Exhibit 10.42
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is made and
entered into as of November 15, 2002, by and between Xxxxxxxx X. Xxxx, an
individual resident of the State of Florida ("Employee"), and Horizon Medical
Products, Inc., a Georgia corporation ("Employer");
WITNESSETH:
WHEREAS, Employee and Employer entered into that certain Employment
Agreement dated March 16, 2002 (the "Employment Agreement") and desire to amend
the Employment Agreement in the manner hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto intending to be legally bound hereby agree as follows:
1. The Employment Agreement is hereby amended by deleting the
first paragraph in Section 2 in its entirety and by substituting in lieu
thereof the following first paragraph in Section 2:
The term of Employee's employment hereunder (the
"Term") shall be from March 16, 2002 (the "Effective Date")
until the earlier of (i) April 1, 2004 or (ii) the occurrence
of any of the following events:
2. The Employment Agreement is hereby amended by deleting
subsection (a) in Section 3.1 in its entirety and by substituting in lieu
thereof the following subsection (a) in Section 3.1:
(A) SALARY. Employee will be paid a salary (the
"Salary") of no less than Two Hundred Seventy
Thousand Dollars ($270,000.00) per annum, less
deductions and withholdings required by applicable
law. Commencing on the date of the Amendment dated
November 15, 2002 to this Employment Agreement,
Employee will be paid a Salary of no less than Two
Hundred Eighty Three Thousand Five Hundred Dollars
($283,500.00) per annum, less deductions and
withholdings required by applicable law. The Salary
shall be paid to Employee in equal monthly
installments (or on such more frequent basis as
other executives of Employer are compensated).
3. The Employment Agreement is hereby amended by deleting the
last two sentences in Section 3.1(b)(i), pertaining to Employee's bonus for the
first quarter of 2003 and by substituting in lieu thereof the following
addition to Section 3.1(b)(i):
For fiscal year 2003, Employee will be entitled to
an annual bonus (the "2003 Bonus"), based upon Employer's
achievement during 2003 of net sales and EBITDA under
Employer's operating plan for 2003 that has been approved by
the Board of Directors of Employer (the "Operating Plan"), as
follows:
(A) If Employer's actual net sales during 2003
are greater than fifty percent (50%) of the
net sales for 2003 as reflected in the
Operating Plan, then Employee will be
entitled to a 2003 Bonus under this
subparagraph (A) calculated under the
formula X times Y times the Bonus
Percentage, where X is Employee's Salary
for 2003 and Y is 50%. The Bonus Percentage
is determined by dividing actual net sales
by Operating Plan net sales for 2003; where
the result of such division is greater than
50%, but less than 76%, the Bonus
Percentage is 50%, where the result of such
division is 76% or more, but less than
100%, the Bonus Percentage is 75%, and
where the result of such division is 100%
or greater, the Bonus Percentage is 100%.
(B) If the Employer's actual EBITDA for 2003 is
greater than fifty percent (50%) of the
EBITDA for 2003 as reflected in the
Operating Plan, then Employee will be
entitled to a 2003 Bonus under this
subparagraph (B) calculated under the
formula X times Y times the Bonus
Percentage, where X is Employee's Salary
for 2003 and Y is 50%. The Bonus Percentage
is determined by dividing actual EBITDA by
Operating Plan EBITDA for 2003; where the
result of such division is greater than
50%, but less than 76%, the Bonus
Percentage is 50%, where the result of such
division is 76% or more, but less than
100%, the Bonus Percentage is 75%, and
where the result of such division is 100%
or greater, the Bonus Percentage is 100%.
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(C) For purposes of the 2003 Bonus, in the
event Employer sells a product line or
division during 2003 or in the event that
Employer is acquired by a third party
during 2003, then the 2003 Bonus shall be
calculated using actual net sales and
EBITDA through the month end immediately
prior to such sale or acquisition and using
net sales and EBITDA under the Operating
Plan the through such month end.
(D) The 2003 Bonus, if earned, will be payable
to Employee on the next pay period after
the 2003 audited financial statements are
finalized.
Employee shall also be entitled to receive a
prorated Bonus, calculated on the formula set forth in the
first paragraph of this Section 3.1(b)(i), for the period
commencing January 1, 2004 and terminating on March 31, 2004
based upon the achievement during such period of an earnings
per share increase of either twenty-five percent (25%) or
thirty-five percent (35%), as described above, when compared
with the same period during 2003. Such Bonus for 2004, if
any, shall be payable May 1, 2004.
4. The Employment Agreement is hereby amended by adding a new
Section 4A to the Employment Agreement, as follows:
SECTION 4A. OPTIONS UNDER INCENTIVE STOCK PLAN.
The Executive Committee of the Board of Directors of
Employer will grant to Employee options to purchase one
million (1,000,000) shares of common stock of Employer under
and subject to Employee's 1998 Stock Incentive Plan, as
amended (the "Plan"). Under the Plan, to the extent the
options are ISOs under the Plan, the option price will be one
hundred ten percent (110%) of the Fair Market Value (as
defined in the Plan) of a share of Employer's common stock on
the date the option is granted. Under the Plan, to the extent
the options are non-ISOs under the Plan, the option price
will be the Fair Market Value (as defined in the Plan) of a
share of Employer's common stock on the date the option is
granted. The options for such 1,000,000 shares shall vest and
become fully exercisable under and subject to the Plan as
follows: On June 1, 2003, options for such number of shares
that when multiplied by
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the option price equals $100,000.00; on April 1, 2004,
options for such number of shares that when multiplied by the
option price equals $100,000.00; on April 1, 2005, options
for such number of shares that when multiplied by the option
price equals $100,000.00; and options for the remainder of
such shares on April 1, 2005. Upon a Change in Control (as
defined in the Plan), all unvested options then held by
Employee shall vest in full immediately prior to the
occurrence of such Change in Control if Employee is an
employee of Employer on the date of such vesting. Upon
Employer's termination of Employee's employment pursuant to
Section 2(c) above, all unvested options then held by
Employee pursuant to the above grant shall vest in full on
the date of notice under Section 2(c) above.
5. Except as expressly amended above, all other provisions of
the Employment Agreement shall remain in full force and effect. This Amendment
inures to the benefit of, and is binding upon, Employer and its respective
successors and assigns and Employee, together with Employee's executor,
administrator, personal representatives, heirs, and legatees. This Amendment is
intended by the parties hereto to be the final expression of their agreement
with respect to the subject matter hereof and is the complete and exclusive
statement of the terms thereof, notwithstanding any representations,
statements, or agreements to the contrary heretofore made. Except for the
Employment Agreement, this Amendment supersedes and terminates all prior
agreements and understandings between Employer and Employee concerning the
subject matter of this Amendment. This Amendment may be modified only by a
written instrument signed by all of the parties hereto. This Amendment shall be
deemed to be made in, and in all respects shall be interpreted, construed, and
governed by and in accordance with, the laws of the State of Georgia without
reference to its conflicts of law principles. This Amendment may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxx, Xx., President
EMPLOYEE:
/s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx
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