SIXTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SIXTH AMENDMENT TO EMPLOYMENT AGREEMENT is made effective the 6th day of
January, 1997, by and between XXXXXXX COMPUTER RESOURCES, 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); and
WHEREAS, Company and Executive entered into an Amendment to Employment Agreement
effective July 6, 1993; and
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; 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 1997 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 Company's 1997 fiscal year, Executive shall be paid at
the annual rate of Three Hundred Ninety Five Thousand ($395,000.00)
Dollars. 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 1997 fiscal year and for
each year thereafter as follows:
(i) Executive shall be entitled to a bonus for the 1997 fiscal year not
to exceed the applicable percentage set forth below of the income
from operations (as
Page 1 of 4 Pages
defined) of the Company for such year in excess of the applicable
target amount:
(A) 6% of income from operations of Company in excess of
$3,000,000 but less than or equal to $10,000,000 - $420,000.00
maximum; plus
(B) (1) In the event that income from operations of Company in
fiscal year 1997 increases by at least twenty-five
percent (25%) but less than thirty percent (30%) from
the income from operations of the Company for fiscal
year 1996, as determined by its audited financial
statements, Employee shall be entitled to a bonus of
$200,000.00; or
(2) In the event that income from operations of Company in
fiscal year 1997 increases by thirty percent (30%) or
more from the income from operations of the Company for
fiscal year 1996, as determined by its audited
financial statements, Employee shall be entitled to a
bonus of $300,000.00.
For each succeeding year of this Agreement, the operating income of
the Company for the fiscal year just concluded shall be used as the
threshold for determining any bonus due in any subsequent year of
this Agreement under Sections (5)(b)(i)(B).
In the event that Company would pay Executive any discretionary bonus
amount pursuant to the provisions of Section 5(b)(ii) and/or Section 5(c),
fifty percent (50%) of such amount would be payable to Executive as a bonus
and the remaining fifty percent (50%) of the applicable dollar amount will
constitute incentive deferred compensation which shall be payable to
Executive according to terms of the Incentive Compensation Agreement and
Trust Agreement.
3. Section 5(d) is deleted in its entirety and in lieu thereof, the following
Section 5(d) shall be inserted:
(d) During the term of this Agreement, Company shall provide an expense
allowance of $1,750.00 per month to Executive to reimburse Executive
for expenses incurred incident to the business use of his home and
second home phones, faxes, computers, etc. Executive shall provide
Company with verification of said expenditures at its request. In
addition, during the term of Executive's employment hereunder, the
Executive shall be entitled to receive prompt reimbursement of all
other reasonable and customary travel and entertainment expenses
incurred by the Executive in fulfilling the Executive's duties and
responsibilities hereunder, including all expenses of travel and
living expenses while away from home on business or at the request
of and in the service of Company and car telephone service
Page 2 of 4 Pages
expenses, provided that such expenses are incurred and accounted for
in accordance with the policies and procedures established by the
Company.
4. Section 5(f) is deleted in its entirety and in lieu thereof, the following
Section 5(f) shall be inserted:
(f) The Executive shall be entitled to paid vacation in each calendar
year during the term of this Agreement in all events in an amount of
not less than ten (10) weeks per calendar year.
5. Section 5(h) is deleted in its entirety and in lieu thereof, the following
Section 5(h) shall be inserted:
(h) Commencing in the year 1997 and during the term of this Agreement
thereafter, Company shall pay all premiums for a term life insurance
policy on the life of Executive, provided he is insurable at
standard rates, in the amount of $3,000,000.00. The Trustee of an
irrevocable trust established by the Executive shall be the owner of
said policy and shall have the right to designate the beneficiary
thereof. In addition, Company agrees to enter into a split dollar
agreement with Executive and the Trustee of his irrevocable trust
whereunder Company shall pay all premiums on a whole life policy on
the life of Executive in the amount of $1,000,000.00 less the
reportable economic benefit, provided he is insurable at standard
rates. Executive agrees to take any and all physicals that are
necessary incident to the issuance and/or renewal of said policies.
If the Executive is uninsurable and a policy for $3,000,000.00 of
term insurance cannot be obtained hereunder at standard rates,
Company shall pay the Executive an amount equal to the cost of the
standard insurance coverage contemplated hereunder or provide
Executive with a lesser amount of term insurance predicated on the
projected cost of the contemplated term insurance at standard rates
(if the Executive is insurable.)
6. Section 7(c)(ii)(D) is deleted in its entirety and in lieu thereof, the
following Section 7(c)(ii)(D) shall be inserted:
(D) For purposes of this Employment Agreement, a "Change in Control"
shall occur upon any of the following: (a) if any individual or
group (as such term is used in Rule 13d-5 promulgated under the
Securities Act of 1934, as amended) acquires 30% or more of the
combined voting power of the Company's outstanding securities of
persons other than the holders of the combined voting power of the
Company's outstanding shares on January 6, 1997; (b) if continuing
directors (defined as directors of the Company as of January 6, 1997
(including Xxxxxxx Xxxxxx if he is hereinafter nominated as a
director of Company) and any successor to any director who was
nominated by a majority of the directors in office at the time of
his nomination
Page 3 of 4 Pages
or selection and who is not associated in any way with an individual
or group who is a beneficial owner of more than ten percent of the
combined voting power of the Company's outstanding securities other
than Executive or his affiliates) cease to constitute at least a
majority of the board of directors; or (c) if the board of directors
approves the sale of all or substantially all of the Company's
assets, or any merger, consolidation or similar business combination
or reorganization of the Company.
7. Section 19 shall be amended by adding at the end of the Agreement the
following language:
19. Executive shall be awarded effective January 6, 1997 an option to
acquire Twenty-Five Thousand (25,000) shares of the common stock of
Company at the fair market value of such shares on January 3, 1997
(the first business day prior to January 5, 1997). Such shares
shall be awarded to Executive by Company pursuant to the terms of an
Award Agreement which is attached hereto and incorporated herein by
reference as Exhibit C.
8. The Agreement shall be amended by adding at the end of the Agreement the
following new Section 20:
20. Company shall provide Executive with piggy-back and demand
registration rights in the event of a Change in Control as defined
under the terms of this Agreement. A copy of such Registration
Rights Agreement is attached hereto and incorporated herein by
reference as Exhibit D.
Except as modified above, the terms of the Employment Agreement, as amended, are
hereby affirmed and ratified by the parties.
IN WITNESS WHEREOF, this Sixth Amendment to Employment Agreement has been
executed as of the day and year first above written.
WITNESSES: XXXXXXX COMPUTER RESOURCES, INC.
/s/ Xxxxxxxxx X. Xxxxxxxx
-------------------------
/s/ Xxxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
------------------------- ----------------------------------
Xxxxx X. Xxxxxxxxx, Vice President
/s/ Xxxxxxx Xxxxx of Finance
-------------------------
/s/ Xxxxxxxx Xxxxxxx /s/ Xxxxx X. Xxxxxxx
------------------------- -------------------------------------
XXXXX X. XXXXXXX, XX, Executive
Page 4 of 4 Pages
