THIRD AMENDMENT TO EMPLOYMENT AGREEMENT Exhibit 10.20
THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT, which shall be deemed
effective as of the 20th day of March, 1998, is entered into by ITRON, INC.
(hereinafter referred to as the "Company") and XXXX XXXXXX XXXX (hereinafter
referred to as "Executive").
RECITAL
The Company and Executive are parties to an employment agreement, dated
as of November 22, 1995 (the "Original Agreement"), and two amendments thereto,
the first of which (the "First Amendment") is dated as of April 29, 1996, and
the second of which (the "Second Amendment") is dated as of December 17, 1997.
The Company and Executive agree that Good Reason, as defined in the Second
Amendment, exists for termination of the Employment Agreement by Executive.
Notwithstanding the existence of Good Reason for Executive to terminate the
Employment Agreement, the Company and Executive desire to continue their
employment relationship and modify the terms of the employment of Executive by
the Company, changing Executive's title and responsibilities, establishing a
minimum fixed term for Executive's employment, and setting forth certain terms
and conditions of his compensation and stock vesting benefits. The Company and
Executive therefore mutually agree to amend with this document Sections 1, 2.1,
4.3, 5.1, 5.3, 8, and 10.1 of the Original Agreement, as amended in the First
Amendment and the Second Amendment (together the "Employment Agreement"), in
accordance with the provisions of Section 10.3 of the Employment Agreement.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT
Section 1 of the Employment Agreement is amended to change the
description of Executive's title and responsibilities. The amended Section 1 of
the Employment Agreement reads as follows:
"The Company will employ Executive, and Executive will accept
employment by the Company, as the Executive Vice President and
Chief Strategist. Executive will have such authority, subject
to the Company's Articles of Incorporation and Bylaws, as may
be granted from time to time by the Chief Executive Officer or
the Board of Directors of the Company. Executive will perform
the duties customarily performed by the Chief Strategist of a
corporation and such other duties, consistent with and
appropriate to the Executive's position as an Executive Vice
President and Chief Strategist of the Company, as may
reasonably be assigned from time to time by the Chief
Executive Officer or the Board of Directors of the Company."
2. COMPENSATION
Section 2.1 of the Employment Agreement is amended to establish
Executive's base salary during the remaining term of the Employment Agreement.
The amended Section 2.1 of the Employment Agreement reads as follows:
"The Company shall pay Executive a base salary rate of Three
Hundred Fifteen Thousand Dollars ($315,000) per year, which
shall be subject to all customary payroll deductions and shall
be payable at the same intervals as are applicable to the
payment of the base salaries of other officers of the
Company."
3. STOCK OPTIONS
Section 4.3 of the Employment Agreement is amended to describe the
period during which Executive may exercise stock options following the
termination of his employment and to provide for the expection of granting of
additional stock options in 1998. The third paragraph of Section 4.3 is hereby
deleted, and a new third paragraph is added that reads as follows:
"It is anticipated that, assuming due performance of
Executive's duties hereunder as Executive Vice President and
Chief Strategist, the Chief Executive Officer of the Company
will recommend to the Compensation Committee of the Company's
Board of Directors the granting to Executive at the May 1998
meeting of the Compensation Committee of options to purchase
Thirty Thousand (30,000) shares of the Company's common stock
(in addition to those options already granted). Any granting
to Executive of additional stock options will be at the sole
discretion of the Compensation Committee. Following the
termination of Executive's employment under the Employment
Agreement for any reason, Executive will have a period of up
to ninety (90) days to exercise any and all options that have
vested as of the date of such termination or pursuant to the
acceleration described in Section 5.1."
4. TERMINATION OTHER THAN FOR CAUSE
Subsection 5.1 of the Employment Agreement is hereby amended to extend
the acceleration period for Executive's stock options upon termination of
employment and to add a description of the benefits to be received by Executive
in case of termination other than for Cause before February 28, 1999. The
amended Section 5.1 of the Employment Agreement reads as follows:
"5.1 TERMINATION OTHER THAN FOR CAUSE
5.1.1 In the event that (a) the Company terminates this
Agreement for any reason other than Cause (as hereinafter
defined),or (b) Executive terminates this Agreement for Good
Reason (as hereinafter defined), then, and in either of such
events, (x) the dates as of which any and all options
theretofore granted to Executive to purchase the Company's
common stock would have become vested in and exercisable by
Executive but for the effect of this Section 5 shall forthwith
upon such termination be accelerated by fifteen months, (y)
within ten (10) business days of such termination, the Company
shall pay Executive a Termination Amount of $750,000, and (z)
all salary, bonuses and payments under employee benefit plans
to which Executive may be entitled (including, without
limitation, the bonus described in Section 2.2 hereof) shall
become due and payable.
