EXHIBIT 10.4
AGREEMENT
THIS AGREEMENT is made and entered into this 27th day of June, 1997 by
and among CTI Industries Corporation, a Delaware corporation (the "Company") and
Xxxx X. Xxxxx ("Xxxxx").
WHEREAS, the Company and Xxxxx have entered into an Employment
Agreement dated April 29, 1996 ("Employment Agreement") and a Stock Redemption
Agreement dated March 1, 1996 ("Redemption Agreement").
WHEREAS, the parties desire to enter into an agreement amending and
extending the Employment Agreement and the Redemption Agreement.
NOW, THEREFORE, in consideration of the premises and of the terms,
covenants and conditions hereinafter contained, the parties hereto agree as
follows:
1. Amendment to Employment Agreement. The Employment Agreement is
hereby amended as follows:
1.1 The term of the Employment Agreement is extended to
January 31, 2000.
1.2 Commencing February 1, 1998, the annual rate of salary
payable to Executive under the Employment Agreement shall be $120,000.
1.3 Commencing on the date on which the present lease for the
automobile now provided to Xxxxx expires (on or about December 31,
1997), the Company shall provide to Xxxxx for the remaining term of the
Employment Agreement an automobile allowance of $500 per month.
1.4 Effective on February 1, 1998 and for the remaining term
of the Employment Agreement, the Company shall reimburse Xxxxx for the
regular monthly dues (excluding any periodic charges) for one country
club (not to exceed $450); provided that such dues shall not be payable
during any fiscal quarter of the Company if the sales revenues of the
Company during the preceding fiscal quarter shall be less than the
sales forecast approved by management of the Company.
1.5 Xxxxx contemplates that he will commence activities as an
independent consultant and sales agent at some point prior to January
31, 2000 and may provide such services to, and receive compensation
from, companies other than the Company. The Company consents to such
activities on the part of Xxxxx provided that (i) such activities shall
not interfere with the performance by Xxxxx of his duties under the
Employment Agreement and (ii) Xxxxx shall not perform services for any
company which is engaged in the manufacture, marketing or sale of any
product which is manufactured, marketed or
sold by the Company.
1.6 Except as amended by the foregoing, the Employment
Agreement shall remain in full force and effect in accordance with its
terms.
2. Amendment to Redemption Agreement. The Redemption Agreement is
hereby amended as follows:
2.1 For the period from March 1, 1998 through February 28,
2000, the Company shall have the option and right to purchase up to
866,666 shares (less the number of shares purchased and redeemed
pursuant to paragraph 1 of the Redemption Agreement) of Common Stock of
the Company from Xxxxx at the price of $.75 per share. The option may
be exercised at any time or from time to time with respect to all, or
any portion, of the shares subject to the option by written notice to
Xxxxx.
2.2 For the period from March 1, 1998 through February 28,
2000, the Company shall have the obligation to purchase and redeem from
Xxxxx, and Xxxxx shall have the obligation to sell and deliver to the
Company, up to 866,666 shares (less the number of shares purchased and
redeemed pursuant to paragraph 1 of the Redemption Agreement and
paragraph 2.1 of this Agreement) at the price of $.75 per share on the
terms provided in this paragraph:
2.2.1 For such period, the Company shall have the
obligation to pay to Xxxxx, as the purchase price for shares
of Common Stock to be purchased and redeemed from him:
(A) An amount equal to two percent (2%)
of the profits of the Company,
before provision for income tax,
determined on a fiscal quarterly
basis (commencing with the first
fiscal quarter of 1988 - the period
from November 1, 1997 to February
28, 1998) and on the basis of
generally accepted accounting
principles consistently applied,
and,
(B) An amount equal to two percent (2%)
(but not exceeding the sum of
$8,000) of the amount by which
revenues of the Company from the
sale of mylar and latex balloons and
associated items and accessories
exceed the sum of $1,300,000.
2.2.2 The amount to be paid pursuant to paragraph
2.2.1(A) shall be determined and paid on a fiscal quarterly
basis within 45 days after the end of each such quarter. The
amount to be paid pursuant to paragraph 2.2.1(B) shall be
determined on a monthly basis and paid within 30 days after
the last day of the
2
month for which the payment is due.
2.2.3 Notwithstanding the other provisions of this
Agreement, for any period in which any amount would otherwise
be due to Xxxxx hereunder, if at such time, all of the shares
subject to purchase and redemption by the Company hereunder
shall have been purchased and redeemed, no amount shall be due
from the Company to Xxxxx hereunder for such period.
2.2.4 The provisions of this paragraph 2 of this
Agreement shall supersede in their entirety the provisions of
paragraphs 2 and 3 of the Redemption Agreement. Except as
provided herein, the Redemption Agreement shall remain in full
force and effect in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CTI INDUSTRIES CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
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XXXXX:
/s/ Xxxx X. Xxxxx
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