1
EXHIBIT 10.13
AMENDMENT TO THE INTERIM MANAGEMENT AGREEMENT
BETWEEN AQUA-CHEM, INC. AND X. XXXXXX MANAGEMENT, INC.
DATED 8 JULY 1996
WHEREAS, the parties entered into the above-referenced Agreement; and
WHEREAS, the parties are desirous of extending the Agreement so that
Xxxxxxx X. Xxxxxx will continue to act as Chief Executive Officer of Aqua-Chem,
Inc., as an independent contractor through X. Xxxxxx Management, Inc.;
In consideration of the mutual promises hereinafter set forth, the
parties agree to amend the original agreement of the designated paragraphs
seriatim.
2. Term. The term of this Agreement shall extend from January 1, 1997
through December 31, 1997, unless terminated earlier in accordance with the
terms of the original Agreement.
3. Compensation. The Company agrees to continue to compensate JMM
$10,000 per week, payable monthly, according to the terms of paragraph 3.
Paragraph 3 is further amended to incorporate the following:
3.1. Incentive Compensation. JMM shall be paid Incentive Compensation
according to the schedule set forth on the attached Exhibit A.
3.2. Sale Bonus. If Aqua-Chem is sold and closed before December 31,
1998, JMM shall receive a Sale Bonus pursuant to the schedule set forth
on the attached Exhibit B.
4. Expenses. Expense reimbursement to JMM shall continue under the
current arrangement for the duration of the term of this Agreement.
Except as modified herein, all other terms of the Interim Management
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Company, JMM and Xxxxxx, have executed this Agreement on
this ______ day of January, 1997.
AQUA-CHEM, INC. X. XXXXXX MANAGEMENT, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ XX Xxxxxx
------------------------------ ---------------------------
Name Xxxxxxx Xxxxx Xxxxxxx X. Xxxxxx
President
Its: Director
-------------------------------
Title XXXXXXX X. XXXXXX
By: /s/ XX Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, Individually
2
EXHIBIT 10.13
Exhibit A to the January ____, 1997
Amendment to
the JMM Interim Management Agreement
Re: INCENTIVE COMPENSATION
JMM shall be paid Incentive Compensation (hereafter "IC") in accordance with
Aqua-Chem' s RONA (return on net assets)-based IC program for senior executives,
calculated under the following formula:
IC = Base compensation x 100% participation rate x % payout
where
Base compensation = $356,213
Participation rate, % = 100%
Payout, % = % payout rate as that defined in the Aqua-Chem
IC Plan of 11/96
The IC shall be due and payable immediately upon the close of Aqua-Chem's fiscal
year-end 1997, but no later than January 20, 1998.
INITIAL:
AQUA-CHEM, INC.
By: /s/ PB
-------
X. XXXXXX MANAGEMENT, INC.
By: /s/ JAM
-------
3
EXHIBIT 10.13
INCENTIVE COMPENSATION
PURSUANT TO PARAGRAPH 3.1
EXAMPLES
===========================================================================================
If EBIT Is: Then Incentive Compensation Is:
===========================================================================================
Less than $6.7 million $ 00
-------------------------------------------------------------------------------------------
Equal to $6.7 million $356,000 x 100% x 50% = $178,000
-------------------------------------------------------------------------------------------
Equal to $11 million $356,000 x 100% x 100% = $356,000
-------------------------------------------------------------------------------------------
Equal to $14 million $356,000 x 100% x 125% = $445,000
-------------------------------------------------------------------------------------------
Equal to $17 million $356,000 x 100% x 150% = $534,000
-------------------------------------------------------------------------------------------
4
EXHIBIT 10.13
Exhibit B to the January ____, 1997 Amendment to
the JMM Interim Management Agreement
Re: SALE BONUS
JMM shall be paid a Sale Bonus if Aqua-Chem is sold, calculated according to the
formula reflected in the attached schedule and based on the definitions below:
Definitions
"Net Consideration" shall mean the net present value of all consideration
received by (i) the Company (in the case of an asset transaction) net of
corporate-level income tax, or (ii) the shareholders of the Company, in the case
of the Sale of the stock of the Company or a merger, in either case net of all
expenses of the transaction.
"Sale" shall mean (i) a sale, at any time and from time to time, of
substantially all of the assets of the Company to a third party not related to
the Company, (ii) a sale to a management buy-out, (iii) a sale at any time
during the Employment Term of substantially all classes of outstanding stock of
the Company to a third party not related to the Company, or (iv) a merger or
consolidation in which upon consummation (x) the Company is not the surviving
corporation or (y) the current shareholders of the Company do not own a
controlling interest in the surviving company. Any Sale shall occur, if at all,
at the sole discretion of the shareholders of the Company.
