Exhibit 10(bb)
AMENDMENT NO. 2 TO
EMPLOYMENT AGREEMENT
OF
XXXXXXX X. XXXXXX, III
THIS AMENDMENT No. 2 made and entered into as of the 19th day of
August, 2002 by and between XXXXXX INTERNATIONAL, INC. (the "Company") and
XXXXXXX X. XXXXXX, III ("Executive");
W I T N E S S E T H:
WHEREAS, the Company and Executive entered into an Employment
Agreement, dated as of April 18, 1999, which Agreement became effective on
August 19, 1999, and which Agreement has previously been amended as of February
14, 2002 (the Agreement as amended is hereinafter referred to as the "Employment
Agreement"); and
WHEREAS, the parties now desire to amend the Employment Agreement to
provide for Executive's relocation to Portland, Oregon and to reflect certain
changes in Executive's compensation and benefits as hereinafter provided;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein and in the Employment
Agreement, the parties hereby agree to amend the Employment Agreement as
follows:
1.
Section 2(a) is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"(a) Subject to the terms and conditions of this Agreement,
the Company hereby employs Executive, and Executive hereby accepts
employment, as Senior Vice President, General Counsel and Secretary of
the Company and shall have such responsibilities, duties and authority
that are consistent with such position as may from time to time be
assigned to Executive by the Board. Executive hereby agrees that
during the Term of this Agreement he will devote substantially all his
working time, attention and energies to the diligent performance of
his duties as Senior Vice President, General Counsel and Secretary of
the Company. With the consent of the Board of Directors, the Executive
may serve as a director on the boards of directors or trustees of
additional companies and organizations."
2.
Section 3(a) is hereby amended by adding the following at the end of
the first sentence of the present section:
"; commencing August 15, 2002, Executive's Base Salary shall be Three
Hundred Thousand Dollars ($300,000.00), prorated for any partial year
of employment."
3.
Section 3(b) is hereby amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"Executive shall be eligible to participate in the Executive
Management Annual Incentive Plan and such other annual incentive plans
as may be established by the Company from time to time for its
executive officers. The Board, a committee of the Board, or the Chief
Executive Officer will establish goals each year under the incentive
plans, and Executive's annual Target Bonus shall be 50% of Base
Salary; the maximum award for exceeding the performance goals (which
will be determined in accordance with the current plan design) shall
be 100% of Base Salary. For the Company's fiscal years ending December
31, 2002 and 2003 and for each fiscal year ending thereafter unless
Executive and the Company mutually agree otherwise, Executive's annual
bonus shall be calculated on the same basis as executives of the
Company's Oregon Cutting Systems Division (i.e., Executive's bonus
will be calculated based upon Oregon Cutting Systems Division's
attainment of goals and will not be decreased because of the
performance of the other operating units). The annual incentive bonus
payable under this subsection (b) shall be payable as a lump sum at
the time bonuses are paid to other senior executives after
certification by the Compensation Committee of the Board that the
applicable performance objectives have been met, unless Executive
elects to defer all or a portion of such amount pursuant to any
deferral plan established by the Company for such purpose."
4.
Section 3(d) is hereby amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(d) SERP AND INDIVIDUAL SERP - On or about August 15, 2002, Executive
shall be paid in a lump sum a 100% vested benefit under the Xxxxxx,
Inc., and Subsidiaries Supplemental Retirement Benefit Plan ("SERP")
and the Xxxxxx International, Inc. Supplemental Executive Retirement
Plan for Xxxxxxx X. Xxxxxx, III ("Individual SERP"). As of August 1,
2002, Executive shall be treated under the SERP and the Individual
SERP as if his employment had terminated, as if he had earned two (2)
additional years of benefit service, and as if he were two (2) years
older. Executive shall be paid his benefits under the SERP and the
Individual SERP in a lump sum in the following amounts: SERP -
$194,077.23; Individual SERP $310,374.00, for a total payment of
$504,451.23. The lump sum payments to Executive shall be made on
August 15, 2002, or as soon as possible thereafter, but in no event
after August 31, 2002. Following the making of such payments, the
Company shall have no further obligations to Executive in respect of
the SERP or the Individual SERP, except that commencing August 1,
2004, Executive shall again be eligible to participate in the SERP.
When Executive recommences
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participation in the SERP, any benefit to which Executive thereafter
becomes entitled under the SERP will be calculated using his total
years of benefit service and will be reduced in an equitable manner by
the SERP benefit (but not the Individual SERP benefit) previously paid
to Executive pursuant to this Section 3(d)."
