EXHIBIT 10.24(A)
XXXXXX A.S.L., LTD.
October 31, 2002
Xx. Xxx X. Xxxxx
00 Xxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Xxx:
This letter, when countersigned by you, will confirm our agreement to
amend the terms of the Company's employment agreement with you (the "Agreement")
dated March 25, 2002 regarding your participation in the Company's intended
equity award program, so as to provide as follows (all terms used but not
defined herein shall have the respective meanings set forth in the Agreement):
1. Termination After a Change in Control.
In the event Executive's employment is terminated by the Company
without Cause, or if Executive's duties or responsibilities are significantly
reduced or made inconsistent with Executive's title or position and as a result
Executive elects to terminate his employment, within 12 months following a
Change of Control, Executive shall be entitled to the same compensation and
benefits described in Section 4(a) of the Agreement with respect to any
termination by the Company without Cause, PLUS an amount equal to Executive's
annual base salary on the effective date of termination (the "Supplemental
Payment"). The Supplemental Payment shall be paid to Executive in one lump sum
within twenty (20) days after the effective date of such termination, it being
the intent of the parties that the Supplemental Payment shall not be reduced by
any compensation thereafter actually received by Executive as a result of
Executive's employment or retention by another employer in any capacity.
A "Change in Control" shall be deemed to have occurred if (i) any
"Person" (as such term is used in Section 13(d) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) becomes the "beneficial owner" (as
determined pursuant to Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company's then outstanding securities,
other than any person who acquires five percent (5%) or more of the outstanding
common stock of the Company in accordance with a plan of reorganization under
chapter 11 of Title 11 of the United States Code (a "Chapter 11 Plan"), or (ii)
the Company shall merge with or consolidate into any other entity, other than a
merger or consolidation which would result in the holders of the voting
securities of the Company outstanding immediately prior thereto holding
immediately thereafter securities representing more than fifty percent (50%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation or
(iii) the stockholders of the Company approve and effect an agreement for the
sale or disposition by the Company of all or substantially all of the Company's
assets. Notwithstanding the foregoing, no Change in Control of the Company shall
be deemed to have occurred by virtue of any transaction which results in
Executive, or any group, association or other organization of persons related
to, including, or acting in concert with Executive ("Related Persons"),
acquiring, directly or indirectly, any interest in the Company which would
otherwise constitute a Change of Control. Further, the restriction in the
preceding sentence shall apply in the event of Executive's employment by, or any
other business affiliation with, any such Related Persons or the Company after
such Change of Control for a period of 12 months following such Change of
Control.
2. Supplemental Payment if Incentive Plan Distributions Are not Made.
In the event that, within twelve (12) months after the effective date (the
"Emergence Date") of the Company's plan of reorganization under the Bankruptcy
Code (the "Plan"), the Company has failed to grant Executive restricted shares
and options of the Company's stock as described in paragraph 3 below, the
Company shall, within thirty (30) days after the expiration of such twelve (12)
month period after the Emergence Date, make the Supplement Payment to Executive
as set forth in paragraph 1 above, but the making of the Supplemental Payment
shall constitute Executive's sole and exclusive remedy for any failure by the
Company to grant such restricted shares and options.
3. Equity Awards. Upon the approval of this letter agreement by
Bankruptcy Court in the Company's pending bankruptcy cases, the terms of Section
3(c) of the Agreement shall be of no further force or effect, and the following
provisions shall govern Executive's rights in respect of participating in the
Company's intended stock plan:
a. Restricted Stock. As of the Emergence Date, the Company shall
issue to the Executive restricted shares of its common stock (rounded up to the
nearest whole share) having a value, based on the "Ascribed Value" (as
hereinafter defined) equal to one-half of one percent (0.5%) of the number of
shares issued under the Plan. Fifty percent (50%) of the shares shall vest on
the second (2nd) anniversary of the Emergence Date and twenty-five percent (25%)
shall vest on each of the third and fourth anniversaries of the date of the
Emergence Date; provided that, at least once commencing on or after the
Emergence Date, for a period of twenty (20) consecutive trading days, the
closing sales price of a share of such stock is at least one hundred and fifty
percent (150%) of the Ascribed Value. All shares so issued shall be
nontransferable by the Executive until they are vested, provided that the
Executive shall be entitled to receive all dividends paid on such shares and
shall be entitled to vote them. Any shares that are not vested shall become
vested (and the Executive shall own the shares outright) upon any Change in
Control of the Company or on the tenth (10th) anniversary of the date the shares
are issued. All other terms of the restricted stock shall be consistent with the
terms of the Company's stock plan, as in effect on the Emergence Date. The term
"Ascribed Value", as used herein, shall mean the value ascribed to shares of the
common stock of the Company for purposes of issuing and distributing its common
stock on the Emergence Date pursuant to the Plan.
c. Options. As of the Emergence Date, the Company shall grant the
Executive options to purchase shares of the Company's common stock (on a fully
diluted basis) equal to one-half of one percent (0.5%) of the total number of
shares issued under the Plan. The per share exercise price under the options
shall be an amount equal $80,000,000.00 divided by the total number of shares
issued under the Plan, irrespective of the Ascribed Value. The options shall
vest and become exercisable ratably on the first four (4) anniversaries of the
Emergence Date, provided that (A) (i) the Executive is employed on such date and
(ii) at least once commencing on or after the Emergence Date, for a period of
twenty (20) consecutive trading days, the closing sales price of a share of the
Company's common stock is at least one hundred and fifty percent (150%) of the
Ascribed Value, and (B) if earlier, the options shall fully vest upon any Change
in Control or on the tenth (10th) anniversary of the date of the options are
issued. The non-vested portion of such options shall be forfeited and cancelled
on Executive's termination of employment. All other terms of the options shall
be consistent with the terms of the Company's stock plan, as in effect on the
Emergence Date.
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Please confirm your agreement to the above modifications by executing
the enclosed copy of this letter in the place provided and returning it to me.
Sincerely,
Xxxxxx A.S.L., Ltd.
By: /s/ Xxxx X. Idol
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Xxxx X. Idol
Agreed:
/s/ Xxx X. Xxxxx
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Xxx X. Xxxxx
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