EXHIBIT 10.13
AMENDMENT NO. 4
TO EMPLOYMENT AGREEMENT
This Amendment No. 4 (the "AMENDMENT") to the Employment Agreement, dated
as of July 10, 2000, as amended by that certain Amendment No. 1 to the
Employment Agreement dated as of December 8, 2000 ("AMENDMENT NO. 1"), that
certain Amendment No. 2 to the Employment Agreement dated as of March 22, 2001
("AMENDMENT NO. 2") and that certain Amendment No. 3 to the Employment Agreement
dated as of July 10, 2001 ("AMENDMENT NO. 3") (as so amended, the "AGREEMENT"),
between Xxxx X. Xxxx, residing at 00 Xxxxxx Xxxx Xxx, Xxxxxx, Xxxxxxx 00000
("EXECUTIVE"), and Precision Partners, Inc., a Delaware corporation (the
"COMPANY"), is entered into as of September 30, 2001. Capitalized terms used but
not defined will have the respective meanings assigned to them in the Agreement.
RECITALS
A. Executive is currently the President and Chief Executive
Officer of the Company and Precision Partners Holding Company, a Delaware
corporation ("PPHC", and together with the Company collectively, "PRECISION"),
and a member of the Boards of Directors of Precision.
B. Each of Executive and Precision desires to amend the Agreement
as follows.
Accordingly, the parties hereby agree as follows:
Section 1. Amendments. The Agreement is hereby amended as set forth
below:
1.1 Section 1.4 of the Agreement is hereby amended by deleting in
its entirety the phrase "second anniversary hereof" in the first sentence
of such Section 1.4 and replacing it with the phrase "third anniversary
hereof".
1.2 Section 1.5(c)(i) of the Agreement is hereby amended and
restated in its entirety as follows:
(c) Equity Redemption. (i) Notwithstanding anything to the
contrary contained herein or in the LLC Agreement, subject to Executive
assisting the Precision Boards in completing a prompt and effective
management transition,
(A) if on or before September 30, 2002, Executive's
employment is terminated for any reason or for no reason as
set forth in Section 1.8, within 60 days after the Termination
Date, Executive will sell to LLC or its designee, and the
Company will cause LLC or its designee to purchase in cash
from Executive, (I) other than with respect to clause (II),
his equity interest in LLC at cost, and (II) with respect to
any equity interest in LLC issued to Executive upon the
exercise of options, such equity interest at the fair market
value thereof as of the Termination Date (as determined by the
management committee of LLC in its good faith discretion) and;
provided, however, that notwithstanding the foregoing, this
clause (A) will be of no further force or effect (x) if on or
after September 30, 2001 through and including September 30,
2002, but prior to delivery of a termination notice as set
forth in Section 1.8 or the Executive's Notice or the
Company's Notice, the Company consummates an acquisition which
has a total purchase price of at least $10 million, including
all earn-outs and contingent payments calculated as if all
conditions were met and such amounts were due and payable upon
closing (a "$10 MILLION ACQUISITION") or (y) if on or after
September 30, 2001 through and including September 30, 2002,
but prior to delivery of a termination notice as set forth in
Section 1.8 or a $10 million Acquisition, the Executive's
Notice (as defined below) or the Company's Notice (as defined
below) has been delivered and' the Company consummates a Mid
State Sale as set forth in Section 1.5(c)(ii);
(B) if on or after the earliest to occur of October 1,
2002, a $10 Million Acquisition and a Mid State Sale in which
the Executive's Notice or the Company's Notice has been
delivered, the Company terminates Executive's employment
without Cause or Executive terminates his employment with Good
Reason as set forth in Section 1.8(a)(i), within 60 days after
the Termination Date, Executive will sell to LLC or its
designee, and the Company will cause LLC or its designee to
purchase in cash from Executive, his equity interest in LLC at
the fair market value thereof as of the Termination Date (as
determined by the management committee of LLC in its good
faith discretion); or
(C) if the Company provides a Non-Renewal Notice to
Executive, within 60 days after the Termination Date, at
Executive's election, Executive will sell to LLC or its
designee, and the Company will cause LLC or its designee to
purchase in cash from Executive, his equity interest in LLC at
the lower of cost and the fair market thereof as of the
Termination Date (as determined by the management committee of
LLC in its good faith discretion);
provided, however, that in the case of Sections 1.5(c)(i)(A), (B) and (C),
if Executive breaches his obligation to assist the Precision Boards in
completing a prompt and effective management transition, LLC or its
designee will retain for a one-year period after such Termination Date the
right, but not the obligation, to purchase in cash from Executive, and
Executive will sell to LLC or its designee upon notice from LLC or its
designee, his equity interest in LLC at cost; provided, further, however,
subject to other applicable provisions of this Agreement, if LLC or its
designee has not purchased Executive's equity interest in LLC as may be
required within 60 days after the Termination Date or within five days
after a Mid State Sale in which the Executive's Notice or the Company's
Notice has been delivered, as applicable, simple interest shall accrue at
an annual rate of 8% on such payment commencing on the 61st day following
the Termination Date or the sixth day following the Mid State Sale, as
applicable, to the date such payment is made by LLC or its designee to
Executive.
