THIRTEENTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS THIRTEENTH AMENDMENT TO EMPLOYMENT AGREEMENT is made effective the 6th day
of January, 2004, by and between XXXXXXX IT SOLUTIONS, INC., a Delaware
corporation ("Company") and XXXXX X. XXXXXXX, XX (the "Executive").
WHEREAS, on the 12th day of March, 1992, Company and Executive executed an
Employment Agreement ("Agreement") that became effective on the date of the
closing of the initial public offering of the Company (April 10, 1992);
WHEREAS, Company and Executive entered into an Amendment to Employment Agreement
effective July 6, 1993;
WHEREAS, Company and Executive entered into a Second Amendment to Employment
Agreement effective October 14, 1993;
WHEREAS, Company and Executive entered into a Third Amendment to Employment
Agreement effective January 6, 1995;
WHEREAS, Company and Executive entered into a Fourth Amendment to Employment
Agreement effective for the fiscal year ending January 5, 1996;
WHEREAS, Company and Executive entered into a Fifth Amendment to Employment
Agreement effective January 6, 1996;
WHEREAS, Company and Executive entered into a Sixth Amendment to Employment
Agreement effective January 6, 1997;
WHEREAS, Company and Executive entered into a Seventh Amendment to Employment
Agreement effective January 6, 1998;
WHEREAS, Company and Executive entered into an Eighth Amendment to Employment
Agreement effective January 6, 1999;
WHEREAS, Company and Executive entered into a Ninth Amendment to Employment
Agreement effective January 6, 2000;
WHEREAS, Company and Executive entered into a Tenth Amendment to Employment
Agreement effective January 6, 2001;
WHEREAS, Company and Executive entered into an Eleventh Amendment to Employment
Agreement effective January 6, 2002;
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WHEREAS, Company and Executive entered into a Twelfth Amendment to Employment
Agreement effective January 6, 2003; and
WHEREAS, Company and Executive desire to amend the Agreement, as amended, to
reflect certain changes agreed upon by Company and Executive regarding
compensation payable to Executive for the 2004 fiscal year and thereafter.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Section 5(a)(iii) shall be amended as follows:
(iii) During the Companys 2004 fiscal year, Executive shall be
paid at the annual rate of Four Hundred Seventy-Five
Thousand Dollars ($475,000.00). This rate shall continue for
each subsequent year of the Agreement unless modified by the
compensation committee as provided in Section 5(a)(iv).
2. Section 5(b)(i) is amended commencing with the 2004 fiscal year as follows:
(i) Executive shall be entitled to a deferred bonus for the 2004 fiscal
year in the event Employee satisfies the applicable criteria set forth
below of the Gross Sales and Net Profit Before Taxes Margin ("NPBT
Margin") (as hereinafter defined) of the Company for 2004, as follows:
(i) Gross Sales greater than $645,000,000.00 but less than or
equal to $700,000,000.00 with a NPBT Margin of greater than
2.7% = $300,000.00 deferred bonus;
(ii) Gross Sales greater than $700,000,000.00 with a NPBT Margin
greater than 2.5% but less than or equal to 3% = $500,000.00
deferred bonus; or
(iii) Gross Sales greater than $700,000,000.00 with a NPBT Margin
greater than 3% = $600,000.00 deferred bonus.
Within thirty (30) days of the conclusion of the 2004 fiscal year of the Company
and each fiscal year thereafter, Executive and Company shall agree upon the
economic criteria to be utilized for determining any bonus to be awarded to
Executive for such year. Such bonus for each
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subsequent year of this Agreement shall be consistent with Executive's prior
plan.
For purposes of this Section, the term "Gross Sales" shall mean the gross sales
of equipment and software and services by Company during the applicable period
on a consolidated basis. In making said Gross Sales determination, all gains and
losses realized on the sale or other disposition of Company assets not in the
ordinary course shall be excluded; all refunds, returns or rebates which are
made during such period shall be detracted along with all accounts receivable
derived from such sales that are written off during such period in accordance
with Company's accounting system.
For purposes of this Agreement, the "NPBT Margin" shall be the Net Profit Before
Taxes of Company on a consolidated basis divided by its Gross Sales. For
purposes of this Agreement, the NPBT Margin shall be computed without regard to
the bonus payable to the Executive pursuant to this Section, or any bonus
payable to Xxxxxxx X. Xxxxxxx under the terms of his Employment Agreement, 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. Said NPBT Margin 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 in accordance
with generally accepted accounting principles. The payment of any bonus
hereunder shall be made on the fifth (5th) annual anniversary of the
determination set forth above for the year 2004. In the event of the death of
the Executive prior to such date, any amount owed hereunder shall be paid to his
designated beneficiary, and, if none, then to his estate.
In the event that Company would acquire during its 2004 fiscal year a company
that had gross sales in excess of $100,000,000.00 for its most recently
concluded fiscal year, Company and Executive shall in good faith determine
whether any adjustments to the Gross Sales and NPBT Margin set forth above,
whether upward or downward, shall be made in order to reflect the effect of such
acquisition upon the operations of the Company.
3. Section 19 shall be amended by adding at the end of said section, the
following language:
Executive shall be awarded, effective February 18, 2004, the option to acquire
one hundred thousand (100,000) shares of the common stock of Company at the fair
market value of such shares on February 18, 2004.
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Such option shall be awarded to Executive by Company pursuant to the terms
of the Award Agreement, which is attached hereto and incorporated herein 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.
IN WITNESS WHEREOF, this Thirteenth Amendment to Employment Agreement has been
executed as of the day and year first above written.
WITNESSES: XXXXXXX IT SOLUTIONS, INC.
_______________________
_______________________ By: ________________________________
_______________________
_______________________ ______________________________________
XXXXX X. XXXXXXX, XX, Executive
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