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EXHIBIT 10.22
SECOND AMENDMENT
TO
CHANGE OF CONTROL
EMPLOYMENT AGREEMENT
THIS AGREEMENT is between DISCOUNT AUTO PARTS, INC., a Florida
corporation (the "Company"), and C. XXXXXXX XXXXX, residing at _________,
________, __________ (the "Executive") and is dated as of the 3rd day of July,
2001.
WITNESSETH:
WHEREAS, the parties hereto have entered into that certain Change of
Control Employment Agreement dated as of January 17, 2000 by and between the
Company and the Executive, as amended by First Amendment dated as of March 17,
2001 (collectively, the "Change of Control Employment Agreement"); and
WHEREAS, the Company and the Executive have agreed to further amend the
terms of the Change of Control Employment Agreement in certain respects as set
forth in this Second Amendment to Employment Agreement (the "Amendment").
NOW, THEREFORE, in consideration of the above premises and mutual
agreements herein set forth and the services performed and to be performed by
the Executive for the Company, the parties agree as follows:
1. Payment of Excise Taxes.
Section 12 of the Change of Control Employment Agreement shall
be renumbered as Section 13 and the following shall be added instead as Section
12 of the Change of Control Employment Agreement:
12. Payment of Amounts to Address Excise Taxes.
(a) Payment of Amounts to Address Excise Taxes. If the Executive
is to receive any compensation under this Agreement upon or after a termination
of employment (such compensation to be received hereunder being referred to as
the "Covered Payments"), the Executive shall be entitled to receive the amount
described below to the extent applicable: If any Covered Payments or any amounts
received, considered received or to be received by the Executive under or
arising out of another plan or agreement as a direct or indirect result of or in
connection with a Change of Control or in connection with a termination of
employment from whatever source, including, without
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limitation, amounts received, considered received or to be received with respect
to stock options granted to the Executive by the Company or any portion of the
sum thereof (collectively, the "Payments") are subject to the excise tax imposed
by Section 4999 of the Internal Revenue Code of 1986 (as amended from time to
time, the "Code"), or any successor or similar provision of the Code or other
statute, rule or regulation of similar effect (the "Excise Tax"), the Company
shall pay the Executive an additional cash amount (the "Gross Up Payment") such
that the net amount actually retained by the Executive after deduction of any
Excise Tax on the Payments (and other state or federal income tax, Excise Tax
and employment taxes on any amounts paid as Gross Up Payment under this Section
12) shall be equal to the gross amount of the Payments. For purposes of
determining whether any of the Payments will be subject to the Excise Tax and
the amount of such Excise Tax, the following shall apply:
(i) all "excess parachute payments" within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to the
Excise Tax, unless, in the opinion of tax counsel selected by the
Company's independent auditors and acceptable to the Executive, such
other payments or benefits (in whole or in part) described in clause
(a) above do not constitute parachute payments, or such excess
parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code;
(ii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections 280G(d)(3) and
(4) of the Code; and
(iii) the Executive shall be deemed to pay federal income
taxes, and state and local income taxes in the state and locality of
the Executive's residence on the date of Termination, at the highest
marginal rate of income taxation in effect in the calendar year in
which the Gross Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such
state and local income taxes.
(b) Timing of Gross Up Payment; Certain
Adjustment Payments. The Gross Up Payment, if any, that is due as a
result of such determination shall be paid to the Executive in cash in
a lump sum within thirty (30) days of such computation. Appropriate
adjustments shall be computed Ernst & Young LLP based upon the amount
of the Excise Tax finally determined by the Internal Revenue Service or
a court of law; any additional amount due the Executive as a result of
such adjustment shall be paid to the Executive by the Company in cash
in a lump sum within thirty (30) days of such computation, or if less
than the Gross Up Payment any amount due the Company as a result of
such adjustment shall be paid to the Company by the Executive in cash
in a lump sum within thirty (30) days of such computation. The Company
shall be responsible for and shall pay and shall indemnify the
Executive with respect to (1) any and all fees and costs incurred in
computing the Gross Up Payment (including without limitation the fees
and costs of Ernst & Young LLP), (2) any and all fees and costs
incurred by the Executive in resolving any tax controversy concerning
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the applicability of the Excise Tax or the amount thereof (including
without limitation attorneys fees and accountants' fees) and (3) any
and all fees and costs incurred by the Executive in enforcing the
provisions of this Agreement.
2. Miscellaneous.
Unless specifically modified, added or deleted by this Amendment, all
terms and provisions of the Change of Control Employment Agreement remain in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
WITNESSES:
DISCOUNT AUTO PARTS, INC.
/s/ Xxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
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/s/ Xxxxxx Xxxxxx Xxxxx X. Xxxxxxxx, Chief Executive Officer
--------------------------- "Company"
/s/ Xxxxx Xxxxx By: /s/ C. Xxxxxxx Xxxxx
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/s/ Xxxxxx Xxxxxx C. Xxxxxxx Xxxxx
--------------------------- "Executive"
