SEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SEVENTH AMENDMENT TO EMPLOYMENT AGREEMENT is made effective
the 6th day of January, 1998, by and between XXXXXXX COMPUTER
RESOURCES, INC., a Delaware corporation ("Company") and XXXXX X.
XXXXXXX, XX (the "Executive").
WHEREAS, on the 12th day of March, 1992, Company and Executive
executed an Employment Agreement ("Agreement") that became
effective on the date of the closing of the initial public
offering of the Company (April 10, 1992); and
WHEREAS, Company and Executive entered into an Amendment to
Employment Agreement effective July 6, 1993; and
WHEREAS, Company and Executive entered into a Second Amendment to
Employment Agreement effective October 14, 1993;
WHEREAS, Company and Executive entered into a Third Amendment to
Employment Agreement effective January 6, 1995;
WHEREAS, Company and Executive entered into a Fourth Amendment to
Employment Agreement effective for the fiscal year ending January
5, 1996;
WHEREAS, Company and Executive entered into a Fifth Amendment to
Employment Agreement effective January 6, 1996;
WHEREAS, Company and Executive entered into a Sixth Amendment to
Employment Agreement effective January 6, 1997; and
WHEREAS, Company and Executive desire to amend the Agreement, as
amended, to reflect certain changes agreed upon by Company and
Executive regarding compensation payable to Executive for the
1998 fiscal year and thereafter.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants hereinafter set forth, the parties hereto
covenant and agree as follows:
1. Section 5(a)(iii) shall be amended as follows:
(iii) During the Company's 1998 fiscal year, Executive
shall be paid at the annual rate of $475,000.00. This
rate shall continue for each subsequent year of the
Agreement unless modified by the Compensation Committee
as provided in Section 5(a)(iv).
2. Section 5(b)(i) is amended commencing with the 1998 fiscal
year as follows:
(i) Executive shall be entitled to a bonus and non-
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qualified stock option award for the 1998 fiscal year
in the event Employee satisfies the applicable criteria
set forth below of the income from operations (as
defined) of the Company for 1998, as follows:
(i) Income from operations greater than $28,000,000.00
but less than or equal to $33,000,000.00 =
$200,000.00 cash bonus and 25,000 non-qualified
stock options;
(ii) Income from operations greater than $33,000,000.00
but less than or equal to $38,000,000.00 =
$300,000.00 cash bonus and 50,000 non-qualified
stock options; or
(iii) Income from operations greater than
$38,000,000.00 = $400,000.00 cash bonus and 75,000
non-qualified stock options.
Within thirty (30) days of the conclusion of the 1998 fiscal
year of the Corporation and each fiscal year thereafter,
Executive and Company shall agree upon the threshold of
operating income to be utilized for determining any bonus
and non-qualified stock options to be awarded to Executive
for such year. Such bonus and non-qualified stock option
awards for each subsequent year of this Agreement shall be
consistent with Executive's prior plan.
Any award of stock options to acquire the common stock of
the Company shall be at the fair market value of such common
stock as of the applicable date. For purposes of this
Agreement, the fair market value as of the applicable date
shall mean with respect to the common shares, the average
between the high and low bid and asked prices for such
shares on the over the counter market on the last business
day prior to the date on which the value is to be determined
(or the next preceding date on which sales occurred if there
were no sales on such date).
For purposes of this Agreement, the term _income from
operations_ shall be computed without respect to the bonus
payable to the Executive pursuant to this Section 5(b)(i)
and shall exclude any gains or losses realized by the
Company on the sale or other disposition of its assets
(other than in the ordinary course of business). Such
income from operations of the Company shall be determined on
a consolidated basis by the independent accountant regularly
retained by the Company, subject to the foregoing provisions
of this subparagraph (i) in accordance with generally
accepted accounting principles. Said determination and
payment of such bonus shall be made within ninety (90) days
following the end of the fiscal year of the Company and the
determination by the accountant shall be final, binding and
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conclusive upon all parties hereto. In the event the
audited financial statements are not issued within such
ninety-day period, the Company shall make the payment due
hereunder (if any) based on its best reasonable estimate of
any liability hereunder, which amount shall be reconciled by
both parties once the audited financial statements are
issued. Company shall have the ability to advance amounts
to Executive based on the projected amount of the bonus
compensation to be paid hereunder. In the event that such
advance payments are in excess of the amount due hereunder,
any such excess shall be reimbursed to Company by Executive
within ninety (90) days following the end of the fiscal
year. In the event such advance payments are less than the
amount of said bonus as determined hereunder, any additional
amount due Executive shall be paid within ninety (90) days
following the end of the fiscal year of the Company.
3. Section 5(h) is amended as follows:
Effective upon the Trustee under Executive's Irrevocable
Trust obtaining an additional one million dollars of whole
life coverage on the life of Executive at standard rates,
line 9 of Section 5(h) is amended by inserting $2,000,000.00
in lieu of $1,000,000.00.
4. The Agreement shall be amended by adding at the end of
Section 5(h), the following Section 5(i):
5(i) Flight Time Business Usage (Cincinnati Air). In the
event of a Change in Control as defined under the terms
of this Agreement, Executive shall be provided each
year with one hundred (100) hours of flight time for
business usage by private air carrier provided by
Cincinnati Air or some other executive jet services
that may be designated by Executive. In the event
Executive does not use such designated hours of flight
time for business usage during any particular year
after a Change of Control has occurred, no carryover
shall exist for any unused time.
5. This Agreement shall be amended by adding at the end of the
Agreement, the following new Section 5(j):
5(j) During the term of this Agreement, Company shall pay
Executive the sum of Five Thousand Dollars ($5,000.00)
per month to enable Company to utilize real estate
owned by Executive in Desert Mountain, Arizona for the
purposes of conducting business related to Company's
operations in the Midwest and Southwest portions of the
United States and for periodic Board of Directors
meetings. Company and Executive shall agree upon
designated times for use of such property for the
purposes set forth above.
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6. Section 19 shall be amended by adding at the end of such
Section, the following language:
Executive shall be awarded, effective January 6, 1998, an
option to acquire 25,000 shares of the common stock of
Company at the fair market value of such shares on January
3, 1998 (the first business day prior to January 5, 1998).
Such option shall be awarded to Executive by Company
pursuant to the terms of an Award Agreement which is
attached hereto and incorporated herein by reference as
Exhibit C.
Except as modified above, the terms of the Employment Agreement,
as amended, are hereby affirmed and ratified by the parties.
IN WITNESS WHEREOF, this Seventh Amendment to Employment
Agreement has been executed as of the day and year first above
written.
WITNESSES: XXXXXXX COMPUTER RESOURCES, INC.
_______________________
_______________________ By:
______________________________
_______________________
_______________________
__________________________________
XXXXX X. XXXXXXX, XX, Executive
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