INCENTIVE DEFERRED COMPENSATION AGREEMENT
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This Incentive Deferred Compensation Agreement is made effective this ____ day
of _________, 1999, by and between XXXXXXX COMPUTER RESOURCES, INC., a Delaware
corporation (the "Company") and XXXXX XXXXXX ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement, the Company and
Xxxxxx have entered into an Employment Agreement for the employment of Xxxxxx by
Company;
WHEREAS, pursuant to Section 5(c) of said Employment Agreement, Xxxxxx may be
entitled to incentive deferred compensation in the event certain economic
criteria are satisfied;
WHEREAS, the parties wish to define the terms governing the incentive deferred
compensation in the event the economic criteria and the terms and conditions of
the Employment Agreement are satisfied.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein set forth, the parties hereby covenant and agree as follows:
1. In the event Xxxxxx satisfies the economic criteria set forth in the
Employment Agreement for such year and is entitled to incentive deferred
compensation, the incentive deferred compensation shall be governed by the
terms of this Agreement.
2. In the event Xxxxxx should die or become disabled during the term of the
Employment Agreement, or if the Employment Agreement is not renewed by
Company at the expiration of the initial term or any renewal term, all
incentive deferred compensation earned shall be vested in full and shall be
payable to Xxxxxx and/or his designated beneficiary at that time. For
purposes of this Paragraph, the term "disabled" shall have the meaning set
forth in said Employment Agreement.
3. In the event Xxxxxx discontinues employment with the Company during the
initial term or any renewal term of this Employment Agreement or if Xxxxxx
does not renew the Employment Agreement at the expiration of the initial
term or any renewal term and such discontinuation of employment is not a
result of Xxxxxx becoming disabled, the vested portion of his deferred
compensation account will be paid to him at said time and all non-vested
amounts will be forfeited. Provided, however, if Xxxxxx would violate the
terms of his covenant not to compete and confidentiality agreement as set
forth in Sections 8 and 9 of his Employment Agreement, the vested portion
of his deferred compensation account will likewise be forfeited. The
incentive deferred compensation shall vest according to the following
schedule:
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Years of Service With Company or its Percentage of Vested
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Subsidiaries from the Effective Date Interest
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of This Agreement
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Less than 1 year 0%
One year 20%
Two years 40%
Three years 60%
Four years 80%
Five years 100%
This vesting schedule shall apply separately to each year that incentive
deferred compensation is earned by Xxxxxx upon the satisfaction of the economic
criteria set forth in the Employment Agreement.
By way of illustration, if Xxxxxx satisfied the economic criteria for years 1
and 2 of the Agreement, at the end of year 2, Xxxxxx would be 40% vested as to
the incentive deferred compensation credited in year 1 and 20% vested as to the
incentive deferred compensation credited in year 2.
4. No deferred compensation shall be paid under the terms of this Agreement in
the event Xxxxxx is discharged from the service of the Company for cause.
For purposes of this Paragraph, the term "cause" shall have the meaning set
forth in Section 10(a)(iii) of said Employment Agreement
5. Xxxxxx shall not have the right to commute, sell, transfer, assign or
otherwise convey the right to receive any payments under the terms of this
Agreement. Any such attempted assignment or transfer shall terminate this
Agreement and the Company shall have no further liability hereunder.
6. It is the intention of the parties that the incentive deferred compensation
to be payable to Xxxxxx hereunder (if applicable) shall be includable for
Federal Income Tax purposes in his, or such beneficiary's gross income only
in the taxable year in which he or the beneficiary actually receives the
payment and Company shall be entitled to deduct such incentive deferred
compensation as a business expense in its Federal Income Tax return in the
taxable year in which such payment is made to Xxxxxx or his beneficiary.
7. Nothing contained in this Agreement shall in any way affect or interfere
with the right of Xxxxxx to share or participate in a retirement plan of
the Company or any profit sharing, bonus or similar plan in which he may be
entitled to share or participate as an employee of the Company.
8. This Agreement shall be binding upon the heirs, administrators, executors,
successors and assigns of Xxxxxx and the successors and assigns of Company.
This Agreement shall not be modified or amended except in writing signed by
both parties.
9. This Agreement shall be subject to and construed under the laws of the
Commonwealth of Kentucky.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the day and year first above written.
XXXXXXX COMPUTER RESOURCES, INC.
By:___________________________________________
Xxxxxxx X. Xxxxxxx, Chief Financial Officer
______________________________________________
XXXXX XXXXXX
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