agreement evidencing the option.
Sec. 6. LIFE INSURANCE. Section 8 of the Agreement shall no longer be
applicable. The Company has previously paid the annual premium in the amount of
$20,000 (the "Premium") payable by Xx. Xxxxx with respect to Northwestern Mutual
life insurance policy number 15606845 owned by Xx. Xxxxx (the "Policy"). The
Company's obligation to pay or reimburse Xx. Xxxxx for any future Premium with
respect to the Policy during the period of Xx. Xxxxx'x employment with the
Company shall be subject to the Parties' reviewing the Policy for possible
replacement with a more cost-effective insurance policy on terms satisfactory to
both Parties.
Sec.7. TERMINATION. Xx. Xxxxx shall not have the right to terminate his
employment with the Company pursuant toss.11(a) of the Agreement before March 1,
2003.
Sec. 8. NOTICE. Notices to the Company underss.15 of the Agreement
shall be addressed to the attention to the Chairman of the Board of the Company.
Sec. 9. INTERPRETATION. This is an amendment to and a part of the
Agreement. In the event of any inconsistencies between the provisions of the
Agreement and this amendment, the provisions of this amendment shall control.
Except as modified by this amendment, the Agreement shall continue in full force
and effect without change.
METATEC INTERNATIONAL, INC.
By /s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxxxxxx X. Xxxxx
------------------------------ --------------------------------
Xxxxx X. Xxxxxxx, Senior XXXXXXXXXXX X. XXXXX
Vice President, Finance
