EXHIBIT 10.3
AMENDMENT TO AND EXTENSION OF EMPLOYMENT AGREEMENT
BETWEEN XXXXX XXXXXXXX INTERNATIONAL, INC.
AND XXXXXX X. XXXXX, XX.
This AMENDMENT AND EXTENSION, dated as of April 1, 1998, is by and between
XXXXX XXXXXXXX INTERNATIONAL, INC., a Delaware corporation (the "Company"), and
XXXXXX X. XXXXX, XX. (the "Executive"), and amends and extends the EMPLOYMENT
AGREEMENT, dated June 3, 1992, between the Company (f/k/a Xxxxxxxx
International, Inc.) and the Executive (as previously amended and extended, the
"Employment Agreement").
WHEREAS, the Company and the Executive have agreed to amend and extend the
Employment Agreement in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Section 1 of the Employment Agreement is hereby amended to read as
follows:
1. Term of Employment. The Executive's period of employment hereunder
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shall extend from June 3, 1992 through April 10, 2001; provided,
however, that commencing April 10, 1999 and each April 10
thereafter if this Agreement is still in effect, the period of
employment shall automatically be extended for one additional year
unless, not later than March 1 of such year, the Company or the
Executive has given written notice to the other party that such
term of employment shall not be so extended. The period of
Executive's employment hereunder, including any extension or
extensions pursuant to the foregoing sentence, is referred to
hereafter as the "Employment Term."
2. The first sentence of Section 2 of the Employment Agreement is hereby
amended to read as follows: While employed hereunder, Executive shall
serve as Senior Vice President, Engineered Products Group of the
Company.
3. The lead-in paragraph of Section 7(d) of the Employment Agreement is
hereby amended to read as follows:
(d) Subject to Section 7(g), if during the Employment Term and prior
to a Change in Control Executive's employment hereunder is
terminated by the Company without Cause (other than by reason of
death or
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Disability) or by Executive with "Good Reason" (as defined in
Section 7(e) below) asserted in a Notice of Termination pursuant
to Section 13(f) within one year of the event alleged to
constitute such Good Reason, Executive shall be entitled to
receive the following benefits:
4. Section 7(d)(i) of the Employment Agreement is hereby amended to read
as follows:
(i) The Company shall pay Executive in equal monthly cash payments,
beginning on the fifth day of the month following such termination and
continuing on the fifth day of each month thereafter for a period of
24 months, an aggregate amount equal to two times Executive's Base
Salary in effect at the time of such termination or, in the event of
termination by Executive on account of an event described in Section
7(e)(iv) below, the Base Salary as in effect prior to the reduction or
reductions referred to therein plus the bonus Executive would have
earned in respect of the year of termination under the Company's
annual incentive compensation plan, if any, in effect at the date of
termination or, in the event of a termination by Executive by reason
of an event described in Section 7(e)(vi), the plan in effect prior to
the elimination referred to therein, determined as if Executive had
been employed by the Company for the full year and without regard to
any right reserved by the Company to decrease or eliminate such bonus,
and assuming actual performance had equaled 100% of the performance
objective established for such year pursuant to the terms of such
plan. In the event of a Change in Control following such termination,
all remaining amounts then payable pursuant to this Section 7(d)(i)
shall be paid in a lump sum in cash within 15 days of the date of the
event giving rise to the Change in Control.
5. The Employment Agreement is hereby amended to add a new Section 7(g)
and (h) to read as follows:
(g) Notwithstanding any other provision of this Agreement, in the
event (i) Executive's employment hereunder is terminated by the
Company without Cause prior to a Change in Control pursuant to
which payments are payable pursuant to Section 7(d) and (ii) such
termination is the result of a Performance Related Termination
Event (as defined in Section 7(g) below), then (x) the benefits
and perquisites provided pursuant to Sections 7(d)(ii) and
7(d)(iii) shall be provided for a 12-month period after such
termination in lieu of a 24-month period, (y) the benefits and
services provided pursuant to Sections 7(d)(iv) and 7(d)(v) shall
remain unchanged and (z) the amount payable pursuant to Section
7(d)(i) shall be reduced to the amount provided in Section 7(g)(i)
below:
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(i)The Company shall pay Executive in equal monthly cash payments
beginning on the fifth day of the month following such
termination and continuing on the fifth day of each month
thereafter for a period of 24 months, an aggregate cash amount
equal to one times his Base Salary in effect at the time of
such termination plus a fraction of the annual bonus which
(absent such termination and without regard to any right
reserved by the Company to decrease or eliminate such bonus)
Executive would have earned in respect of the year of
termination under the JM annual incentive compensation plan, if
any, in effect at the date of termination, assuming actual
performance had equaled 100% of the performance objective
established for such year pursuant to the terms of such plan,
the numerator of which fraction is the number of days in such
year during which the Executive was employed by the Company and
the denominator of which is 365.
