Exhibit 10.1
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
TMP Worldwide Inc. ("TMPW") and Xxxxx X. Xxxxxx ("Xxxxxx") are
parties to an Employment Agreement, dated November 18, 1996, which employment
agreement was previously amended pursuant to Amendment No. 1 to Employment
Agreement, effective as of September 14, 1998 (the employment agreement, as
heretofore amended, is referred to herein as the "Employment Agreement"), and by
virtue of this Amendment No. 2 to Employment Agreement (the "Amendment
Agreement"), are modifying certain terms of the Employment Agreement, which
amendments are effective as of October 1, 1999.
The parties hereby agree as follows:
1. The first sentence of Section 3 of the Agreement
is hereby amended to read in its entirety as follows:
"TMPW shall pay Xxxxxx, as compensation for services
performed, an annual salary at the rate of $475,000 and, in addition, commencing
in calendar year 1999, Xxxxxx shall be entitled to a bonus of a dollar amount
equal to a percentage of Xxxxxx'x annual salary as follows:
Calendar Year Bonus
------------- -----
1999 25.00%
2000 32.50%
2001 40.00%
2002 45.00%
2003 50.00%
The bonus will be payable if and only if Xxxxxx and/or the Company
attain such goals during the calendar year in question as determined by mutual
agreement of Xxxxxx and the Chief Executive Officer. Any such bonus shall be
payable in a single lump sum not more than ninety (90) days after the end of the
calendar year with respect to which the bonus is awarded. With respect to
calendar year 2000 and calendar years thereafter during the term of employment
hereunder, the Chief Executive Officer and Xxxxxx shall endeavor to discuss and
determine in good faith the goals on the basis of which the bonus would be
payable prior to the commencement of the year to which they relate (or as soon
as practicable after the commencement of such year). The bonus, if any, shall be
prorated for period of less than a full calendar year."
2. Section 9(b) is amended by deleting the following "; and (iii) his
minimum annual bonus for the twelve-month period following his death".
3. Section 9(c) is amended by deleting the following "his minimum
annual bonus for the twelve-month period following the effective date of
termination of his employment and (iv)".
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4. The last sentence of Section 9(c) is amended by changing the current
reference to "items (ii), (iii) and (iv)" to read "items (ii) and (iii)".
5. Section 9(d) is amended by deleting all references to (i) "and
minimum annual bonus" and (ii) "or minimum bonus".
6. New Sections 9(f), 9(g) and 9(h) are added immediately following
Section 9(e), which new Sections 9(f), 9(g) and 9(h) shall read as follows:
(f) In the event Xxxxxx'x employment is terminated by
TMPW for "other reasons", all outstanding options theretofore granted to Xxxxxx
to purchase shares of TMPW Common Stock shall automatically and immediately
become fully vested and exercisable for the balance of the ten year term
provided by the applicable stock option agreement, subject to all other terms of
any such agreement not inconsistent with this sentence.
(g) In the event that Xxxxxx'x employment is
terminated by him pursuant to a voluntary resignation within a period of twelve
months following a Change in Control (as defined below), he shall be entitled to
receive the consideration described in Section 9(c) of this agreement, payable
in the manner described in that Section 9(c).
(h) In the event Xxxxxx'x employment is terminated by
reason of his death, all options theretofore granted to Xxxxxx shall become
fully vested and exercisable for the shorter of (i) one year or (ii) the balance
of the ten year term provided by the applicable stock option agreement, subject
to all other terms of such agreement not inconsistent with this sentence.
7. The following language is added at the end of Section 10 of the
Employment Agreement immediately after the current last sentence thereof:
"In the event of any "Change in Control" (as defined in the Option
Agreement between Xxxxxx and TMPW dated August 5, 1999) all outstanding options
theretofore granted to Xxxxxx to purchase shares of TMPW Common Stock shall
automatically and immediately become fully vested and exercisable for the
balance of the ten year term provided by the applicable stock option agreement,
subject to all other terms of any such agreement not inconsistent with this
sentence, subject, however, to the provisions set forth below:
(c) Notwithstanding anything in this Section 10 or
Section 9(g) to the contrary, Xxxxxx shall in no event be entitled to
any payment or acceleration of options that would cause any portion of
the amount received by Xxxxxx to constitute an "excess parachute
payment" as defined under Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"). In furtherance of the provisions of this
Section, the following provisions shall apply:
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(1) Anything in this Agreement to the
contrary notwithstanding, in the event that any payment or
acceleration of options by TMPW to or for the benefit of
Xxxxxx (collectively, a "Payment") would be nondeductible by
TMPW for federal income tax purposes because of Section 280G
of the Code, then the aggregate present value of amounts
payable or distributable to or for the benefit of Xxxxxx
pursuant to this Agreement shall be reduced to the Reduced
Amount (as defined below). Any such reduction shall be
accomplished first by reducing the number of options to
acquire TMPW Common Stock which otherwise would have
immediately vested in full, as determined in the reasonable
discretion of the Board of Directors of TMPW (provided that
any options so reduced shall continue to vest in accordance
with the terms of such options irrespective of Xxxxxx'x
continued employment or, if earlier, the date or dates on
which such options can vest without being deemed
nondeductible, as determined in the reasonable discretion of
the Board of Directors of TMPW); and second, if necessary, by
reducing cash payments constituting part of the payments or
other consideration to which Xxxxxx has become entitled
(collectively, such cash payments, other consideration and the
aggregate present value of the immediate vesting of options
(calculated in accordance with Section 280G of the Code and
any regulations promulgated thereunder) are referred to as the
"Severance Amount").
(2) The "Reduced Amount" shall be the
amount, expressed in present value, which maximizes the
aggregate present value of the Severance Amount without
causing any Payment to be nondeductible by TMPW because of
Section 280G of the Code. For purposes of this clause (2),
present value shall be determined in accordance with Section
280(d)(4) of the Code.
(3) All determinations required to be made
under this Section 10 shall be made by TMPW's independent
public accountants (the "Accounting Firm") which shall provide
detailed supporting calculations to TMPW and Xxxxxx. Any such
determination by the Accounting Firm shall be binding upon
TMPW and Xxxxxx.
(4) It is possible that as a result of the
uncertainty in the application of Section 280G of the Code at
the time of the initial determination by the Accounting Firm,
a portion of the Severance Amount will have been made by TMPW
which should not have been made ("Overpayment") or that an
amount in addition to the Severance Payment which will not
have been made could have been made ("Underpayment"), in each
case, consistent with the calculations required to be made
hereunder.
(x) OVERPAYMENT. In the event that the
Accounting Firm, based upon the assertion of a
deficiency by the Internal Revenue Service against
Xxxxxx which the Accounting Firm believes has a high
probability
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of success, determines that an Overpayment has been
made, any such Overpayment paid or distributed by
TMPW to or for the benefit of Xxxxxx shall be treated
for all purposes as a loan ab initio (from the
beginning) to Xxxxxx which Xxxxxx shall repay to TMPW
together with interest at the applicable federal rate
provided for in Section 1274(d) of the Code.
(y) UNDERPAYMENT. If precedent or other
substantial authority indicates that an Underpayment
has occurred, any such Underpayment shall be promptly
paid by TMPW to or for the benefit of Xxxxxx together
with interest at the applicable federal rate provided
for in Section 1274(d) of the Code.
8. The Employment Agreement, as amended by this
Amendment Agreement, is hereby ratified and confirmed and remains in full force
and effect.
The parties hereto have executed this Amendment Agreement on
November 2, 1999.
TMP WORLDWIDE INC.
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------
By: Xxxxxx X. XxXxxxxx
Title:
/s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
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