FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement ("Amendment") is made by
XXXXX BROTHERS, INC. ("Company"), a Delaware corporation, and XXXXX X. XXXXXXX
("Consultant"), a married man, is effective February 2, 1997 ("Modification
Date"), and is a modification of and an amendment to that certain Employment
Agreement dated March 11, 1996 by and between Xxxxx Brothers, Inc. and Xxxxx X.
Xxxxxxx ("Agreement").
Company and Consultant desire that Consultant's employment by Company
terminate and that Consultant be engaged as an independent contractor for
Company, as provided in this Amendment.
In consideration of the mutual promises and covenants contained herein,
and other good and valuable consideration, the receipt of which is acknowledged,
Company and Consultant agree as provided in this Amendment.
1. Section 1 of the Agreement is hereby amended, effective on the
Modification Date, to read in its entirety as follows:
Company retains Consultant, and Consultant agrees to render
services to Company, upon the terms and conditions of this
Agreement. Company and Consultant agree that Consultant will
be an independent contractor, that Consultant will not be an
employee of Company for federal tax or other purposes, that
Consultant may render consulting services for third parties
(provided he is not in breach of this Agreement), that
Consultant will not be eligible for the employee benefits
offered by Company to its employees in general (except for
such benefits as are specifically provided in this Agreement),
and that Company will not withhold any taxes from the
compensation it pays to Consultant hereunder. Consultant shall
be responsible for any quarterly estimated tax payments, and
shall indemnify Company against Consultant's income and
self-employment tax liabilities, on such compensation paid to
him by Company.
2. Section 2 of the Agreement is hereby amended, effective on the
Modification Date, to read in its entirety as follows:
Consultant shall be retained as a consultant for Company for a
period 90 days beginning February 2, 1997. In addition,
Company shall have the one time option to extend Consultant's
engagement hereunder for an additional 60 days by giving
written notice to Consultant of Company's election to exercise
such option provided such notice is given before the
expiration of the 90-day consulting period. However, if
Consultant receives and negotiates a payment from Company for
compensation for the period following the expiration of such
90-day period, then Company and Consultant shall be deemed to
have extended Consultant's engagement hereunder as a
consultant for Company for such additional 60-day period.
Company and Consultant agree that the change of Consultant's
title and duties and the termination of Consultant's employment by Company shall
be, for all purposes, deemed to be a voluntary resignation by Consultant and not
a breach of the Agreement by Consultant. Consultant hereby resigns as an officer
of Company effective on the Modification Date.
3. Section 3 of the Agreement is hereby amended, effective on the
Modification Date, to read in its entirety as follows:
During the period of Consultant's engagement with Company,
Consultant shall perform such consulting services as may be
reasonably requested by Company from time to time including,
without limitation, the following:
(a) Assisting Company in making the transition from
Consultant being the president and chief executive officer of
Company to his successor assuming such duties;
(b) Consulting with Company in connection with its
possible disposition of its subsidiary Xxxxx Brothers of
Texas, Inc.; and
(c) Consulting with Company in connection with any
proposed acquisition by Company of other companies or
businesses.
In addition, during the period of Consultant's engagement by
Company as a consultant, Consultant may continue to serve on
the board of directors of Company at the
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pleasure of the shareholders of Company. Consultant desires to
continue serving on the Board of Directors of Company.
Accordingly, Company shall nominate Consultant for reelection
to the board of directors of Company.
4. Section 4 of the Agreement is hereby deleted effective on the
Modification Date. Consultant hereby resigns as an officer and as a member of
the board of directors of each of Company's subsidiary or affiliated
corporations who agree to and accept this Amendment by their execution below.
5. Section 5 of the Agreement is hereby amended, effective on the
Modification Date, to read in its entirety as follows:
During the period of Consultant's engagement by Company,
Consultant shall receive from Company compensation equal to
$5,000 per month.
In addition, Consultant shall receive from Company the sum of
$4,807.69, less all applicable withholding, for two weeks of vacation pay which
was accrued but unpaid as of the Modification Date, and such sum shall be
payable to Consultant on Company's next payroll payment date.
