AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment (the "Amendment") is entered into as of the 1st day of May,
1999, by XXX XXXX CORPORATION, a Delaware corporation (the "Company"), and Xxxx
X. Xxxxxxxx.
WHEREAS, the Company and the Employee have entered into that certain
Employment Agreement (the "Agreement"), dated April 11, 1997; and
WHEREAS, the Company and the Employee desire to amend the Agreement in
certain respects;
NOW THEREFORE, the Agreement is hereby amended as follows:
7. Section 9(e)(4) of the Agreement is hereby amended to read as follows:
9(e)(4) Two additional elements of Good Reason shall be added as
follows:
(A) Employee is assigned to, or Company's office at which
Employee is principally employed on the Relevant Date is relocated to,
a location which would require a round-trip commute to work from
Employee's principal residence on the Relevant Date of more than 100
miles per day.
(B) Failure of Company to obtain an agreement satisfactory to
Employee from any successor to the business, or substantially all the
assets, of Company to assume this Agreement or issue a substantially
similar agreement.
8. Section 9(g)(1) of the Agreement is hereby amended to read as follows:
9(g)(1) Within five days following Employee's termination, a lump sum
severance payment will be made to Employee. The lump sum severance
payment shall be in an amount equal to: (i) 2.5 times Employee's
yearly Base Salary as set forth in Section 3 or as it may be increased
from time to time; plus (ii) 2.5 times the greatest of (a) the average
annual incentive compensation paid to Employee pursuant to the MIP (or
any predecessor or successor plan) with respect to the five fiscal
years preceding the fiscal year in which the Change in Control occurs,
or (b) an amount equal to 100% of the incentive compensation paid to
Employee pursuant to the MIP (or any predecessor or successor plan)
during the 12 month period prior to the Termination Date, or (c) an
amount equal to the Employee's Base Salary as set forth in Section 3
or as such Base Salary may be increased from time to time, multiplied
by such Employee's current target bonus percentage under the MIP then
in effect; minus (iii) the total amounts due to Employee, if any,
pursuant to Sections B(b)(1) and (2).
9. Section 10 of the Agreement is hereby amended to read as follows:
10. EXERCISE AND INCOME TAX GROSS-UP
The Internal Revenue Code of 1986 (the "Code") imposes
significant tax burdens on the Employee and Company if the total
amounts received by the Employee due to a Change in Control exceed
prescribed limits. These tax burdens include a requirement that the
Employee pay a 20% excise tax on certain amounts received in excess of
the prescribed limits and a loss of deduction for Company. If, as a
result of these Code provisions, the Employee is required to pay such
excise tax, then upon written notice from the Employee to Company,
Company shall pay the Employee an amount equal to the total excise tax
imposed on the Employee (including the excise tax reimbursements due
pursuant to this sentence and the excise taxes on any federal and
state tax reimbursements due pursuant to the next sentence). If
Company is obligated to pay the Employee pursuant to the preceding
sentence, Company also shall pay the Employee an amount equal to the
"total presumed federal and state taxes" that could be imposed on the
Employee with respect to the excise tax reimbursements due to the
Employee pursuant to the preceding sentence and the federal and state
tax reimbursements due to the Employee pursuant to this sentence. For
purposes of the preceding sentence, the "total presumed federal and
state taxes" that could be imposed on the Employee shall be
conclusively calculated using a combined tax rate equal to the sum of
(a) the highest individual income tax rate in effect under (1) Federal
tax law and (ii) the tax laws of the state in which the Employee
resides on the date that the payment under this Section 10 is computed
and (b) the hospital insurance portion of FICA. No adjustments will be
made in this combined rate for the deduction of state taxes on the
federal return. the loss of itemized deductions or exemptions, or for
any other purpose. The Employee shall be responsible for paying the
actual taxes. The amounts payable to the Employee pursuant to this or
any other agreement or arrangement with Company shall not be limited
in any way by the amount that may be paid pursuant to the Code without
the imposition of an excise tax or the loss of Company deductions.
Either the Employee or Company may elect to challenge any excise taxes
imposed by the Internal Revenue Service and the Employee and Company
agree to cooperate with each other in prosecuting such challenges. If
the Employee elects to litigate or otherwise challenge the imposition
of such excise tax, however, Company will join the Employee in such
litigation or challenge only if Company's General Counsel determines
in good faith that the Employee's position has substantial merit and
that the issues should be litigated from the standpoint of Company's
best interest.
10. Section 12(e) of the Agreement is hereby amended to read as follows:
12(e) Expenses
The costs and expenses of any mediator shall be borne by Company.
Should the Employee or Company, at any time, initiate arbitration for
breach of this Agreement, Company shall reimburse the Employee for all
amounts spent by the Employee to pursue such arbitration, unless the
arbitrator finds the Employee's action to have been frivolous and
without merit.
11. Section 18 of the Agreement is hereby amended to read as follows:
GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware.
12. Except as amended herein, the provisions of the Agreement, shall
continue in full force and effect.
XXX XXXX CORPORATION
By: Xxxxxxxxx X. Xxxxx
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Its: Senior Vice President
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Company
Xxxx X. Xxxxxxxx
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Employee