5.
Section 3(e) is hereby amended by adding a new sentence to the end of
such section as follows:
"Except as provided in Section 3(d) with respect to the SERP,
Executive shall continue to participate in, or receive benefits under,
each "employee benefit plan" (as defined in Section 3(3) of ERISA) or
employee benefit arrangement in which Executive was participating on
July 31, 2002, including, without, limitation, plans providing
retirement, 401(k) benefits, deferred compensation, health care
(including Exec-U-Care), life insurance, disability, and similar
benefits; and Executive shall be entitled to participate in, or
receive benefits under, any such plans or arrangements made generally
available by the Company to its executive officers."
6.
Section 3(f) is hereby amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(f) The Company will reimburse Executive for membership dues and
assessments at recreational and social clubs in Montgomery, Alabama
for the period prior to December 31, 2002, if submitted to and
approved by the Chief Executive Officer of the Company. Executive will
be provided an automobile in accordance with the Company's automobile
policy for executives, and the Company will pay all insurance,
maintenance, fuel, oil and related operational expenses for such
automobile. Executive will be entitled to four weeks vacation during
2002, which amount will be subject to increase during the Term in
accordance with Company policy. Executive will be provided an annual
physical examination and a financial/tax consultant for personal
financial and tax planning. Executive will be promptly reimbursed by
the Company for all reasonable business expenses he incurs in carrying
out his duties and responsibilities under this Agreement."
7.
Section 3 is hereby amended by adding a new Section 3(i) as follows:
"(i) Executive has agreed to relocate to the Portland, Oregon area on
or about August 19, 2002. Executive will be reimbursed for all
expenses associated with the relocation of Executive and his family to
Portland, Oregon and will be entitled to full relocation benefits in
accordance with the Company's executive moving policy. In addition,
Executive will be paid a tax gross-up amount by the Company to cover
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any additional federal or state income taxes he incurs as a result of
the payment or reimbursement of such moving expenses."
8.
Section 5.1(c) is hereby amended by adding the following to the end of
the present section:
"Executive and his dependents shall be eligible to receive
coverage under the Company's retiree healthcare program commencing at
the end of the Severance Period. The level of coverage and costs under
the retiree healthcare program for Executive and his dependents will
be the same coverage and costs provided under the Company's retiree
healthcare program on Executive's Date of Termination and such retiree
healthcare coverage shall be 100% vested and shall not be terminated
in the future (regardless of any termination of such coverage that may
occur that affects other executives). The Executive's retiree
healthcare program shall terminate upon the later of: (i) the death of
the Executive and (ii) the death of his spouse.
9.
Section 5.1(d) is hereby amended by adding the following after the
second sentence of such section:
"With respect to the SERP, if Executive's employment is terminated
before August 1, 2004, Executive's participation in the SERP shall be
deemed to commence August 1, 2004 and to continue for the remainder of
the Severance Period."
10.
Section 5.1(f) is hereby amended by deleting such section in its
entirety and substituting the following in lieu thereof:
"(f) SERP. On his date of termination, Executive shall be treated for
purposes of determining his benefit under the SERP as if he had earned
additional years of benefit service equal to the length of the
Severance Period (or, if shorter, the length of time from Executive's
recommencement of participation in the SERP on August 1, 2004 to the
end of the Severance Period), and as if he had attained the age he
would be at the end of the Severance Period."
11.
Sections 6.7(i), (ii) and (iii) are hereby amended by deleting such
sections in their entirety and substituting the following in lieu thereof:
"(i) the assignment to Executive of any duties inconsistent with
Executive's status as Senior Vice President, General Counsel and
Secretary of the Company, or a substantial
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adverse alteration in the nature or status of Executive's
responsibilities from those on the date hereof;
(ii) except as otherwise provided for in Section 3(a), a reduction in
Executive's Base Salary as in effect on the date hereof or as the same
may be increased from time to time;
(iii) the relocation of the Company's principal executive offices to a
location more than fifty (50) miles from Portland, Oregon, or the
Company's requiring Executive to be based anywhere other than the
Company's principal executive offices, except for reasonably required
travel on the Company's business."
12.
This Amendment No. 2 to the Employment Agreement shall be effective on
August 15, 2002, except where otherwise noted. Except as hereby modified, the
Employment Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 2
as of the day and year first written above.
XXXXXX INTERNATIONAL, INC.
By:
---------------------------------
EXECUTIVE
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Xxxxxxx X. Xxxxxx, III
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