1
EXHIBIT 10.1
"AMENDMENT No. 1 TO EMPLOYMENT AGREEMENT"
This Amendment Number One To Employment Agreement is made as of April 15,
1999 and is entered into in Concord, New Hampshire, by and between Aavid Thermal
Technologies, Inc., a Delaware corporation with its principal place at Concord,
New Hampshire (the "Company"), and Xxxxxxx X. Xxxxxx of Concord, New Hampshire
(the "Executive").
WHEREAS, the company and Executive entered into a certain Employment
Agreement as of June 20, 1997 (the "Employment Agreement").
WHEREAS, the parties wish to amend the terms and bonus provisions of the
Employment Agreement, and to provide for changes of control of the Company.
NOW, THEREFORE in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth herein, the parties hereby
agree:
1. DEFINED TERMS. Words or terms not otherwise defined herein, shall have the
meaning as set forth in the Employment Agreement.
2. AMEND PARAGRAPH 2. Paragraph 2 shall be amended such that the automatic
renewal shall be extended from successive one (1) year terms to successive two
(2) year terms.
3. AMEND SCHEDULE A. Schedule A is hereby amended such that the annual bonus
target figure shall be the amount set annually by the Company's Compensation
Committee or Board of Directors.
4. NEW PARAGRAPHS. Add new paragraphs 14-21 to the Employment Agreement, as
follows, which describe Executive's "Change-In-Control" rights.
14) CHANGE-IN-CONTROL TERM. Notwithstanding any provision to the contrary
herein, this Change-In-Control provision shall be effective as of the
date of the date hereof and shall continue to be effective for the
period ending on the "Expiration Date" which shall coincide with the
end of the term of the Employment Agreement or any renewal thereof.
15) DEFINITION OF "CHANGE IN CONTROL". For the purposes of this Agreement,
a "Change in Control" of the Company shall be deemed to have occurred
upon:
a) An acquisition by any individual, entity or group (a "Person") of
beneficial ownership of fifty percent (50%) or more of the then
outstanding shares of common stock of the Company ("Common Stock");
b) A change in the composition of the Board such that the individuals
who, as of the date hereof, constitute the Board (the Board as of the
date hereof shall be hereinafter referred to as the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board;
provided, that in making such determination directors who were elected
by, or on the recommendation of, such present majority, shall be
excluded;
c) The occurrence of a (i) merger, consolidation, reorganization or
similar corporate transaction, in which the Company does not survive
as an independent public company; (ii) the sale or other disposition
of all or substantially all of the assets of the Company, or (iii) a
complete liquidation or dissolution of the Company.
16) COVERED TERMINATION. The termination benefits described in Section 17
hereof shall be provided to the Executive in the event that he suffers
a "Covered
-1-
2
Termination" of his employment with the Company during the "Protection
Period" or, to the extent provided in such Section 17, shall be
provided upon the earlier of a Change in Control or a Covered
Termination. For purposes hereof, the "Protection Period" shall be the
three-month period that commences on the date of the Change in
Control. For purposes hereof, "Covered Termination" shall mean (i)
termination of employment by the Company other than for "Cause" as
defined in this Employment Agreement or (ii) termination of employment
by the Executive for "Good Reason" as described below. During the
Protection Period, Company shall provide Executive with the same Base
Salary, bonus opportunities, and benefits as he received prior to the
Change-in-Control.
a) COMPENSATION DURING DISPUTE. If a dispute arises as to a
purported termination for Cause, and the Executive institutes a
proceeding for a determination as to rights under this Agreement,
the Company shall continue to pay the Executive the full
compensation in effect when the notice giving rise to the dispute
was given (including, but not limited to, salary and bonuses) and
continue the Executive as a participant in all compensation,
benefit and insurance plans in which the Executive was
participating when the notice giving rise to the dispute was
given, until final judicial determination as to whether Cause or
Good Reason existed. Amounts paid under this Section 25 are in
addition to all other amounts due under this Agreement and shall
not be offset against or reduce any other amounts due under this
Agreement.
b) TERMINATION FOR GOOD REASON. For purposes of this Agreement, the
Executive shall have "Good Reason" to terminate his employment
with the Company (i) if by the end of the Protection Period the
Company and Executive do not enter into a new or amended written
employment agreement; or (ii) if the Company breaches the terms
of this Employment Agreement as amended during the Protection
Period. For the purposes of subparagraph (i) above, Executive
shall have fifteen (15) days after the end of the Protection
Period to notify Company of his termination for Good Reason.
