AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
Exhibit
10.9
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
This Amendment No.1 to Employment
Agreement is entered into as of this 31st day of
December, 2008, by and between XXXXX-MIDLAND CORPORATION, a Delaware corporation
(the “Company”), and XXXXXX X. XXXXX (the “Executive”), and amends the
Employment Agreement, dated as of September 30, 2002, by and between the Company
and the Executive (the “Employment Agreement”).
WHEREAS, the parties hereto wish to
amend the Employment Agreement to, among other things, make such agreement
conform to the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).
NOW, THEREFORE, in consideration of the
mutual covenents and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. The third sentence of
Section 5(b)(i) of the Employment Agreement is amended in its entirety to read
as follows: “The Royalty shall be payable monthly as shall be consistent with
the Company’s payroll procedures from time to time”.
2. The annual performance
Bonus described in Section 5(c)(i) of the Employment Agreement shall be paid, at
the discretion of the Company, provided that the Executive is employed by the
Company on January 1st of the
year following the year for which the bonus is earned and shall be paid no later
than December 31st of the year following the year for which the bonus is
earned.
3. All reimbursements of
expenses to be paid by the Company to the Executive pursuant to Sections 5(d)
and 6 of the Employment Agreement which would be taxable to the Executive shall
be made as soon as practicable following submission of a reimbursement request,
but no later than the end of the year following the year during which the
expense was incurred.
4. The definition of
“Disability” in Section 8(b) of the Employment Agreement shall be amended to
have the meaning set forth in Section 409A of the Code and the regulations
thereunder.
5. With respect to the
second sentence of Section 9(d) of the Employment Agreement: (a) the words “to
the extent permitted by law” shall be added after “The Company shall” at the
beginning of the sentence, and (b) the following language appearing in
parenthetical is hereby deleted in its entirety: “(or, to the extent such
benefits cannot be provided, the Company shall make a cash payment to the
Executive in an amount sufficient (on an after tax basis) to allow the Executive
to obtain comparable benefits for such period).”
6. The period during which
the Executive shall be entitled to exercise options as set forth in the second
to last sentence in Section 9(d) and in the second to last sentence in Section
9(e) of the Employment Agreement shall be amended to be “the lesser of three
years following the Date of Termination or the original expiration date of such
options.”
7. The following shall be
added to the end of the first sentence of Section 9(f) of the Employment
Agreement (i.e. after the words “to avoid such tax”): “to the extent necessary
to comply with Section 409A of the Code; such reductions shall first apply
against the latest scheduled cash payments, then to current cash payments and
then to non-cash benefits.”
8. The following Section is
added to the end of Section 9 as Section 9(g) of the Employment
Agreement:
(g) Specified
Employee. Notwithstanding any other provision of this Agreement, if
(i) the Executive is to receive payments or benefits under Section 9 by reason
of his separation from service (as such term is defined in Section 409A of the
Code) other than as a result of his death, (ii) the Executive is a “specified
employee” within the meaning of Code Section 409A for the period in which the
payment or benefits would otherwise commence, and (iii) such payment or benefit
would otherwise subject the Executive to any tax, interest or penalty imposed
under Section 409A of the Code (or any regulation promulgated thereunder) if the
payment or benefit would commence within six months of a termination of the
Executive’s employment, then such payment or benefit required under Section 9
shall not commence until the first day which is at least six months after the
termination of the Executive employment. Each severance installment
contemplated under this Section 9 shall be treated as a separate payment in a
series of separate payments under Treasury Regulation Section
1.409A-2(b)(2)(iii). Such payments or benefits, together with simple
interest calculated at LIBOR as of the date of such separation from service,
which would have otherwise been required to be made over such six month period,
shall be paid to the Executive in one lump sum payment or otherwise provided to
the Executive as soon as administratively feasible after the first day which is
at least six months after the termination of Executive’s
employment. Thereafter, the payments and benefits shall continue, if
applicable, for the relevant period set forth above. For purposes of
this Agreement, all references to “termination of employment” and other similar
language shall be deemed to refer to the Executive’s “separation from service”
as defined in Treasury Regulation Section 1.409A-1(h), including, without
limitation, the default presumptions thereof.
XXXXX-MIDLAND
CORPORATION
By: /s/ Xxxxxx X Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
Vice President of Administration
By: /s/ Xxxxxx X. Xxxxx
XXXXXX
X. XXXXX
