Exhibit
10.2
1998 AMENDMENT TO
SECOND RESTATED AMENDED EMPLOYMENT AGREEMENT
AMENDMENT TO SECOND RESTATED AMENDED EMPLOYMENT AGREEMENT, dated
November 11, 1992, as amended by a Corrective Amendment , dated May 18, 1994,
and by an Amendment, dated February 27, 1997, effective as of December 31, 1996
(as so amended, the "Employment Agreement"), between XXXXX MEDICAL CORP., a
Delaware corporation (the "Employer"), and XXXX X. XXXX of 000 Xxxx Xxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxxxx 00000 (the "Employee").
The Employer and Employee herewith agree that the Employment Agreement is
further amended as follows:
1. Amended Term. The first sentence of Section 1 of the Employment Agreement is
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herewith deleted and replaced by the following:
Continuing from January 1, 1998 and for a period through December
31, 1998 (subject to the provisions of paragraphs 8 and 9,
relating to death and incapacity) (the "Term"), the Employer
shall employ the Employee, and the Employee shall serve the
Employer and perform the chief executive and administrative
duties of President of the Employer, subject at all times to the
general supervision and direction of the Board of Directors and
the Executive Committee of the Board of Directors of the
Employer.
2. Amended Salary. Section 2 of the Employment Agreement is herewith deleted
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and replaced by the following:
As compensation, the Employer shall pay the Employee a salary for
his services (a) at the rate of $421,173 per annum for the period
from January 1, 1998 through February 28, 1998, and (b) at the
rate of $360,000 per annum for the period during the Term from
March 1, 1998 through December 31, 1998. For purposes of this
Agreement, the term "Base Salary" shall mean a salary at the rate
of $360,000 per annum.
3. Amended Incentive Compensation. Section 3 of the Employment Agreement is
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herewith deleted and replaced by the following:
(a) As incentive compensation, the Employer shall pay the
Employee, within 75 days after the end of its 1998 fiscal
year, the percentage of his Base Salary set forth in Column
A if its pre-tax income for said fiscal year, as shown in
its audited financial statements for the year (subject to
adjustment as hereinafter provided for), exceeds the amount
set forth opposite said percentage in Column B:
A B
- -
55.0% $5,735,000
49.5% $5,485,000
44.0% $5,235,000
38.5% $4,985,000
33.0% $4,735,000
27.5% $4,485,000
22.0% $4,235,000
16.5% $4,000,000
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No such incentive compensation shall be paid if the
Employer's pre-tax income for said year does not exceed
$4,000,000. If the pre-tax income shown on said financial
statements is effected by any charge or associated cost or
change in a prior year's reserve relating to a federal
government contract pricing deficiency, for purposes of
Column B the amount of such pre-tax income shall be subject
to such adjustment (if any) as the Compensation Committee of
the Board of Directors of the Employer may, in its sole and
absolute discretion, determine.
(b) Section 3(e) of the Second Restated Amended Employment
Agreement effective as of January 1, 1993 between the
Employer and the Employee is herewith reinstated and
incorporated by reference herein with the same effect as if
set out herein in full.
4. Change of Control. Sections 4(a) and 4(b) of said Second Restated
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Amended Employment Agreement is herewith reinstated and incorporated
by reference herein with the same effect as if set out herein in full,
except that:
(a) the period at the end of Section 4(b)(ii) thereof shall be
deemed deleted and replaced by a comma, and the following shall be
deemed added following "such acquiring person or entity," in Section
4(b) thereof:
or
(iii) either (x) the election or removal of a majority of the
directors of the Employer as a result of a solicitation subject
to Rule 14a-11 (or successor Rule) under the Securities Exchange
Act of 1934 relating to the election or removal of directors, or
(y) the election of directors constituting a majority of the
directors of the Employer by other than the action of directors
a majority of whom consist of Continuing Directors; for purposes
hereof, a Continuing Director" means a director (aa) for whose
election the Employer solicited proxies pursuant to a proxy
statement under Regulation 14A of said Act, or (bb) who was
elected by action of the directors a majority of whom were
elected as described in clause (aa) hereof, or (cc) who was
elected by action of directors a majority of whom were elected as
described in clause (aa) and/or clause (bb) hereof.
(b) the clause "three years" appearing in Section 4(a)(i) shall be
deleted and replaced by the clause "one year", and
(c) the following clause in Section 4(a), following Section 4(a)(ii):
an amount equal to three times the average of the prior five
calendar year's compensation (including pension, profit sharing
and 401(k) contributions, and payment under paragraph 7) accrued
by the Employer for the Employee's compensation, as reflected in
the Employer's financial statements used for purposes of
paragraph 3(c) hereof,
shall be replaced by the clause:
an amount equal to the Base Salary.
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IN WITNESS WHEREOF, the parties have executed this amendment to the Employment
Agreement on March 20, 1998, effective as of January 1, 1998.
XXXXX MEDICAL CORP.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Chairman of
the Board of Directors
/s/ Xxxx X. Xxxx
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XXXX X. XXXX
00
