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EXHIBIT 10.19
THIRD AMENDMENT TO
EXECUTIVE DEFERRED COMPENSATION AGREEMENT
WHEREAS, Xxxx'x International, Inc. (the "Company") and Xxxxx Xxxxxxx
(the "Executive") entered into an executive deferred compensation agreement in
February 1997 (the "Revised Agreement") which superseded a series of prior
deferred compensation agreements (the "Prior Agreements") pursuant to which the
Executive elected to defer certain portions of his compensation from the
Company; and
WHEREAS, the Company and the Executive amended the Revised Agreement on
December 1, 1997 (the "First Amendment"); and
WHEREAS, the Company and the Executive amended the Revised Agreement on
February 26, 1998 (the "Second Amendment"); and
WHEREAS, the Company and the Executive desire to amend the Revised
Agreement again to reflect their agreement with respect to the contribution and
investment of amounts deferred by Executive; and
WHEREAS, the Executive has no ability at the present time to demand
payment of any amounts pursuant to the Revised Agreement or any Amendment
thereto; and
WHEREAS, the Company believes that the adoption of this Amendment is in
the best interests of the Company;
NOW, THEREFORE, it is hereby declared as follows:
1. Section 1 of the Revised Agreement is amended to read in its entirety
as follows:
"1. AMOUNT OF DEFERRALS.
The Deferrals under this Agreement shall consist of (i)
$1,465,141.26 representing the sum of Executive's compensation deferrals
under the Prior Agreements, plus interest thereon through December 31, 1996,
(ii) any compensation deferred by Executive for services rendered after
December 31, 1996 but before the Effective Date (as hereafter defined) plus
interest thereon pursuant to the terms of this Agreement, (iii) amounts
deferred by Executive after the Effective Date and (iv) gains or losses from
Executive's allocation of Deferrals to investments as of and after the
Effective Date pursuant to the provisions of Section 2."
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2. Section 2 of the Revised Agreement is amended to read in its entirety
as follows:
"2. INVESTMENT OF DEFERRALS.
(a) Executive's Deferrals made prior to the Effective Date shall
bear interest at the lesser of (i) the rate of 15% per annum, or (ii) the
prime rate as quoted by Bank of America, NT&SA on the last business day of
each calendar quarter, as follows:
(1) The Deferrals made prior to January 1, 1997 shall bear
interest from January 1, 1997 to the Effective Date; and
(2) Any Deferrals made after December 31, 1996 but before
the Effective Date of this Agreement shall bear interest from the date
the deferral is credited to the account of Executive through the
Effective Date.
(b) On or about the Effective Date, Company shall calculate the
value of all then existing Deferrals and interest accrued thereon (the
"Effective Date Account Balance"). Executive shall allocate the full amount
of the Effective Date Account Balance among the investment options offered
pursuant to the Fidelity Corporate plan for Retirement Select Plan (the
"Plan"). Executive's account balance as of any future measurement date shall
be the net realizable value of the Effective Date Account Balance and any
subsequent Deferrals plus or minus gains or losses, as of such measurement
date, from investments designated by Executive pursuant to the Plan as
reflected on the statement for such measurement date described in Section
6(b) below (the "Total Deferral Balance")."
3. Section 4 of the Revised Agreement is amended to read in its entirety
as follows:
"4. DISTRIBUTION.
(a) The Total Deferral Balance shall be paid to the
Executive in a single lump sum.
(b) Payment of the Total Deferral Balance shall be made
within ninety (90) days after the later of (i) the occurrence or event
which results in the Executive no longer serving as the Chairman of the
Board of the Company (including, but not limited to, the death,
disability, resignation, retirement, or termination of the Executive),
or (ii) the date of execution of this Agreement.
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(c) In the event that the Executive dies prior to the
payment of the Total Deferral Balance pursuant to the terms of this
Agreement, payment of the remaining amount shall be made at the time and
in the form set forth above to the Executive's spouse (as of his date of
death, if she is then living). If the Executive has no living spouse at
such time, payment shall be made at the time and in the manner set forth
above to the Executive's estate."
4. Section 6 of the Revised Agreement is amended to read in its entirety
as follows:
6. "STATEMENTS.
(a) Prior to the Effective Date, Company shall furnish
Executive (or, in the event of the Executive's death, his spouse or
estate) a statement with respect to his Deferrals on a quarterly basis
as of each March 31, June 30, September 30 and December 31. Such
statement shall set forth the balance of the Deferrals held by the
Company for the Executive's account for the quarter then ending, and any
interest credited or payments made with respect to such Deferrals during
that quarter.
(b) After the Effective Date, Company shall furnish
Executive with such statements of Executive's Total Deferral Balance as
of periodic measurement dates as may be provided pursuant to the Plan.
Such statements shall be presumed to be correct and complete."
5. Section 7 of the Revised Agreement is amended to read in its entirety
as follows:
7. "GENERAL CREDITOR.
(a) Prior to the Effective Date, Executive and his
beneficiaries (including his spouse and his estate), heirs, successors,
and assigns shall have no legal or equitable rights, claims, or interest
in any specific property or assets of the Company. No assets of the
Company shall be held under any trust, or held in any way as collateral
security for the fulfilling of the obligations of the Company under this
Plan. Any and all of the Company's assets shall be, and remain, the
general unpledged, unrestricted assets of the Company. Company's
obligation under this Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay money in the future, and the
rights of the Executive and his beneficiaries shall be no greater than
those of unsecured general creditors.
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(b) As of the Effective Date, Company agrees to fund an
irrevocable rabbi trust for the benefit of Executive and other Plan
participants, if any (the "Trust"), with Fidelity Management Trust
Company acting as Trustee of the Trust pursuant to the Plan. The Trust
shall be funded by the Company within ninety (90) days of the Effective
Date in an amount equal to the Effective Date Account Balance. The
Trustee of the Trust shall invest the amount of the Effective Date
Account Balance as designated by Executive pursuant to Section 2. The
Trust shall provide that the assets in the Trust are held for the sole
purpose of paying amounts due to Plan participants, subject only to the
general creditors of the Company should the Company become bankrupt or
insolvent. In the event of bankruptcy or insolvency, Executive (or his
spouse or estate) and other Plan participants, if any, shall have no
greater right with respect to the Trust assets than that of a general,
unsecured creditor of the Company."
6. Except as expressly amended in this Third Amendment, the provisions
of the Revised Agreement, as amended by the First Amendment and the Second
Amendment, shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
the County of Orange, California as of the 6th day of January, 1999 (the
"Effective Date").
XXXX'X INTERNATIONAL, INC.
By: Xxxxxxx X. Xxxxxxxxx
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Its: Vice President-Finance
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XXXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
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