(h) For purposes of the foregoing, "Performance Related Termination
Event" shall mean Executive's failure to meet in any material
respect the expectations of the Company which have been
communicated to Executive and which are reasonable and material in
light of Executive's position after a written notice specifying
this Section and identifying such failure is delivered to
Executive and Executive shall have failed during the 60-day period
following such written demand to have corrected such failure
(other than as a result of total or partial incapacity due to
physical or mental illness or as a result of termination by
Executive for Good Reason).
6. The lead-in paragraph of Section 8(d) of the Employment Agreement is
hereby amended to read as follows:
(d) If during the Employment Term Executive's employment hereunder is
terminated by the Company following a Change in Control without Cause
(other than by reason of death or Disability) or by Executive with
"Good Reason" (which following a Change in Control shall have the
meaning set forth in Section 8(e) below) asserted in a Notice of
Termination pursuant to Section 13(f) within two years of the event
alleged to constitute such Good Reason, Executive shall be entitled to
receive the following benefits:
7. Section 8(d)(i) of the Employment Agreement is hereby amended to read
as follows:
(i) The Company shall pay Executive at the time of termination in a
lump sum a cash amount equal to three times the sum of (A) Executive's
Base Salary in effect at the time of such termination or, in the event
of
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termination by Executive by reason of an event described in Section
8(e)(iv) below, the Base Salary as in effect prior to the reduction or
reductions referred to therein plus (B) the bonus Executive would have
earned in respect of the year of termination under the Company's
annual incentive compensation plan, if any, in effect at the date of
termination or, in the event of a termination by Executive by reason
of an event described in Section 8(e)(v), the plan in effect
immediately prior to the reduction or reductions referred to therein,
determined as if Executive had been employed by the Company for the
full year and without regard to any right reserved by the Company to
decrease or eliminate such bonus, and assuming actual performance had
equaled 100% of the performance objective established for such year
pursuant to the terms of such plan.
8. Section 9 of the Employment Agreement is hereby amended to read as
follows:
9. Golden Parachute Tax.
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(a) Anything herein to the contrary notwithstanding, in the event
that it is determined that any payment or distribution by the
Company to or for Executive's benefit, whether paid or payable or
distributed or distributable pursuant to the terms hereof or
otherwise, other than any payment pursuant to this Section 9(a)
(a "Payment"), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the
"Excise Tax"), then Executive shall be entitled to receive,
within 15 days following the determination described in Section
9(b) below, an additional payment ("Excise Tax Adjustment
Payment") in an amount such that after payment by Executive of
all applicable Federal, state and local taxes (computed at the
maximum marginal rates and including any interest or penalties
imposed with respect to such taxes), including any Excise Tax,
imposed upon the Excise Tax Adjustment Payment, Executive shall
retain an amount of the Excise Tax Adjustment Payment equal to
the Excise Tax imposed upon the payments.
(b) All determinations required to be made under this Section 9,
including whether an Excise Tax Adjustment Payment is required
and the amount of such Excise Tax Adjustment Payment, shall be
made by Coopers & Xxxxxxx, L.L.P. or such accounting firm as the
Company may designate prior to a Change of Control, which shall
provide to the Company and Executive detailed supporting
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calculations within 15 business days of the date of Executive's
termination of Employment. Except as hereinafter provided, any
determination by Coopers & Xxxxxxx, L.L.P. or such other
accounting firm as the Company may designate prior to a Change of
Control shall be binding upon the Company and Executive. As a
result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination hereunder, it
is possible that (x) Excise Tax Adjustment Payments which should
have been made will not have been made by the Company
("Underpayment"), or (y) certain Excise Tax Adjustment Payments
will have been made which should not have been made
("Overpayment"), consistent with the calculations required to be
made hereunder. In the event of an Underpayment, the Company
shall promptly determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the
Company to or for Executive's benefit. In the event that
Executive discovers that an Overpayment shall have occurred, the
amount thereof shall be promptly repaid to the Employer.
