EXHIBIT 10.2
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement is dated as of September 9, 2006
(this "Amendment") by and between Xxxxxxx Company, a Michigan corporation (the
"Company"), and Xxxxx X. Xxxxxxx (the "Executive").
WHEREAS the Company and the Executive are parties to that certain
Employment Agreement dated as of April 19, 2000 and as amended pursuant to an
Amendment to Employment Agreement dated as of June 30, 2005 (the "Employment
Agreement"), which provides, among other things, that the Company agrees to
employ the Executive, subject to certain terms and conditions, as its President
and Chief Executive Officer for a period ending on December 31, 2006 unless
otherwise extended pursuant to the Employment Agreement; and
WHEREAS the Company and the Executive wish to further amend the Employment
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants, promises and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged,
the parties agree as follows:
1. AMENDMENTS.
(a) Effective as of October 9, 2006, the phrase "President and Chief
Executive Officer" as used in Sections 1(a), 1(c) and 3(d) of the
Employment Agreement is deleted and replaced with "Executive
Chairman".
(b) Effective as of October 9, 2006, the Section 1(b) of the
Employment Agreement is deleted in its entirety and replaced by the
following:
(b) During the Agreement Term, while the Executive is employed by
the Company, the Executive shall devote significant time
(reasonable sick leave and vacations excepted) and his best
efforts, energies and talents to fulfilling his executive
responsibilities to the Company. The Executive shall serve as
Executive Chairman and shall perform such services for the
Company and its Affiliates as the Board deems appropriate,
including continued management responsibilities, facilitating a
successful transition to a new Chief Executive Officer and
promoting the interests of the Company.
(c) Section 1(f) of the Employment Agreement is deleted in its
entirety and replaced by the following:
The "Agreement Term" shall be the period beginning on April 1,
2006 and ending on March 31, 2007.
(d) Section 2(b) of the Employment Agreement is amended by adding a
sentence to the end to read as follows:
The Executive shall receive a pro rata bonus for the fiscal year
ending June 30, 2007, based on Company performance as determined
under the MIB. The pro rata bonus will be the bonus calculated
under the MIB, multiplied
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by a fraction, the numerator of which is the number of days on
which the Executive is employed by the Company during the fiscal
year and the denominator of which is 365. Payment shall be made
within 60 days after the end of the fiscal year.
(e) Effective as of October 9, 2006, the phrase "Chief Executive
Officer" in Section 2(h) of the Employment Agreement is deleted and
replaced with "Executive Chairman".
(f) The second sentence of the last paragraph of Section 2(e) of the
Employment Agreement, as previously amended, is deleted in its
entirety and replaced by the following:
The monetary values of the awards for fiscal years 2006 and 2007
shall be $1,645,500 and $1,560,000, respectively.
(g) The last sentence of paragraph 1(f) of the Amendment dated as of
June 30, 2005 is hereby deleted.
(h) Section 2 of the Employment Agreement is amended to include a new
Section 2(j) as follows:
(j) Vesting and Exercise. If Executive remains employed with the
Company through the Agreement Term, all of the Executive's
unvested, previously granted stock options and service-based
restricted stock will become fully vested as of the end of the
Agreement Term. If the Executive remains employed with the
Company through the Agreement Term, all outstanding
performance-based restricted stock will continue to vest
consistent with the award agreement, as if the Executive had
remained an employee of the Company. All of the Executive's
outstanding vested stock options (including options that vest
pursuant to this paragraph (j)) may be exercised until the later
of (i) December 31 of the calendar year in which the options
would otherwise have expired according to their terms as of the
original grant date or (ii) the fifteenth day of the third month
following the date on which the options would otherwise have
expired according to their terms as of the original grant date;
provided that in no event may an option be exercised after the
end of its stated term. The parties intend that the extension of
the exercise period for outstanding options shall comply with the
requirements of section 409A of the Internal Revenue Code of
1986, as amended (the "Code"). If final regulations issued under
section 409A allow an extension of the exercise period for a
period longer than that set forth above, the parties agree to
amend this Agreement to allow the options to be exercised during
the maximum period allowed by section 409A.
(i) The Employment Agreement is amended by adding a new Section 17 to
read as follows:
17. Section 409A. This Agreement is intended to comply with
section 409A of the Code and its corresponding regulations, to
the extent
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applicable. Any payments under Section 4 that are subject to
section 409A shall be paid only upon an event and in a manner
permitted by section 409A. If the Executive is considered a "Key
Employee" (as defined below) and if any payments under Section 4
upon termination of employment are required to be delayed for a
period of six months in order to comply with section 409A of the
Code, the payments shall be postponed for the required six-month
period under section 409A. At the end of the six-month period,
the accumulated withheld amounts shall be paid in a lump sum
payment within five days after the end of the six month period.
If the Executive dies during such six-month period prior to the
payment of benefits, the accumulated withheld amounts shall be
paid to the personal representative of the Executive's estate
within 60 days after the date of the Executive's death.
The term "Key Employee" shall mean an employee who, at any time
during the 12-month period ending on the identification date
(defined below), is (i) an officer of the Company or an affiliate
(as determined for purposes of section 416(i) of the Code) who
has annual compensation greater than $135,000 (or such other
amount as may be in effect under Section 416(i)(1) of the Code),
(ii) a 5% owner of the Company or (iii) a 1% owner of the Company
who has annual compensation greater than $150,000. The
identification date shall be each December 31, and the
determination of Key Employees as of such identification date
shall apply for the 12-month period following April 1 after the
identification date. The determination of Key Employees,
including the number and identity of persons considered officers,
shall be made by the Company in accordance with the provisions of
Sections 416(i) and 409A of the Code and the regulations issued
thereunder.
2. EFFECT OF AMENDMENTS. Except to the extent expressly amended hereby, the
Employment Agreement shall remain in full force and effect in all respects.
3. APPLICABLE LAW. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan, without
giving effect to any choice of law or conflict of law provision or rule
that would cause the application of the laws of any other jurisdiction.
4. COUNTERPARTS. This Amendment may be executed in one or more counterparts
(including counterparts executed and delivered by facsimile, which shall be
as counterparts executed and delivered manually), all of which shall be
considered one and the same agreement and shall become effective when one
or more counterparts have been signed by each of the parties and delivered
to the other party, it being understood that all parties need not sign the
same counterpart.
IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto
as of the day and year first written above.
XXXXXXX COMPANY
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By: /s/ Xxxx X. Xxxxxx, Xx.
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Name: Xxxx X. Xxxxxx, Xx.
Title: Compensation Committee Chair
XXXXX X. XXXXXXX
By: /s/ Xxxxx X. Xxxxxxx
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