6. Section 6 of the Agreement is hereby deleted effective on the
Modification Date.
7. Section 7 of the Agreement is hereby amended, effective on the
Modification Date, to read in its entirety as follows:
Company shall continue covering Consultant on Company's health
insurance plan, at Company's expense, for the period
Consultant is engaged as a consultant hereunder. Company shall
provide such coverage for Consultant's dependents, at
Consultant's expense, if Consultant elects such additional
coverage. Consultant's COBRA rights shall commence upon the
expiration of his engagement as a consultant for Company under
this Agreement.
8. Section 8(c) of the Agreement is hereby amended, effective on the
Modification Date, by deleting therefrom the words "(including those named in
Section 4 above)".
9. Company and Consultant acknowledge that Consultant exercised his
option under, and purchased 100,000 shares of Company's $0.01 par value voting
common stock pursuant to, Section 9(a) of the Agreement. Company and Consultant
further
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acknowledge that Consultant purchased from Company, and currently owns, an
additional 100,000 shares of Company's $0.01 par value voting common stock. In
addition, Company and Consultant agree that the option granted by Company to
Consultant pursuant to that certain Incentive Stock Option Agreement dated
October 22, 1996 to purchase 30,000 shares of Company's $0.01 par value common
stock for $3.50 per share is fully vested and the Incentive Stock Option
Agreement is otherwise hereby ratified and confirmed. Consultant acknowledges
that he has been granted no options, and is not entitled to be granted any
additional options, to purchase shares of Company's capital stock except as
specifically provided for or referenced in the Agreement and this Amendment.
The last sentence of Section 9(b) of the Agreement is hereby amended,
effective on the Modification Date, to read as follows:
The option granted under this subsection
shall be fully vested on April 1, 1997.
Sections 9(c) and 9(d) of the Agreement are hereby
deleted effective on the Modification Date.
10. Company and Consultant agree that all references in
Section 10 of the Agreement and in all other sections of the Agreement to
"Employee" are to "Consultant", effective on the Modification Date.
11. Section 11(a) of the Agreement is hereby amended,
effective on the Modification Date, to delete the phrase "for a one-year period
thereafter" on the second line thereof and to insert in lieu thereof the phrase
"and thereafter through January 31, 1998."
12. Section 12(c) of the Agreement is hereby deleted effective
on the Modification Date.
13. Section 13 of the Agreement is hereby amended, effective
on the Modification Date, to delete the words "named in Section 4 above" from
the second line thereof and to delete the words "(including those named in
Section 4 above)" in both places such words appear therein.
14. Section 14 of the Agreement is hereby amended, effective
on the Modification Date, to delete the words "or popcorn" and the words "and
popcorn" wherever they appear therein and to delete the words "the date of
termination of Consultant's employment by Company" in the second sentence
thereof and to insert in lieu thereof the words "February 2, 1997".
15. Section 15 of the Agreement is hereby amended, effective
on the Modification Date, by renumbering such section as Section 16. A new
section 15 is hereby added to the Agreement, effective on the Modification Date,
as follows:
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15. Releases.
(a) Consultant, on behalf of himself and his marital
community, heirs, executors, personal representatives and
assigns, does hereby release and forever discharge Company and
any subsidiary company and any other company affiliated with
or under common ownership with Company, and each of their
respective current and former officers, partners, principals,
directors, shareholders, attorneys, employees, agents,
servants, representatives, independent contractors,
guarantors, heirs, successors, insurers, assigns, and all
affiliated entities, hereinafter collectively referred to as
the "Released Parties," from any and all claims, demands,
causes of actions, or liabilities of any kind or character,
known or unknown, arising or accruing through February 2,
1997, including, without limitation, all claims that are in
any way related to Consultant's employment by Company under
this Agreement (except for the provisions hereof which are
specifically stated herein to survive) or the change in
Consultant's status from an employee to that of an independent
contractor.
