EXHIBIT 10(z)
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 dated as of May 13, 2003 amends the Employment
Agreement by and between XXXXX REALTY INVESTORS, INC., a Michigan corporation
(the "Company"), and XXXXXXX X. XXXXXXXXX ("Executive") dated as of July 16,
2002 (the "Agreement").
RECITALS
The Company has previously entered into one or more Option Agreements
with Executive pursuant to the Xxxxx Realty Investors, Inc. 1994 Stock Option
Plan (the "Option Plan").
In August 2002, the Company's shareholders approved a plan of
liquidation for the Company (the "Plan of Liquidation"). Each time the Company
makes any distributions to its shareholders pursuant to the Plan of Liquidation,
the market price of the Company's common stock is expected to decline. If
Executive were to exercise options following a liquidating distribution,
Executive would be in the anomalous situation of having to sell the shares
acquired upon exercise of the options at a lower price than what could have been
expected absent liquidation.
The Company wishes to correct this anomalous situation and give
Executive the benefit of the options by allowing Executive to participate in
that portion of liquidating distributions that exceed the exercise price of the
options.
Accordingly, the parties agree as follows:
1. CASH BONUSES IN LIEU OF OPTIONS.
(a) Executive hereby agrees to the cancellation by, and
hereby surrenders to, the Company effective as of the date of this
Amendment all stock options held by Executive under the Option Plan,
all of which are more particularly described on EXHIBIT A.
(b) In consideration of such cancellation and
surrender, the Company agrees than when aggregate liquidating
distributions per share made to Company shareholders pursuant to the
Plan of Liquidation after the date of this Amendment reach the levels
set forth below, Executive shall be entitled, subject to the terms and
conditions set forth herein, to receive a cash bonus (each, a
"Liquidation Bonus") such that aggregate Liquidation Bonuses paid to
Executive pursuant to this Section 1 total the amount set opposite the
applicable level of per share liquidating distributions (which amounts
represent liquidating distributions in excess of the average price of
all of Executive's options, regardless of when first exercisable):
AGGREGATE PER SHARE CUMULATIVE AMOUNT OF
LIQUIDATING DISTRIBUTIONS LIQUIDATION BONUS
$ 4.25 $ 7,500
4.50 15,000
4.75 22,500
5.00 30,000
5.25 37,500
5.50 45,000
5.75 52,500
6.00 60,000
6.25 67,500
6.50 75,000
6.75 82,500
7.00 90,000
7.25 97,500
7.50 105,000
7.75 112,500
8.00 120,000
8.25 127,500
8.50 135,000
8.75 142,500
9.00 150,000
For example, when aggregate per share liquidating distributions of
$4.25 have been paid, Executive will be entitled to a Liquidation Bonus
of $7,500. When aggregate liquidating distributions reach $4.50 per
share, Executive will be entitled to receive another Liquidation Bonus
of $7,500, resulting in cumulative Liquidation Bonuses of $15,000.
(c) Each Liquidation Bonus will be paid as soon as practicable
after the applicable liquidating distribution is paid to shareholders,
less any federal, state and local taxes required to be withheld
thereon. If the Company makes a liquidating distribution in a form
other than cash, the Company's board of directors shall in good faith
determine the fair market value per share of the liquidating
distribution for purposes of determining the amount of any Liquidation
Bonus to be paid to Executive hereunder, which in the Company's
discretion may be paid in cash or in kind.
(d) When the Company makes its final liquidating distribution,
if aggregate liquidating distributions exceed $4.25 per share, the
Liquidation Bonus relating to the final liquidating distribution shall
be prorated based on the amount of the final liquidating distribution
to the extent that the final distribution does not reach the next
threshold for the payment of the next Liquidation Bonus. For example,
if aggregate liquidating distributions of $7.00 per share have been
made, Liquidation Bonuses totaling $90,000 have been paid, and the
final liquidating distribution is $0.125 per share, Executive would be
entitled to a final Liquidation Bonus of $3,750.
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(e) Anything herein to the contrary notwithstanding, Executive
shall not be entitled to a Liquidation Bonus to the extent that such
bonus represents cash in excess of the exercise price of an option
that, absent this Amendment, would have expired or terminated pursuant
to its terms before the record date for the liquidating distribution to
which the Liquidation Bonus relates (for example, if Executive ceases
to be an employee of the Company within one year after the date of
grant of the option for any reason other than death, disability or
retirement).
2. ASSIGNMENT TO LIQUIDATING TRUST. The Company may form a
liquidating trust in connection with winding down the Company's business (the
"Liquidating Trust"). The Company may assign the Agreement, as amended hereby,
to a Liquidating Trust provided that the Liquidating Trust assumes each and
every obligation of the Company thereunder, including the obligation to pay
Liquidation Bonuses. Such assignment shall not be deemed a termination by the
Company entitling Executive to severance compensation from the Company pursuant
to the Agreement.
3. NO OTHER CHANGES. Except as expressly amended hereby, the
provisions of the Agreement shall continue to remain in full force and effect.
XXXXX REALTY INVESTORS, INC.
By:
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Name:
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Title:
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Xxxxxxx X. Xxxxxxxxx
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EXHIBIT A
CANCELLED OPTIONS
DATE OF AGREEMENT NUMBER OF SHARES EXERCISE PRICE
----------------- ---------------- --------------
06/17/1994 25,000 $17.00
01/20/1995 22,350 $13.375
03/19/1996 15,250 $14.375
09/25/2000 5,000 $13.438
XXXXX REALTY INVESTORS, INC.
By:
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Name:
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Its:
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XXXXXXX X. XXXXXXXXX