9. The Employment Agreement is hereby amended to add, immediately prior
to the first sentence of Section 13(d), the following:
It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in this Agreement to be
reasonable, if a final judicial determination is made by a tribunal of
competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable
restriction against Executive, the provisions of this Agreement shall
not be rendered void but shall be deemed amended to apply to such
maximum time and territory and to such maximum extent as such tribunal
may determine or indicate to be enforceable.
10. The Employment Agreement is hereby amended to add a new Section 13(i),
(j) and (k) to read as follows:
(i) Non-Disparagement. Executive and the Company shall each use all
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reasonable efforts not to make any statements or take any action
that may be derogatory or disparaging to the reputation of the
other or, in the case of the Executive, to the reputation of any
of the Company's affiliates. Notwithstanding the foregoing,
nothing in this Agreement shall preclude either party from
truthful statements or disclosures that are required by
applicable law or regulation, or from taking any position in
prosecuting or defending any judicial, administrative or
arbitration proceeding arising hereunder.
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(j) Cooperation. Executive agrees that following termination of
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Executive's employment with the Company prior to a Change in
Control for a period ending on the earlier to occur of the fifth
anniversary of such termination or a Change in Control, Executive
shall make himself reasonably available to the Company and its
legal counsel, taking into consideration Executive's other
obligations, and shall cooperate with the Company in connection
with any litigation, investigation or other proceeding relating to
events occurring during Executive's employment hereunder or facts
as to which he has knowledge; provided that Executive shall be
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entitled to reimbursement of necessary and reasonable expenses
incurred in connection therewith subject to provision of receipts
therefor and provided further that (i) nothing herein shall
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require Executive to make any but truthful statements and (ii)
Executive will not be required so to cooperate to the extent his
position is in conflict with that of the Company.
(k) Non-Competition/Non-Solicitation. (i) Executive acknowledges and
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recognizes the highly competitive nature of the business of the
Company and its affiliates and accordingly hereby agrees, in
consideration of the agreements herein of the Company, that from
the date hereof through the termination of Executive's employment
with the Company and, if such termination occurs prior to a Change
in Control, through the two year period following such termination
of Executive's employment, (x) Executive shall not alone, or as a
partner, member, employee, agent, director, stockholder or
investor of any corporation or other business entity or in any
other individual or representative capacity, directly or
indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or work or provide
consulting services to (including, without limitation, without
receiving a fee or other compensation), or lend money to, any
business, activity or person which competes with a business or
activity in North America, Europe and Asia in which the Company is
engaged or in which the Company or its affiliates is actively and
seriously considering engaging at the time in question in the case
of conduct during such employment or at the time of Executive's
termination of employment in the case of conduct during such two
year period; provided the foregoing shall not prohibit Executive
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from directly or indirectly making passive investments of not more
than one percent (1%) of the outstanding equity interests in, or
public debt of, any company or entity listed or traded on a
national securities exchange or an over the counter securities
market and (y) Executive shall not, directly or indirectly,
recruit, seek to recruit, or hire any present or former employee
of the Company or any of its subsidiaries (level 30 or above)
until at least one year has passed from
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the date of termination of such person's employment with the
Company or any of its subsidiaries.
(ii) Executive hereby acknowledges that the business of the Company
and its affiliates is international in scope and that, accordingly,
any geographical limitation on the scope of the foregoing covenant
to less than that specified therein could be meaningless, and that,
by reason thereof, Executive acknowledges that the scope of the
foregoing covenant is reasonable and necessary in order to protect
the interests of the Company and its affiliates sought to be
protected hereby.
(iii) The parties acknowledge and agree that their respective
remedies for a breach or threatened breach of any of the provisions
of Section 13 (i), (j) or (k) would be inadequate and, in
recognition of this fact, the parties agree that, in the event of
such a breach or threatened breach, in addition to any remedies at
law, the aggrieved party, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific
performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be
available.
11. Except as provided by this Amendment, the Employment Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to be
effective as of April 1, 1998.
/s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
XXXXX XXXXXXXX INTERNATIONAL, INC.
/s/ X. X. Xxxxx
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X.X. Xxxxx
Chairman, Chief Executive Officer
and President
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ATTEST:
/s/ Xxxxxxx X. Xxx Xxxx
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Xxxxxxx X. Xxx Xxxx
Executive Vice President,
General Counsel and Secretary
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