Exhibit 10.11
THIRD AMENDMENT
TO
EMPLOYMENT AGREEMENT
This Third Amendment to Employment Agreement is made and entered into
effective as of January 1, 2003, by and between WATSCO, INC., a Florida
corporation (hereinafter called the "Company"), and XXXXXX X. XXXXXX
(hereinafter called the "Employee").
RECITALS
WHEREAS, the Company and the Employee entered into an Employment
Agreement effective as of January 31, 1996 (the "Employment Agreement") pursuant
to which the Employee renders certain services to the Company; and
WHEREAS, the Compensation Committee of the Company's Board of Directors
amended the Employment Agreement effective as of January 1, 2001 and January 1,
2002; and
WHEREAS, the Compensation Committee of the Company's Board of Directors
has determined to increase the Employee's Base Salary from $750,000 to $850,000,
effective as of January 1, 2003, and has set the targets for the performance
based compensation payable by the Company to the Employee for the year 2003; and
WHEREAS, the Company and the Employee now desire to amend Employment
Agreement and Exhibit A-1 to the Employment Agreement to reflect the increase in
Base Salary and specify the performance based compensation amount payable by the
Company to the Employee for the calendar year 2003.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Third Amendment, and other good and valuable consideration,
the parties to this Third Amendment agree as follows:
1. All capitalized terms in this Third Amendment shall have the
same meaning as in the Employment Agreement, unless otherwise specified.
2. The first sentence of Section 4 of the Employment Agreement is
hereby amended to read as follows:
"Effective as of January 1, 2003, the Company agrees to
pay to Employee and Employee agrees to accept from the
Company a salary at the annual rate of not less than
Eight Hundred Fifty Thousand ($850,000) Dollars,
payable in bi-weekly or monthly installments."
3. The Employment Agreement is hereby amended by replacing "Exhibit
A-1 -- 2002 Performance Goals and Performance Based Compensation" with the
attached "Exhibit A-1 -- 2003 Performance Goals and Performance Based
Compensation" thereto.
4. All other terms and conditions of the Employment Agreement shall
remain the same.
IN WITNESS WHEREOF, the parties have caused this Third Amendment to be
duly executed effective as of the day and year first above written.
COMPANY:
WATSCO, INC.
By: /s/Xxxxx X. Xxxxx
-----------------
Xxxxx X. Xxxxx, Vice President
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxx
--------------------
XXXXXX X. XXXXXX
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EXHIBIT A-1
2003 Performance Goals and Performance Based Compensation
V. Formula
Performance
Based
Compensation Formula
--------------------
A. Earnings Per Share
For each $.01 increase............................................ $ 65,250
B. Increase in Common Stock Price
(i) If the closing price of a share of Common Stock on 12/31/03 does
not exceed $16.38................................................. $ 0
(ii) If the closing price of a share of Common Stock on 12/31/03
exceeds $16.38 but does not equal or exceed $19.25, for each $0.01
increase in per share price of a share of Common Stock above $16.38
$ 1,200
(iii) If the closing price of a share of Common Stock on 12/31/03
equals or exceeds $19.25, for each $0.01 increase in per share price
of a share of Common Stock above $16.38........................... $ 1,800
VI. Method of Payment
A. Cash. The Performance Based Compensation determined for 2003
under the formula set forth in Section I above shall be paid in
cash if and to the extent such Compensation does not exceed
$1,500,000.
B. Restricted Stock. If the Performance Based Compensation
determined for 2003 under the formula set forth in Section I
above exceeds $1,500,000 (such excess amount being referred to as
the "Additional Amount"), the Executive shall be granted a number
of shares of restricted Class B Common Stock of the Company (the
"Shares") equal to the amount determined by dividing (i) two
times the Additional Amount, by (ii) the closing price for the
Class B Common Stock of the Company on the American Stock
Exchange as of the close of trading on December 31, 2003. The
value of any fractional shares shall be paid in cash. The
restrictions on the Shares shall lapse on the first to occur of
(i) October 15, 2015 (ii) termination of the Executive's
employment with the Company by reason of Executive's disability
or death, (iii) the Executive's termination of employment with
the Company for Good Reason; (iv) the Company's termination of
Executive's employment without Cause, or (v) the occurrence of a
Change in Control of the Company ("Good Reason", "Cause", and
"Change in Control" to be defined in a manner consistent with the
most recent grant of Restricted Stock by the Company to the
Executive).
VII. 2001 Incentive Compensation Plan
The performance based award and method of payment specified
above (the "Award") were made by the Compensation Committee in
accordance with Section 8 of the Company's 2001 Incentive Compensation
Plan (the "Incentive Plan") and are subject to the limitations
contained in Section 5 of the Incentive Plan. The Award is intended to
qualify as "performance based compensation" under Section 162(m) of the
Internal Revenue Code.
Dated: Effective as of January 1, 2003 /s/Xxxx Xxxxxx
--------------------------
Xxxx Xxxxxx, Chairman
Compensation Committee
Acknowledged and Accepted:
/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
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