(i) Without limiting the generality of the
foregoing, the full release contained in this subsection (a)
applies to all claims arising prior to February 2, 1997 under
the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act of
1990, the Labor Management Relations Act, the Consultant
Retirement Income Security Act of 1974, the Fair Labor
Standards Act, the Family and Medical Leave Act, the
Immigration Reform and Control Act, the Consolidated Omnibus
Budget Reconciliation Act, the occupational Safety and Health
Act, or any comparable state occupational safety and health
statute, the Workers' Adjustment and Retraining Act, 42 U.S.C.
ss. 1981, the Arizona Civil Rights Act, the Arizona Wage Act,
and any other applicable state or federal statute, and any
common law cause of action, including without limitation
claims for breach of contract, wrongful discharge, unpaid
wages, tort, personal injury, or any claim for attorney's fees
or other damages, costs or expenses of any kind or nature.
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(ii) Notwithstanding the foregoing, the
release by Consultant contained in this subsection (a) does
not waive any claim arising out of any breach or alleged
breach of this Agreement from and after February 2, 1997 by
Consultant, or any claim that may arise under or by reason of
Consultant's engagement by Company as an independent
contractor for Company.
(iii) Each of the Released Parties (other
than Company) is intended as, and is expressly designated as,
a third party beneficiary of this subsection (a).
(iv) Upon termination of Consultant's
employment by Company, Consultant shall return all of
Company's property that is in his possession, custody, or
control including, without limitation, the automobile, credit
card and cellular telephone to which reference is made below,
and all records, files, goods, equipment, documents, computer
software, data, disks, and any other property of Company and
any copies thereof.
(v) Consultant agrees not to make any
defamatory comments about Company to any person after February
2, 1997.
(vi) Consultant agrees not to bring a lawsuit
against Company or to file or lodge any type of complaint
against Company alleging violation of any law by Company with
any governmental agency arising from Consultant's employment
by Company through February 1, 1997.
(vii) The remedies specifically provided by
this subsection (a) are not exclusive, and are cumulative
with, and in addition to, any other remedy now or hereafter
available at law. Without limiting the generality of the
foregoing, Company may pursue injunctive relief, actual
damages, and/or any other remedy provided at law.
(viii) Consultant understands and agrees that
Company is not admitting to any liability to Consultant and is
making a compromise and settlement.
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(ix) Consultant is advised to consult with an
attorney respecting this subsection (a). By his signature
below, Consultant acknowledges that he has been so advised,
and that he has had an opportunity to consult with an
attorney.
(x) Consultant acknowledges that he has been
given a period of twenty-one (21) days within which to
consider this Subsection (a).
(xi) For a period of seven days following
February 2, 1997, Consultant may revoke this Agreement, as
amended effective February 2, 1997, in which case it shall not
become effective or enforceable. The provisions of this
Agreement, as amended effective February 2, 1997, shall become
effective upon the eighth day following such date provided
Consultant has not revoked the same as provided above.
(b) Company, on its behalf and on behalf of its
successors and assigns, and each of Company's subsidiary and
affiliated companies, on their behalf and on behalf of their
respective successors and assigns, herein collectively the
"Company Releasors", hereby freely and voluntarily forever
release and discharge Consultant and his spouse, and their
respective heirs, personal representatives, successors and
assigns, and their respective attorneys, agents and
representatives, herein collectively the "Consultant
Releasees", of and from any and all claims, demands, causes of
action, suits, damages, losses, costs and expenses of any kind
or nature whatsoever (collectively "Company Claims") resulting
from, arising out of, or any way connected with or concerning
Consultant's employment by Company through February 1, 1997,
or the change in Consultant's titles and duties on February 2,
1997.
(i) This subsection (b) is intended by the
Company Releasors and the Consultant Releasees as a full and
complete settlement of the rights and obligations among them
concerning such employment and such change in titles and
duties, and the release and discharge of the Company Claims
includes all claims and causes of action under federal
statutes and regulations, Arizona statutes and regulations,
all other statutes and governmental ordinances, rules and
regulations, and all constitutional, common law, tort and
contract claims and remedies that the Company Releasors have
ever had or now has, known or unknown,
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suspected or unsuspected, contingent or otherwise, or that
anyone claiming through or under the Company Releasors or any
of them ever had or now has or claim to have against the
Consultant Releasees or any of them.
