AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
Exhibit 10.4
AMENDMENT NO. 2
TO
This AMENDMENT NO. 2 (this “Amendment”) to the Employment Agreement dated as of September 30,
2003, as amended by Amendment No. 1 to the Employment Agreement dated January 16, 2007 (the
“Employment Agreement”) by and between Xxxx Xxxxxx (the “Employee”) and Eagle Test Systems, Inc., a
Delaware corporation (the “Company”), is entered into as of this 29th day of July, 2008, by and
between the Employee and the Company.
W I
T N E S S E T H:
WHEREAS, the Company desires to continue the employment of the Employee and the Employee
desires to continue employment with the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the
parties hereto agree as follows:
1. All capitalized terms used but not defined herein shall have the meanings ascribed thereto
in the Employment Agreement.
2. Section 6(c) of the Employment Agreement is hereby deleted and replaced in its entirety by
the following:
(c) Termination by Employee for Good Reason. Subject to the payment
of Termination Benefits pursuant to Section 6(e) below, Employee’s employment
under this Agreement also may be terminated by Employee for “Good Reason” (as
defined below); notwithstanding the foregoing, Employee shall not have Good Reason
to terminate his employment hereunder unless Employee has complied with the “Good
Reason Process” (as defined below). For purposes of this Agreement, “Good Reason”
shall mean the occurrence of any of the following events: (i) a substantial
adverse change in the nature or scope of the Employee’s responsibilities,
authorities, powers, functions or duties under this Agreement; (ii) a reduction in
the Employee’s annual base salary except for an across-the-board salary reduction
similarly affecting all or substantially all management employees; or (iii) the
relocation of the offices at which the Employee is principally employed to a
location more than seventy (75) miles from such offices. For purposes of this
Agreement, “Good Reason Process” shall mean that (i) Employee reasonably
determines in good faith that a “Good Reason” condition has occurred; (ii)
Employee notifies the Company in writing of the occurrence of the Good Reason
condition within 60 days of such occurrence; (iii) Employee cooperates in good
faith with the Company’s efforts, for a
period not less than 30 days following such notice (the “Cure Period”), to remedy
the Good Reason condition; (iv) notwithstanding such efforts, the Good Reason
condition continues to exist; and (v) Employee terminates his employment within 60
days after the end of the Cure Period. If the Company cures the Good Reason
condition during the Cure Period, Good Reason shall be deemed not to have
occurred.
3. Section 6(e)(i) of the Employment Agreement is hereby deleted and replaced in its entirety
by the following:
(i) continuation of salary at a rate equal to fifty percent (50%) of
Employee’s Base Salary as in effect on the date of termination for a period of two
(2) years from the date of termination (payment shall be subject to withholding
under applicable law and shall be made in periodic installments in accordance with
the Company’s usual practice for executive officers of the Company as in effect
from time to time), beginning on the first regular payroll date following the
effective date of the “Release” (as defined below); and
4. The last paragraph of Section 6(e) of the Employment Agreement is hereby deleted and
replaced in its entirety by the following:
The Company shall have the right to terminate all of Termination Benefits set
forth in (i) and (ii) in the event that Employee fails to comply with Employee’s
Continuing Obligations under this Agreement. The Company’s liability for Base
Salary continuation pursuant to Section 6(e)(i) shall be reduced by the amount of
any severance pay due or otherwise paid to Employee pursuant to any severance pay
plan or stay bonus plan of the Company. Notwithstanding the foregoing, nothing in
this Section 6(e) shall be construed to affect Employee’s right to receive COBRA
continuation entirely at Employee’s own cost to the extent that Employee may
continue to be entitled to COBRA continuation after Employee’s right to cost
sharing under Section 6(e)(ii) ceases. The Company and Employee agree that the
Termination Benefits paid by the Company to Employee under this Section 6(e) shall
be in full satisfaction, compromise and release of any claims arising out of any
termination of Employee’s employment pursuant to Section 6(d), and that the
payment of the Termination Benefits shall be contingent upon Employee’s delivery
of a general release of any and all claims (other than those claims arising under
this Agreement) upon termination of employment in a form reasonably satisfactory
to the Company (the “Release”), it being understood that no Termination Benefits
shall be provided unless and until Employee executes and delivers the Release no
later than 45 days following the date Employee’s employment terminates and does
not revoke the Release during the seven-day revocation period.
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5. The Agreement is hereby amended by inserting the following section as a new Section 14 at
the end thereof:
14. Section 409A. Notwithstanding anything in this Agreement to the
contrary, if at the time of Employee’s separation from service (a “Separation from
Service”) within the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), the Company determines that Employee is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any
payment or benefit that Employee becomes entitled to under this Agreement would be
considered deferred compensation subject to the 20 percent additional tax imposed
pursuant to Section 409A(a) of the Code as a result of the application of Section
409A(a)(2)(B)(i) of the Code, then no such payment shall be payable or benefit
shall be provided prior to the date that is the earlier of (A) six months and one
day after Employee’s Separation from Service, or (B) Employee’s death, and the
initial payment thereof following such period shall include a lump sum “catch-up”
payment equal to those payments that would otherwise have been paid during the
six-month period, but for the application of this provision, plus interest at an
annual rate equal to the applicable federal short term rate published by the
Internal Revenue Service for the month in which the Separation from Service
occurs, from such date of Separation from Service until payment. Any subsequent
installment payments shall be made in accordance with Section 6 above. The
parties intend that this Agreement will be administered in accordance with Section
409A of the Code. The parties agree that this Agreement may be amended, as
reasonably requested by either party, and as may be necessary to fully comply with
Section 409A of the Code and all related rules and regulations in order to
preserve the payments and benefits provided hereunder without additional cost to
either party. The Company makes no representation or warranty and shall have no
liability to Employee or any other person if any provisions of this Agreement are
determined to constitute deferred compensation subject to Section 409A but do not
satisfy an exemption from, or the conditions of, such section.
6. Except as set forth in this Amendment, all terms and provisions of the Employment Agreement
shall remain in full force and effect in accordance with the terms thereof.
7. This Amendment shall be construed and enforced in accordance with the laws of the State of
Illinois.
8. This Amendment may be executed in any number of counterparts, each of which shall be deemed
an original, but all of which shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Amendment under seal as of the date first
set forth above.
| COMPANY: |
||||
| By: | ||||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Chief Executive Officer | |||
| EMPLOYEE: | ||||
| Xxxx Xxxxxx |
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