"5.1.2 In the event that the Company terminates Executive's
employment without Cause at any time before February 28, 1999,
the Company shall, in addition to the payments and benefits
set forth in the foregoing Section 5.1.1, (i) continue to pay
Executive an amount equal to his base salary at the time of
termination for the period through February 28, 1999, paid out
in installments at the same intervals as the Company's normal
executive payroll, (ii) within ten (10) business days of such
termination pay to Executive all bonuses and payments under
employee benefit plans to which Executive would have been
entitled (including, without limitation, the bonus described
in Section 2.2 hereof), had his employment continued through
February 28, 1999, and (iii) add to the acceleration of
options' vesting and exercisability pursuant to 5.1.1 (x) a
period equal to the number of days from the date of
termination to February 28, 1999."
5. TERMINATION FOR GOOD REASON
Subsection (a) of Section 5.3 of the Employment Agreement, is hereby
amended to change the definition of "Good Reason." The amended Section 5.3 of
the Employment Agreement reads as follows:
"'Good Reason' shall mean (a) a decision by Executive in his
sole discretion at any time that he does not wish to continue
his employment with the Company, (b) a reduction in
Executive's base salary, (c) any purported termination of
Executive's employment by the Company which is not effected
pursuant to the material requirements of this Agreement, (d) a
Change in Control (as identified in the Change in Control
Agreement annexed hereto as Exhibit II), or (e) the death or
disability (as defined and limited by Section 5.4 of the
Agreement) of the Executive during the term of this Agreement.
(In case of Executive's death while in the employ of the
Company under this Agreement or any extension thereof, the
termination payment described in Section 5.1.1 of this
Agreement will be paid to Executive's estate.)"
6. DURATION
Section 8 of the Employment Agreement is amended to establish a
termination date for Executive's employment with the Company, subject to earlier
termination as provided in other provisions of the Employment Agreement or
extension pursuant to this amendment. The amended Section 8 of the Employment
Agreement reads as follows:
"This Agreement shall terminate on February 28, 1999, unless
terminated earlier by either party hereto pursuant to Section
5 of the Agreement or extended on a month-to-month basis
thereafter through agreement of the parties. Termination of
this Agreement on February 28, 1999, or termination of
Executive's emloyment by the Company following any agreed
extension of this Agreement, shall, unless termination is 'For
Cause,' as defined in Section 5.3 of the Agreement, be deemed
a 'Termination Other Than for Cause,' triggering the Company's
obligations described in Section 5.1.1 of this Agreement.
Termination by Executive of this Agreement for 'Good Reason'
as defined in subsections (b), (c), (d), or (e) of Section
5.3, whether before, on or after February 28, 1999, shall also
trigger the Company's obligations described in Section 5.1.1
of this Agreement."
7. NOTICES
Section 10.1 of the Amended Employment Agreement is hereby amended to
read as follows:
"Every notice required by the terms of this Agreement shall be
given in writing by serving the same upon the party to whom it
was addressed personally or by registered or certified mail,
return receipt requested, at the address set forth below or at
such other address as may hereafter be designated by notice
given in compliance with the terms hereof:
If to Executive: Xxxx Xxxxxx Xxxx
0000 Xxxx Xxxxxxxxx Xxxx.
Xxxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Company: ITRON, Inc.
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
or such other address as shall be provided in accordance with the terms
hereof. If notice is mailed, such notice shall be effective upon mailing."
8. COUNTERPARTS
This Third Amendment to Employment Agreement may be executed in
counterparts, each of which counterpart shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed and entered into this
Third Amendment to Employment Agreement as of the date set forth above.
ITRON, INC.
By: /s/ XXXXX X. XXXXXXXXX
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Its President and Chief Executive Officer
/s/ XXXX X. XXXX
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Xxxx Xxxxxx Xxxx
