TECHNOLOGY INTEGRATION FINANCIAL SERVICES, INC.
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement ("First Amendment") is made as
of the 6th day of July, 2001, by and between TECHNOLOGY INTEGRATION FINANCIAL
SERVICES, INC., a Kentucky corporation ("Company"), and XXX XXXXX ("Employee").
WHEREAS, on the 6th day of July, 1997, the Company's parent company,
Xxxxxxx Computer Resources, Inc. ("Parent Company"), and Employee executed an
Employment Agreement ("Agreement") wherein Employee agreed to serve as President
of the Parent Company's wholly owned subsidiary, Xxxxxxx Computer Leasing
Company, Inc.;
WHEREAS, thereafter, Xxxxxxx Computer Leasing Company, Inc., was merged
into the Company, with Employee continuing to serve as the President of the
Company, a subsidiary of the Parent Company;
WHEREAS, on or about March 17, 2000, the parties amended certain of the
terms of the Agreement with a Pay Plan that became effective on March 1, 2000,
and shall remain in full force and effect through the July 5, 2001, the end of
the initial term of the Agreement; and
WHEREAS, Company and Employee desire to enter into this First Amendment to
Employment Agreement to provide Employee with continued employment with the
Company and additional responsibilities, duties, benefits and compensation
incident thereto.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. Section 2 of the Agreement shall be amended as follows:
Term. The term of Employee's employment pursuant to this First Amendment
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shall begin on the 6th day of July, 2001, and shall continue for a period
of three (3) years, to July 5, 2004, unless terminated earlier pursuant to
the provisions of Section 11 of the Agreement, provided that Sections 9,
10, 11(b), 11(c), if applicable, 12, if applicable, and 13, if applicable,
of the Agreement shall survive the termination of such employment and shall
expire in accordance with the terms set forth therein.
2. The first sentence of Section 4 shall be amended as follows:
Duties. Employee shall serve as President of the Company and shall report
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directly to the Chief Executive Officer of the Company.
3. Section 5 shall be amended by replacing Sections 5(a) through 5(i) of the
Agreement with the following:
Compensation. For all services rendered by the Employee under this First
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Amendment, compensation shall be paid to Employee as follows:
(a) Base Salary. Employee's base annual salary shall be $350,000
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during the term of this First Amendment.
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(b) Year End Deferred Compensation Bonus Based on Parent Company's
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Performance. Employee shall be eligible to receive a year end deferred
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compensation bonus in accordance with the following schedule so long as (1)
Parent Company achieves a net profit before taxes ("NPBT") greater than 5.4% for
fiscal year 2001 and (2) Parent Company's gross sales are in excess of the
following thresholds: If Parent Company generates gross sales in excess of
$1,150,000,000.00 for fiscal year 2001, Employee shall be entitled to receive
$25,000 in cash or stock and 3,000 stock options; if Parent Company generates
gross sales in excess of $1,200,000,000.00 for fiscal year 2001, Employee shall
be entitled to receive $50,000.00 in cash or stock and 5,000 stock options; or
if Parent Company generates gross sales in excess of $1,250,000,000.00 for
fiscal year 2001, Employee shall be entitled to receive $100,000.00 in cash or
stock and 10,000 stock options. Employee understands and acknowledges that 100%
of any cash bonus deemed earned by Employee hereunder shall be deferred and
subject to a five (5) year vesting schedule. Employee further understands and
acknowledges that any stock options awarded hereunder shall be subject to a
three (3) year vesting schedule. Any such stock option awards made pursuant to
this Section shall be made subject to any and all terms and conditions contained
in the Parent Company's applicable Non-Qualified and Incentive Stock Option Plan
and the Award Agreement incident thereto. Any such award shall grant Employee
the option to acquire a certain amount of common stock of the Parent Company at
the fair market value of such common stock as of the applicable date. For the
purposes of this Agreement, the fair market value as of the applicable date
shall mean with respect to the common shares, the average between the high and
low bid and ask prices for such shares on the over-the-counter market on the
last business day prior to the date on which the value is to be determined (or
the next preceding date on which sales occurred if there were no sales on such
date). The year end deferred compensation schedule provided in this Section
shall be in effect for fiscal year 2001 only. For each subsequent year of this
Agreement, the parties shall, in good faith, negotiate and agree upon year end
criteria for such deferred compensation.
(c) Year End Bonus Based on Company's Performance. Employee shall be
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eligible to receive a year end bonus if Company's net profit before taxes
("NPBT") meet or exceed certain thresholds, which are more particularly set
forth herein below. If Company's NPBT for fiscal year 2001 is equal to or
greater than $2,000,000.00, Employee shall be entitled to receive a cash bonus
of $75,000.00; if Company's NPBT fiscal year 2001 is equal to or greater than
$2,500,000.00, Employee shall be entitled to receive a cash bonus of
$150,000.00; or, if Company's NPBT is equal to or greater than $3,000,000.00,
Employee shall be entitled to receive a cash bonus of $250,000.00. This year end
bonus, which is based on Company's performance, shall be in effect for fiscal
year 2001. For each subsequent year during the term of this First Amendment,
the parties shall, in good faith, negotiate and agree upon criteria for such
year end Company bonus.