1.3 Section 1.5(c)(ii) of the Agreement is hereby renumbered as
Section 1.5(c)(iii) and Section 1.5(c) is hereby amended by adding the
following as Section 1.5(c)(ii):
(ii) Notwithstanding anything to the contrary contained
herein, if on or after September 30, 2001 through and including
September 30, 2002, but prior to delivery of a termination notice as
set forth in Section 1.8 or a $10 million Acquisition, the
Executive's Notice or the Company's Notice has been delivered and
the Company consummates a sale of Mid State Machine Products to an
unaffiliated third party (the "MID STATE SALE"), Executive will sell
to LLC or its designee, and the Company will cause LLC or its
designee to purchase in cash from Executive, (A) other than with
respect to clause (B), his equity interest in LLC at cost, and (B)
with respect to, any equity interest in LLC issued to Executive upon
the exercise of options, such equity interest at the fair market
value thereof as of the consummation of the Mid State Sale (as
determined by the management committee of LLC in its good faith
discretion), within five days after consummation of the Mid State
Sale (with such obligation accruing upon the consummation of a Mid
State Sale).
1.4 Renumbered Section 1.5(c)(iii)(A) of the Agreement is hereby
amended by deleting in its entirety the phrase "Sections (c)(i)(B) and
(C)" in the first sentence of such Section 1.5(c)(iii)(A) and replacing it
with the phrase "Sections 1.5(c)(i) and (ii)".
1.5 Renumbered Section 1.5(c)(iii)(C) of the Agreement is hereby
amended and restated in its entirety as follows:
Notwithstanding the last proviso in Section 1.5(c)(i), if
Executive delivers a Dispute Notice to LLC pursuant to Section
1.5(c)(iii)(A), then the calculation of the 60-day period following
the Termination Date and the five-day period following the Mid State
Sale, as applicable, will be tolled.
1.6 The definition of "Appraiser" in Section 1.10 of the Agreement
is hereby amended by deleting in its entirety the phrase "Section
1.5(c)(ii)(B)" in such definition and replacing it with the phrase
"Section 1.5(c)(iii)(B)".
1.7 Section 1.10 of the Agreement is hereby amended by adding to
such Section 1.10 after the definition of "Company Board" the following
definition of "Company's Notice":
"COMPANY'S NOTICE" means the written request of the Company to
Executive to effect a sale and purchase of Executive's equity
interest in LLC as set forth in Section 1.5(c)(ii) that is delivered
no earlier than ten days and no later than five days prior to the
Mid State Sale.
1.8 The definition of "Dispute Notice" in Section 1.10 of the
Agreement is hereby amended by deleting in its entirety the phrase
"Section 1.5(c)(ii)(A)" in such definition and replacing it with the
phrase "Section 1.5(c)(iii)(A)".
1.9 Section 1.10 of the Agreement is hereby amended by adding to
such Section 1.10 after the definition of "Executive Committee" the
following definition of "Executive's Notice":
"EXECUTIVE'S NOTICE" means the written request of Executive to the
Company to effect a sale and purchase of Executive's equity interest
in LLC as set forth in Section 1.5(c)(ii) that is delivered no
earlier than ten days and no later than five days prior to the Mid
State Sale.
Section 2. Effectiveness. This Amendment will be deemed effective as of
September 30, 2001.
Section 3. Miscellaneous. This Amendment constitutes the entire agreement,
and supersedes all prior agreements and understandings (both written and oral),
between the parties hereto with respect to the subject matter hereof. Except as
expressly provided herein or in Amendment Xx. 0, Xxxxxxxxx Xx. 0 or Amendment
No. 3, the Agreement remains in full force and effect without modification or
alteration.
Section 4. Counterparts. This Amendment may be executed in separate
original or facsimile counterparts, each of which will be deemed to be an
original instrument and all of which taken together will constitute a single
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
PRECISION PARTNERS, INC.
By /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Executive Vice President and
Chief Financial Officer
EXECUTIVE
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