The Sale Bonus shall be due and payable to JMM immediately after closing of the
Sale of Aqua-Chem
INITIAL:
AQUA-CHEM, INC.
By: /s/ PB
---------
X. XXXXXX MANAGEMENT, INC.
By: /s/ JAM
----------
5
EXHIBIT 10.13
SALE BONUS
PURSUANT TO PARAGRAPH 3.2
EXAMPLES
=============================================================================================
If the Net Consideration Is: The Sale Bonus Is:
=============================================================================================
Less than $40 million $356,000
---------------------------------------------------------------------------------------------
Equal to or greater than $40 million, but $356,000 plus 1% of Net Consideration over $40
less than or equal to $45 million million.
---------------------------------------------------------------------------------------------
Greater than $45 million, but $356,000 plus 1% of Net Consideration over $40
less than or equal to $50 million million but not $45 million, and 2% of Net
Consideration over $45 million.
---------------------------------------------------------------------------------------------
Greater than $50 million, $356,000 plus 1% of Net Consideration over $40
but less than or equal to $55 million million but not over $45 million, and 2% of Net
Consideration over $45 million but not over
$50 million, and 3% of Net Consideration over
$50 million,
---------------------------------------------------------------------------------------------
Greater than $55 million, $356,000 plus 1% of Net Consideration over
but less than or equal to $60 million million but not over $45 million, and 2% of Net
Consideration over $45 million but not over $50
million, and 3% of Net Consideration over $50
million but not over $55 million, and 4% of Net
Consideration over $55 million but not over $60
million, and 5% of Net Consideration over $60
million.
==============================================================================================
EXAMPLES
=============================================================================================
If the Net Consideration Is: The Sale Bonus Is:
=============================================================================================
Equal to $40 million $356,000
Equal to $45 million $356,000 + $ 50,000 = $ 406,000
Equal to $50 million $356,000 + $150,000 = $ 506,000
Equal to $55 million $356,000 + $300,000 = $ 656,000
Equal to $60 million $356,000 + $500,000 = $ 856,000
Equal to $65 million $356,000 + $750,000 = $1,106,000
=============================================================================================
6
EXHIBIT 10.13
X. Xxxxxx Management, Inc. Letterhead
January 15, 1997
PRIVATE & CONFIDENTIAL
Xx. Xxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxxxxxx Xxxxx S.C.
Suite 2100
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000 phone
(000) 000-0000 fax
Re: Addendum to the Extension of Xxxx Xxxxxx'x Contract with
Aqua-Chem, Inc. for 1997
Dear Xxx:
Enclosed please find a signed copy of the Extension of Xxxx Xxxxxx'x Contract
with Aqua-Chem for 1997, which Xxxxxxx Xxxxx and I signed on Sunday evening,
January 12, after my discussion with the Compensation Committee (Xxxxxxx Xxxxx,
Xxxx Xxxxxxx, and Xxxx Xxxxxxxxxx). Directors Xxxxxxx & Xxxxxxx joined us during
the discussion. (To what extent Xxxxxxx or Xxxxxxx participated in the
discussions I am not aware, as I was asked to leave the room for part of the
meeting.)
In addition to the Extension, I agree to the added condition by the Committee
that I be willing to extend this Agreement for an additional two years after the
closing date in the event of a sale of the Company to a third party. Xxxxxxx
indicted to me on the phone today that he would be satisfied with having you or
my attorney documents this further agreement. If you would add an addendum
covering this to the Extension, I would appreciate it. As I told Xxxxxxx, I am
willing to agree to the 2-year extension commitment on the basis that all other
terms of the Interim Management Agreement otherwise remain in "full force and
effect". However, there is one other stipulation that I would make, that the
base compensation and fees in the agreement increase by a minimum of 5%
annually, should this 2-year extension become necessary.
Secondly, Xxxxxxx would like to document the fact that the Sale Bonus, as
amended in paragraph 3.2, should be ascribed to two parts as follows:
Part I. Change of Control One year's base compensation
Part II. Sale Bonus An amount as calculated according to the
formula in Exhibit B (less the $356,000 base
compensation, which is paid under Part 1).
After you have had a chance to draft the addendum, I would appreciate it if you
would fax it to my personal attorney, Xxxxx Xxxxxx in Birmingham, MI at
810/645-1233 for his review.
Sincerely,
X. XXXXXX MANAGEMENT, INC.
/s/ Xxxx
Xxxx Xxxxxx
President
