April 15, 1998
Xx. Xxxxxx X. Xxxx
President and Chief Operation Officer
0000 00xx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Re: Revisions to Employment Agreement
Dear Xx. Xxxx:
This letter will amend certain terms relating to your employment
by Xxxx Pacific Shipyards Corporation ("Xxxx") set forth in the
Employment Agreement dated December 27, 1994 between Xxxx and you
("Employment Agreement"). Those terms set forth in the
Employment Agreement not modified herein shall remain the same.
1. Commencing December 22, 1997 your base annual salary shall be
$140,000 ("Base Salary"). Your salary will be reviewed annually
by Xxxx'x Board of Directors, commencing December 1998.
2. You are eligible to receive a cash bonus on July 1, 1998 in
an amount equal to a certain percentage of your Base Salary
("Applicable Percentage") which amount shall not be less than
twenty percent (20%) and not more than fifty percent (50%)
determined in accordance with the schedule set forth below:
If the pre-tax profit of Xxxx Pacific Then the
Applicable Percentage
Shipyards Corporation for the fiscal year of your Base
Salary shall be:
ending March 31, 1998 is between:
$0 - $200,000 20%
200,000 - 400,000 23%
400,000 - 600,000 26%
600,000 - 800,000 29%
800,000 - 1,000,000 32%
1,000,000 - 1,200,000 35%
1,200,000 - 1,400,000 38%
1,400,000 - 1,600,000 41%
1,600,000 - 1,800,000 44%
1,800,000 - 2,000,000 47%
Above 2,000,000 50%
The "pre-tax profit" to be used in calculating the Applicable
Percentage shall include appropriately accrued expenses for cash
bonuses and other incentive compensation. In order to qualify
for the cash bonus, it will be necessary to be a full-time
employee of Xxxx on the last day of the fiscal year.
3. You will be granted additional stock options, effective as of
December 16, 1997. The options are for the purchase of Fifteen
Thousand (15,000) shares of Xxxx Xxxxx at an exercise price equal
to 4 3/8 Dollars ($4.375) per share (the average price quoted for
the shares on the date of grant). You will become vested in one-
third of the options on December 16, 1998, an additional one-
third on December 16, 1999 and the balance on December 16, 2000.
The options shall expire on December 16, 2002. Additional
documents will be required to be executed in connection with the
issuance of the options.
If the terms of this amendment to your Employment Agreement are
acceptable to you, please indicate by signing below.
Very truly yours,
XXXX PACIFIC SHIPYARDS CORPORATION
By:
Xxxxxxx X. Xxxxx
Chief Executive Officer
Accepted and agreed to:
Xxxxxx X. Xxxx
Date:
