AMENDMENT NO. 1
EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 to the Employment Agreement dated
December 1, 1993 (hereinafter "Employment Agreement"), by and between SPS
Technologies, Inc., a Pennsylvania corporation (the "Company") and Xxxxxxx X.
Xxxxx, residing at 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 (the "Employee").
WHEREAS, the Employee is currently employed by the Company as
the Company's Chairman of the Board and Chief Executive Officer; and
WHEREAS, the Company desires to continue to employ the
Employee as the Company's Chairman of the Board and the Employee desires to
continue to be so employed, on the terms and conditions set forth in the
Employment Agreement as amended herein;
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the Employment Agreement as follows:
1. Section 1 is deleted and shall be replaced in its entirety as
follows:
"Section 1. Employment. Effective January 1, 2002, the Company
hereby continues to employ the Employee, which employment the Employee
hereby accepts, to serve, subject to the direction of the Board of
Directors of the Company (the "Board"), as the Company's Chairman of
the Board ("Chairman") and Chief Executive Officer until the Company's
Annual Meeting on April 30, 2002, and as the Company's Chairman
thereafter. In such regard, the Employee agrees to work half-time to
undertake and discharge the following duties: member of the Company's
Board as Chairman, strategic planning and initiatives, mergers and
acquisitions, business development, monthly operations review with
Company management, selective quarterly reviews with the Company's
Group management, budget and long range planning advice, and such other
duties, functions and responsibilities as are from time to time
assigned to the Employee by the Company's Board, consistent with the
terms and provisions of this Employment Agreement."
2. Section 2(a) is deleted and shall be replaced in its entirety
as follows:
"Section 2. Term and Termination.
(a) Term. The Employee's employment by the Company
pursuant to this Amendment No. 1 shall be effective as of January 1,
2002 (the "Effective Date") and shall continue until December 31, 2002,
unless such employment is terminated by the Employee or the Company in
accordance with Section 2(b) as amended or Section 2(d) of the
Employment Agreement. The mutual written consent of Employee and
Company shall be required for the extension of the term of Employee's
employment by the Company beyond December 31, 2002."
3. Section 2(b) is deleted and shall be replaced in its entirety
as follows:
"(b) Termination by Employee or Company. The Company
may terminate the duties of the Employee, except as a member of the
Board of Directors, at any time by giving at least ninety (90) days
prior written notice of such termination to the Employee. Regardless of
such termination, the Employee shall continue to receive compensation
pursuant to this Amendment No. 1 and shall continue to be an employee
of the Company with all rights and benefits as provided under the
Employment Agreement until December 31, 2002. Notwithstanding the
foregoing, if the Company is prohibited by law or the terms of its
plans to continue benefits to the Employee after his termination of
employment, the Company shall, in the case of retirement benefits,
provide such benefits through the Supplemental Executive Retirement
Plan and the Benefit Equalization Plan or any other non-qualified
retirement plan and in the case of welfare benefits, provide such
benefits through individual insurance arrangements or self-insured
arrangements. If either the Company or Employee decides not to extend
the term of this Amendment No. 1 or further amend the Employment
Agreement, then the Employee shall retire from the Company effective
January 1, 2003."
4. Section 2(c) is deleted.
5. Section 3(a) is deleted and shall be replaced in its entirety
as follows:
"Section 3. Compensation.
(a) Base Salary. In consideration for all
services rendered by the Employee, hereunder or otherwise, to or for
the benefit of the Company, its subsidiaries and affiliates, the
Company shall pay the Employee a base salary at the rate per annum
equal to Three Hundred Thousand Dollars ($300,000), payable in equal
monthly installments."
6. Section 3(b) is deleted.
7. Section 3(c) is deleted and shall be replaced in its entirety
as follows:
"(c) Incentive Compensation. The Employee shall
continue to participate in all incentive compensation plans of the
Company that the Employee participated in for Fiscal Year 2001 at the
same percentages of base salary except that the base salary used to
determine such incentive compensation shall be as provided in Section
3(a) of this Amendment No. 1."
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8. Section 3(d) is deleted and shall be replaced in its entirety
as follows:
"(d) Benefit Plans. The Employee shall be eligible
during the term of his employment under this Employment Agreement to
participate in all Employee benefit plans and Employee fringe benefits
such as medical, dental and disability and retirement programs
(including the Company's Retirement Income Plan, Executive Deferred
Compensation Plan, Supplemental Executive Retirement Plan, and Benefit
Equalization Plan, but specifically excluding the Company's Senior
Executive Severance Plan ("SESP")) now or hereafter made available to
executive employees of the Company generally (collectively, such plans
and programs, but excluding the SESP, are herein collectively referred
to as the "Benefit Plans"), to the extent and on the same terms and
conditions (subject, however, to the terms and provisions of any such
plans or programs) as from time to time are accorded other employees
serving as executive officers of the Company, except as such Benefit
Plans may be expressly modified by the terms of the Employment
Agreement and this Amendment No. 1. For purposes of life insurance, the
Employee shall be reimbursed for the purchase of term life insurance in
the same amount and same manner as in Fiscal Year 2001. Additionally,
following expiration or termination of employment by the Company
pursuant to this Amendment No. 1, the Company shall continue to provide
medical coverage for Employee as long as Employee is Chairman of the
Company's Board of Directors. Such medical coverage shall be comparable
to medical coverage provided for executive employees of the Company and
shall be paid for by the Company. However, Employee's participation in
such medical coverage shall be subject to the terms of the applicable
medical plan documents and applicable policies of the Company. If for
any reason the Company cannot provide an entitled benefit as provided
herein, the Company shall reimburse the Employee, on an after tax
basis, the Employee's reasonable cost to secure such a benefit."
9. Section 3(e) is deleted.
10. Section 4 is deleted and shall be replaced in its entirety as
follows:
"Section 4. Office. The Company shall reimburse the Employee
the reasonable costs and expenses of maintaining an office at his
principal residence in Vermont. The Company shall also provide a
visiting office and reasonable secretarial services at the Company's
corporate offices in Jenkintown, Pennsylvania."
11. Section 5 is deleted and shall be replaced in its entirety as
follows:
"Section 5. Board Membership. The Employee shall continue as a
member of Company's Board. Subject to the provisions of Section 7, the
Employee may accept other board memberships or remunerative positions,
other than with the Company and its subsidiaries, whether or not for
compensation."
12. Section 6(a) is amended by adding the following sentence at
the end of the paragraph:
"In the event of a `Triggering Termination' of the
Employee during a `Change of Control Period' pursuant to this
Section, severance payable to the Employee pursuant to his
Executive Severance Agreement shall be determined by
disregarding Employee's base salary and incentive compensation
for Fiscal Year 2002 and using in lieu thereof Employee's base
salary and incentive compensation for Fiscal Year 2001."
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13. Section 6(c) is deleted.
14. Section 6(e)(ii) is deleted.
15. Section 10 is deleted.
The effective date of this Amendment No. 1 to the Employment Agreement shall be
January 1, 2002.
All other terms and conditions of the Employment Agreement shall remain
unchanged and in effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the 6th day
of December, 2001.
Attest: SPS TECHNOLOGIES, INC.
By:
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Secretary
EMPLOYEE:
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Witness Xxxxxxx X. Xxxxx
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