17) CONSEQUENCES OF COVERED TERMINATION. In the event that the Executive's
employment with the Company shall have been terminated during the
Protection Period in a manner that shall constitute a Covered
Termination, the Company shall provide the following severance
payments and benefits to the Executive:
a) BASE SALARY. Within fifteen (15) days following the Covered
Termination, the Company shall deliver to Executive a lump-sum cash
payment equal to 2.0 times the Executive's Base Salary in effect at
the time of the Covered Termination. For purposes of this Section 17,
the Executive's Base Salary shall be determined immediately prior to
any reduction in such salary rate that constitutes Good Reason under
Section 3 hereof.
b) BONUS. Within fifteen (15) days following the covered Termination, the
Executive shall receive a lump-sum cash payment of $75,000.00.
c) WELFARE BENEFITS. The Executive shall be entitled to coverage and
benefits, at the Company's sole expense, for a period of two years
following his Covered Termination (the "Continuation Period"), under
all welfare benefit plans of the Company. All such benefits shall
apply to the Executive and any of his dependents who would have been
eligible for coverage if the Executive had continued to be employed by
the Company for the Continuation Period. At the expiration of the
Continuation Period, the Executive shall be treated as a then
terminating employee of the Company with respect to the right to elect
continued medical and dental Coverages in accordance with section
4980B of the Internal Revenue Code of 1986, as amended.
-2-
3
d) OUTPLACEMENT. During the twelve-month period commencing on the
date of Covered Termination, the Company shall provide to the
Executive, at the Company's sole expense, executive outplacement
services (commensurate with the Executive's position), office
space and secretarial support services.
18) INSURANCE. The Company shall maintain in full force and effect for the
benefit of the Executive, for the duration of all applicable statute
of limitations periods, liability insurance policies at least as
favorable to the Executive as those maintained by the Company for the
benefit of its directors and officers at the time of the Change in
Control, provided that such policies are provided to its directors and
officers generally or are reasonably obtainable by the Company.
19) NO OBLIGATION TO MITIGATE. The Executive shall be under no obligation
to minimize or mitigate damages by seeking other employment, and the
obtaining of any such other employment shall in no event effect any
reduction of the Company's obligation to make the payments and provide
the benefit Coverages required under this Agreement.
20) SUCCESSORS AND ASSIGNS. This Agreement and all rights hereunder are
personal to the Executive and shall not be assignable; provided,
however, all of the Executive's rights to compensation following his
death shall inure to the benefit of his surviving spouse, personal
representatives or designees or other legal representatives, as the
case may be. The Company and any successor to its business and/or
assets shall remain liable to Executive hereunder.
21) LEGAL EXPENSES. The Company shall pay directly or reimburse the
Executive (at the Executive's option) for any and all legal fees and
expenses incurred by the Executive relating to the enforcement or the
attempted enforcement, of any obligation of the Company hereunder,
regardless of outcome, provided that the Executive's claims in such
regard are not determined by a trier of fact to be frivolous.
4. CONTINUATION OF EMPLOYMENT AGREEMENT. Except as specifically amended
herein, the Employment Agreement remains in full force and effect and the
parties agree to be bound thereby. To the extent there is any conflict between
the terms of Sections 14 through 21 herein and the remainder of the Agreement,
the terms of Sections 14 through 21 shall govern.
This Agreement is executed as of the date set forth in the opening
paragraph.
IN WITNESS WHEREOF, the parties have executed these presents as of the day
and year first above written.
AAVID THERMAL TECHNOLOGIES, INC. EXECUTIVE
By s/s Xxxxxx X. Xxxxxxx s/s Xxxxxxx X. Xxxxxx
---------------------------------- ------------------------------------
Name Xxxxxx X. Xxxxxxx Name Xxxxxxx X. Xxxxxx
-------------------------------- -------------------------------
Title Chief Executive Officer Title Chief Financial Officer
------------------------------- -------------------------------
-3-