SECOND AMENDMENT TO
EMPLOYMENT AND NONCOMPETE AGREEMENT
THIS SECOND AMENDMENT TO EMPLOYMENT AND NONCOMPETE AGREEMENT ("Second
Amendment") , effective as of the 14th day of September, 1996, by and between J.
XXXXXX XXXX, XX., an individual resident of Gastonia, North Carolina
("Employee") , and AMERICAN STUDIOS, INC., a North Carolina corporation with its
principal executive offices in Charlotte, North Carolina ("ASI").
Background Statement
Employee and ASI are parties to an Employment and Noncompete Agreement
dated as of January 20, 1993 and the First Amendment To Employment and
Noncompete Agreement dated as of November 1, 1995 (collectively, the "Employment
Agreement"). The Employment Agreement provides, among other things, for certain
severance payments to Employee in the event of Employee's termination of
employment without cause. ASI and the Employee now desire to amend the
Employment Agreement to provide for certain severance payments to be made to
Employee in the event a termination of employment either precedes or follows a
change in the control of ASI.
Statement of Amendment
In consideration of the premises and of the mutual covenants and
conditions contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree for themselves, their successors and
assigns as follows:
1. Definitions. In the Employment Agreement or in this Second Amendment, the use
of the word "Agreement" or the term "Employment Agreement" shall mean the
Employment Agreement as amended by this Second Amendment, and references to
particular section numbers or paragraph numbers or the use of terms such as
"this section" or "this paragraph" shall refer to appropriate sections or
paragraphs of the Employment Agreement as amended by this Second Amendment.
Defined terms used in the Employment Agreement that are redefined in
this Second Amendment shall have the meanings given to them in this Second
Amendment. Defined terms used, but not defined, in this Second Amendment shall
have the meanings given to them in the Employment Agreement.
2. Termination Without Cause. Section 5, Termination Without Cause, is hereby
amended as follows:
The Board of Directors may terminate Employee's employment at any
time, without cause. In the event of a termination other than a Termination for
Cause, as herein defined, or in the event the Company fails or refuses to renew
this Employment Agreement for any reason at the end of the
term of employment, the Company will pay Employee the higher of (i) $314,000
or (ii) his Base Rate at the time of termination as set under Paragraph
4 above as additional compensation for twelve months following such
termination or failure to renew.
If Employee's employment with ASI is terminated at any time following a Change
in Control Event, as defined below, or if Employee's employment by ASI is
terminated prior to a Change in Control Event at the request of any individual
or entity acquiring ownership and control of ASI, Employee shall be entitled to
receive, either in a lump sum or in 26 equal bi-weekly payments, at the option
of the Company, two (2) times the Employee's then Base Rate as additional
compensation.
Each of the following events shall constitute a Change in Control Event:
o Any person or entity of whatsoever nature, including without
limitation an individual, corporation, partnership, limited liability
company or trust, either singly or together with that person's or
entity's affiliates or associates (as "affiliate" or "associate" are
defined in connection with Rule 12b-2 of the Securities Exchange Act
of 1934) is or becomes the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly, of
securities of ASI representing fifty percent or more of the then
outstanding securities entitled to vote in the election of directors
of ASI and in any filing made under Section 13(d) of the Securities
Exchange Act of 1934 or otherwise states an intention to acquire or
exercise control of ASI or to otherwise influence management.
o A public announcement is made of a tender or exchange offer by any
person or entity, including without limitation an individual, company,
corporation, partnership, limited liability company or trust, for fifty
percent or more of the outstanding shares of ASI entitled to vote in
the election of directors, and the Board of Directors approves or fails
to oppose that tender or exchange offer in its statements in Schedule
14D-9 under the Exchange Act.
o The stockholders of ASI approve a merger or consolidation of ASI with
any other corporation or partnership (or, if no such approval is
required, the consummation of such a merger or consolidation of ASI),
other than a merger or consolidation that would result in the
securities of ASI entitled to vote in the election of directors
outstanding immediately before the consummation thereof continuing to
represent (either by remaining outstanding or by being converted into
voting shares of the surviving entity or of a parent of the surviving
entity) fifty percent or more of the combined voting power of the
voting shares of the surviving entity (or its parent) outstanding
immediately after that merger or consolidation.
3. Miscellaneous. ASI and Employee reaffirm the Employment Agreement, and all
provisions thereof not expressly amended hereby shall remain in full force and
effect.
IN WITNESS WHEREOF, J. Xxxxxx Xxxx, Xx. has set his hand and seal hereto and
American Studios, Inc. has caused this Second Amendment to Employment and
Noncompete Agreement to be sealed and executed in its name by its duly
authorized officials effective as of the day and year first above written.
Employee:
/s/Xxxxx Xxxxxx Xxxx, Xx. (SEAL)
--------------------------------------
Xxxxx Xxxxxx Xxxx, Xx.
American Studios, Inc.
/s/R. Xxxx Xxxxx
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By: R. Xxxx Xxxxx
President
[CORPORATE SEAL]
ATTEST:
/s/ Xxxxx X. Xxxxx
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Secretary
