XXXXXXX COMPUTER RESOURCES, INC.
FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT is made as of the 6th day of
January, 2003, by and between Xxxxxxx Computer Resources, Inc., a Delaware
corporation (Company), and Xxxxxxx X. Xxxxxxx (Employee).
WHEREAS, on the 6th day of January, 1999, the Company's wholly owned
subsidiary, Xxxxxxx Select Integration Solutions, Inc., and Employee executed an
Employment Agreement (Agreement);
WHEREAS, effective September 1, 1999, Xxxxxxx Select Integration Solutions,
Inc. and Employee executed a First Amendment to Employment Agreement;
WHEREAS, Company and Employee entered into a Second Amendment to Employment
Agreement effective January 6, 2001;
WHEREAS, Company and Employee entered into a Third Amendment to Employment
Agreement effective January 6, 2002; and
WHEREAS, Company and Employee desire to amend the Agreement, as amended, to
reflect certain changes agreed upon by Company and Employee regarding
compensation payable to Employee for the 2003 fiscal year and thereafter.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. Section 5(a) shall be amended as follows:
Base Salary. During the Company's 2003 fiscal year, Employee shall be
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paid at the annual rate of Four Hundred Fifty Thousand Dollars
($450,000.00) per year. During the Company's 2004 fiscal year, Employee
shall be paid at the annual rate of Four Hundred Ninety-Five Thousand
Dollars ($495,000.00) per year. During the Company's 2005 fiscal year,
Employee shall be paid at the annual rate of Five Hundred Forty-Four
Thousand Five Hundred Dollars ($544,500.00). The 2005 fiscal year rate
shall continue for each subsequent year of the Agreement unless modified by
the Compensation Committee of the Company.
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2. Sections 5(b) and 5(c) shall be deleted in their entirety, and in lieu
thereof, the following Sections 5(b) and 5(c) are amended, commencing with the
2003 fiscal year, as follows:
(b) Annual Bonus
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Employee shall be entitled to a bonus and non-qualified stock option
award for the 2003 fiscal year in the event Employee satisfies the
applicable criteria set forth below of the income from operations (as
defined) of the Company for 2003, as follows:
(i) Income from operations greater than $26,000,000.00 but less than
or equal to $27,500,000.00 = $150,000.00 cash bonus and 75,000
non-qualified stock options;
(ii) Income from operations greater than $27,500,000.00 but less than
or equal to $29,000,000.00 = $250,000.00 cash bonus and 100,000
non-qualified stock options;
(iii) Income from operations greater than $29,000,000.00 but less than
or equal to $30,500,000.00 = $350,000.00 cash bonus and 125,000
non-qualified stock options;
(iv) Income from operations greater than $30,500,000.00 = $500,000.00
cash bonus and 150,000 non-qualified stock options.
(c) Annual Bonus Determination
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Within thirty (30) days of the conclusion of the 2003 fiscal year of
the Company and each fiscal year thereafter, Employee and Company shall
agree upon the threshold of operating income to be utilized for determining
any bonus and non-qualified stock options to be awarded to Employee for
such year. Such bonus and non-qualified stock option awards for each
subsequent year of this Agreement shall be consistent with Employee's prior
plan.
Any award of stock options to acquire the common stock of the Company
shall be at the fair market value of such common stock as of the applicable
date. For purposes of this Agreement,
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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 asked
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).
For purposes of this Agreement, the term income from operations shall
be computed without respect to the bonus payable to the Employee pursuant
to Section 5(b), shall exclude any gains or losses realized by the Company
on the sale or other disposition of its assets (other than in the ordinary
course of business) and shall exclude any extraordinary one-time charges
made by Company during said fiscal year. Such income from operations of the
Company shall be determined on a consolidated basis by the independent
accountant regularly retained by the Company, subject to the foregoing
provisions of this subparagraph (i) in accordance with generally accepted
accounting principles. Said determination and payment of such bonus shall
be made within ninety (90) days following the end of the fiscal year of the
Company and the determination by the accountant shall be final, binding and
conclusive upon all parties hereto. In the event the audited financial
statements are not issued within such ninety-day period, the Company shall
make the payment due hereunder (if any) based on its best reasonable
estimate of any liability hereunder, which amount shall be reconciled by
both parties once the audited financial statements are issued. Company
shall have the ability to advance amounts to Employee based on the
projected amount of the bonus compensation to be paid hereunder. In the
event that such advance payments are in excess of the amount due hereunder,
any such excess shall be reimbursed to Company by Employee within ninety
(90) days following the end of the fiscal year. In the event such advance
payments are less than the amount of said bonus as determined hereunder,
any additional amount due Employee shall be paid within ninety (90) days
following the end of the fiscal year of the Company.
In the event that Company would acquire during its 2003 fiscal year a
company that had gross revenues in excess of $100,000,000 for its most
recently concluded fiscal year, Company and Employee shall in good faith
determine whether any adjustments to the income from operations criteria
set forth above, whether upward or downward, shall be made in order to
reflect the effect of such acquisition on the operations of the Company.
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3. Section 6(b) shall be amended by inserting the words "four (4) weeks"
in lieu of the words "two (2) weeks."
4. Section 6(e) is deleted in its entirety and in lieu thereof, the
following Section 6(e) shall be inserted:
e. During the term of this Agreement, Company shall provide an expense
allowance of One Thousand Two Hundred Dollars ($1,200.00) per month to
Employee to reimburse Employee for all reasonable gas expenses incurred by
him incident to the business use and operation of his automobile and to
reimburse Employee for the business use of his home and various cellular
phones, home phones, faxes, computers, etc. Employee shall provide Company,
upon request, with any documentation substantiating such expenditures
hereunder.
5. The Agreement shall be amended by adding at the end of Section 6(f),
the following 6(g):
6(g). Flight Time Business Usage. In the event of a Change of Control
as defined under the terms of this Agreement, Employee shall be provided
each year with one hundred fifty (150) hours of flight time for business
usage by private air carrier provided by Cincinnati Air or some other
executive jet service that may be designated by Employee. In the event
Employee does not use such designated hours of flight time for business
usage during any particular year after a Change in Control has occurred, no
carryover shall exist for any unused time.
6. Section 19 shall be amended by adding at the end of such Section, the
following language:
Employee shall be awarded, effective January 6, 2003, an option to
acquire fifty thousand (50,000) shares of the common stock of Company at
the fair market value of such shares on January 6, 2003. Such option shall
be awarded to Employee by Company pursuant to the terms of the Award
Agreement which is attached hereto and incorporated hereby by reference as
Exhibit A.
Except as modified above, the terms of the Employment Agreement, as
amended, are hereby affirmed and ratified by the parties.
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IN WITNESS WHEREOF, this Fourth Amendment to Employment Agreement has been
executed as of the day and year first above written.
__________________________________ XXXXXXX COMPUTER RESOURCES, INC.
__________________________________ By: __________________________________
__________________________________ __________________________________
Xxxxxxx X. Xxxxxxx
__________________________________
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