(d) For purposes of this Section, the term "Gross Sales" shall mean
the gross sales of equipment, software and services by Company during the
applicable period, determined on a consolidated basis. In making said gross
sales determination, all gains and losses realized on the sale or other
disposition of Company's assets not in the ordinary course of business shall be
excluded. All refunds or returns which are made during such period shall be
subtracted along with all accounts receivable derived from such sales that are
written off during such period in accordance with Company's accounting system.
Such Gross Sales and net pre-tax margin of the Company in accordance with
generally accepted accounting principles and such determination shall be final,
binding and conclusive upon all parties hereto.
(e) Company will deliver to Employee copies of the reports of any
determination made hereunder by Company for the subject period, along with any
documentation reasonably requested by Employee. Within thirty (30) days
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following delivery to Employee of such report, Employee shall have the right to
object in writing to the results contained in such determination. If timely
objection is not made by Employee to such determination, such determination
shall become final and binding for purposes of this Agreement. If a timely
objection is made by Employee, and the Company and Employee are able to resolve
their differences in writing within fifteen (15) days following the expiration
of the initial thirty (30) day period, then such determination shall become
final and binding as it pertains to this Agreement. If timely objection is made
by Employee to Company, and Employee and Company are unable to resolve their
differences in writing within fifteen (15) days following the expiration of the
initial 30 day period, then all disputed matters pertaining to the report shall
be submitted and reviewed by the Arbitrator ("Arbitrator"), which shall be an
independent accounting firm selected by Company and Employee. If Employee and
Company are unable to promptly agree on the accounting firm to serve as the
Arbitrator, each shall select, by not later than fifteen (15) days following the
expiration of the initial 30 day period, one accounting firm and the two
selected accounting firms shall then be instructed to select promptly a third
accounting firm, such third accounting firm to serve as the Arbitrator. The
Arbitrator shall consider only the disputed matters pertaining to the
determination and shall act promptly to resolve all disputed matters. A
decision with respect to all disputed matters shall be final and binding upon
Company and Employee. The expenses of Arbitration shall be borne one-half by
Employee and one-half by Company. Each party shall be responsible for his/its
own attorney and accounting fees.
(f) Employee hereby acknowledges that Company reserves the right to
modify, alter, or amend such pay plan, at any time, in the event there are
changes in the Company's business model due to events which include, but are not
necessarily limited to mergers, acquisitions, corporate
re-organization/re-structure, material changes to industry standards or
practices which affect the Company. Such modifications, alterations or
amendments to the compensation plan provided in this Section 5 shall not
constitute a breach of the Agreement or this First Amendment or otherwise
qualify as a default event hereunder.
4. Section 6 of the Agreement shall be amended as follows:
(d) Automobile Allowance - Company shall provide Employee with
an automobile allowance of $750.00 per month during the term
of this First Amendment. Employee shall be responsible for
all insurance, maintenance and repair expenses associated
with such vehicle.
(f) Cellular Phone Allowance - Company shall provide Employee
with a cellular phone allowance of $75.00 per month during
the term of this First Amendment.
(g) Life Insurance - During the term of this Agreement, Company
shall maintain on the life of Employee, provided he is
insurable at standard rates a term life insurance policy in
the amount of $1,000,000.00. Employee shall have the right
to designate the beneficiary of such policy. Employee agrees
to take any and all physicals that are necessary incident to
the issuance and/or renewal of said policy. In the event
that Employee is not insurable at standard rates during the
term of this Agreement, but Employee is able to procure
rated coverage, Employee shall have the right to procure
coverage for a lower amount of insurance, the cost of which
is equivalent to the standard term rate cost of
$1,000,000.00 of coverage. In the event Employee is not
insurable, then Company shall pay Employee an amount equal
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to the projected cost of the contemplated term insurance of
$1,000,000.00 at standard rates.
5. The Agreement is hereby amended in all applicable provisions so that the
word "Company" shall mean Technology Integration Financial Services, Inc., to
the extent necessary to properly reflect the terms of this First Amendment.
Except as modified by this First Amendment to Employment Agreement, the
parties affirm and ratify the terms and conditions of the Agreement.
IN WITNESS WHEREOF, this First Amendment to Employment Agreement has been
executed as of the day and year first above written.
Witnesses:
___________________________________ TECHNOLOGY INTEGRATION FINANCIAL
SERVICES, INC.
___________________________________ By:________________________________
___________________________________ ___________________________________
Xxx Xxxxx
___________________________________
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