Exhibit 10.4
INCENTIVE DEFERRED COMPENSATION AGREEMENT
This Incentive Deferred Compensation Agreement is made effective as of
the 13th day of November, 1996, by and between XXXXXXX COMPUTER
RESOURCES, INC., a Delaware corporation (the "Company") and XXXXXXX
XXXXXXX ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement, the
Company and Xxxxxxx have entered into an Employment Agreement for the
employment of Xxxxxxx by Company;
WHEREAS, pursuant to Section 5(b) of said Employment Agreement, Xxxxxxx
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 Xxxxxxx 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 Xxxxxxx should die or become disabled during the term
of the Employment Agreement, all incentive deferred compensation earned
shall be vested in full and shall be payable to Xxxxxxx 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 Xxxxxxx discontinues employment with the Company
during the initial term of the Employment Agreement and such
discontinuation of employment is not a result of Xxxxxxx 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 Xxxxxxx 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:
YEARS OF SERVICE WITH COMPANY OR ITS PERCENTAGE OF VESTED
SUBSIDIARIES FROM THE EFFECTIVE DATE INTEREST
OF THIS AGREEMENT
Less than 1 year 0%
One year 33.33%
Two years 66.66%
Three years 100%
This vesting schedule shall apply separately to each year that
incentive deferred compensation is earned by Xxxxxxx upon the
satisfaction of the economic criteria set forth in the Employment
Agreement. Provided, however, Xxxxxxx shall be vested fully in all
amounts hereunder on November 13, 2001.
By way of illustration, if Xxxxxxx satisfied the economic criteria for
years 1 and 2 of the Agreement, at the end of year 2, Xxxxxxx would be
66.66% vested as to the incentive deferred compensation credited in
year 1 and 33.33% vested as to the incentive deferred compensation
credited in year 2.
4. In the event Xxxxxxx would terminate his Employment Agreement
within ninety (90) days following a change in control as defined in
Exhibit B to the Employment Agreement, all incentive deferred
compensation earned shall be vested in full and shall be payable to
Xxxxxxx at that time.
5. No deferred compensation shall be paid under the terms of this
Agreement in the event Xxxxxxx 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)(iv) of
said Employment Agreement.
6. Xxxxxxx 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.
7. It is the intention of the parties that the incentive deferred compensation
to be payable to Xxxxxxx 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 Xxxxxxx or his beneficiary.
8. Nothing contained in this Agreement shall in any way affect or interfere
with the right of Xxxxxxx 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.
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9. This Agreement shall be binding upon the heirs, administrators, executors,
successors and assigns of Xxxxxxx. This Agreement shall not be modified or
amended except in writing signed by both parties.
10. This Agreement shall be subject to and construed under the laws of the
State of Kentucky.
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: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx, Chief Financial Officer
/s/ Xxxxxxx Xxxxxxx
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XXXXXXX XXXXXXX
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