(ii) Notwithstanding the foregoing, the
release and discharge by Company of the Company Claims does
not waive any claim arising out of any breach or alleged
breach of this Agreement from and after February 2, 1997 by
Consultant, or any claim that may arise by reason of
Consultant's engagement as an independent contractor for
Company.
(iii) Each of the Consultant Releasees (other
than Consultant) is intended to be, and is expressly
designated as, a third party beneficiary of this subsection
(b).
(iv) Company agrees that none of the Company
Releasors and none of the Released Parties described under
subsection (a) shall make any defamatory comments about
Consultant or Consultant's employment by Company or any of its
subsidiary or affiliated companies after February 2, 1997.
(v) Company and its subsidiary and affiliated
companies, by their execution below, agree not to bring a
lawsuit against any of the Consultant Releasees or to file or
lodge any type of complaint against Consultant alleging
violation of any law by Consultant with any governmental
agency arising from Consultant's employment by Company or any
of such subsidiary or affiliated companies or the change in
Consultant's titles and duties.
(vi) The remedies provided in this subsection
(b) are not exclusive and are cumulative with, and in addition
to, any other rights and remedies now or hereafter available
at law or in equity. Without limiting the generality of the
foregoing, the Consultant Releasees may pursue injunctive
relief, actual damages and/or any other remedy provided at law
or in equity.
(vii) The Company Releasors understand and
agree that Consultant is not admitting to any liability to any
of the Company Releasors and is making a compromise and
settlement.
16. Sections 16(a), (b), (d) and (e) (formerly subsections of
Section 15) of the Agreement are hereby amended by deleting from each such
subsection the words "(and its subsidiaries named in Section 4 above)" and
inserting in lieu
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thereof the words "and its subsidiaries and affiliates". Section 16(j) (formerly
Section 15(j)) of the Agreement is hereby amended, effective on the Modification
Date, by deleting therefrom the words "which includes those named in Section 4".
17. Subsection (g) of Section 16 (formerly Section 15) of the
Agreement is hereby amended, effective on the Modification Date, to read in its
entirety as follows:
This Agreement is being approved and accepted by
Xxxxx Brothers Arizona, Inc., Xxxxx Brothers Distributing,
Inc., Xxxxx Brothers of Texas, Inc., and Xxxxx Brothers
Southeast, Inc., and is also being approved and accepted by
Xxxx X. Xxxxxxx. By their execution below, each of such
subsidiaries or affiliates of Company agree to be bound by all
of the terms and provisions of this Agreement that are
applicable to Company or to any of such subsidiaries or
affiliates. By her execution below, Xxxx X. Xxxxxxx, who is
the wife of Consultant, agrees to be bound by all of the terms
and provisions of this Agreement that are applicable to
Consultant.
18. New subsections (k) and (l) are hereby added to Section 16
(formerly Section 15) of the Agreement, effective on the Modification Date, as
follows:
(k) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
and all of which taken together shall be deemed to be one and
the same agreement. This Agreement may be executed and
delivered by facsimile transmission upon confirmation of
receipt by the other party, which will have the same effect as
delivery of the written Agreement.
(l) The provisions of Sections 9 through 16 of this
Agreement shall survive the termination of Consultant's
employment by Company and his engagement as a consultant for
Company.
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In witness whereof, Company and Consultant have executed this
Amendment as of the Modification Date.
XXXXX BROTHERS, INC.
By___________________________ _____________________________
Xxxxx X. Xxxxxxx
Its__________________________
[Company] [Consultant]
Agreed and Accepted by each of: Agreed and Accepted by:
XXXXX BROTHERS ARIZONA, INC. _____________________________
Xxxx X. Xxxxxxx
By______________________________
Its_____________________________
XXXXX DISTRIBUTING, INC.
By______________________________
Its_____________________________
XXXXX BROTHERS OF TEXAS, INC.
By______________________________
Its_____________________________
XXXXX BROTHERS SOUTHEAST, INC.
By______________________________
Its_____________________________
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