FIRST AMENDMENT
TO
AGREEMENT
THIS AGREEMENT (the "First Amendment") is made as of the 11th day of
December, 1998 by PSC INC., a New York corporation ("PSC" or the "Company") and
XXXXXX X. XXXXXXX ("Xxxxxxx").
WHEREAS, PSC and Xxxxxxx entered into a certain agreement on June 2,
1998 (the "Agreement"); and WHEREAS, the parties desire to amend in
certain respects said Agreement. NOW, THEREFORE, in consideration of
the premises and mutual covenants herein contained, the parties agree
as follows: 1. All of the terms used in this First Amendment shall have
the meanings defined in the Agreement. 2. Section 4 of the Agreement is
deleted in its entirety and replaced by a new Section 4, which will
read as follows:
"4. Restricted Stock. Pursuant to the Company's 1994 Stock
Option Plan, on March 25, 1998 PSC awarded Xxxxxxx 17,500
restricted Common Shares of the Company, upon the terms and
conditions and subject to the restrictions set forth in the
Restricted Stock Award Agreement attached hereto as Exhibit A.
If Xxxxxxx is then Chairman of the Board of Directors of the
Company, on each of March 25, 1999 and March 25, 2000, PSC
will award Xxxxxxx 17,500 restricted Common Shares pursuant to
a Restricted Stock Award Agreement similar in form to Exhibit
A, as modified to reflect changes in dates and stock prices.
Notwithstanding the foregoing sentence, if there is a Change
in Control (as hereinafter defined), and if Xxxxxxx becomes
entitled to receive Severance Benefits (as hereinafter
defined), Xxxxxxx will be immediately entitled to receive the
Common Shares which otherwise would have been awarded to him
on March 25, 1999 and/or on March 25, 2000, fully vested and
free of any and all restrictions."
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3. There is added to the Agreement a new Section 14, which will read as
follows:
"14. Change in Control
x. Xxxxxxxxx Payment. If following a Change in
Control (as hereinafter defined) of the Company, Xxxxxxx
ceases to be Chairman of the Board of Directors of the Company
at any time prior to the expiration of the Term of this
Agreement, for any reason other than death or disability, the
Company will pay Xxxxxxx over a period of three years
following such termination of services an amount equal to the
product of Xxxxxxx'x compensation for services at the annual
rate than in effect multiplied by 2.9. Such amount shall be
payable in bi-weekly installments. In addition, Xxxxxxx will
be immediately vested in any restricted stock or option plans
or agreements then in effect.
b. Limitations. Notwithstanding anything in this
Section to the contrary, the maximum amount of cash and other
benefits payable (whether on a current or deferred basis and
whether or not includible in income for income tax purposes)
under this Section (the "Severance Benefits") shall be limited
to the extent necessary to avoid causing any portion of such
Severance Benefits, or any other payment in the nature of
compensation to the Executive, to be treated as a "parachute
payment" within the meaning of Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended. Any adjustment
required to satisfy the limitation described in the preceding
sentence shall be accomplished first by reducing any cash
payments that would otherwise be made to Xxxxxxx and then, if
further reductions are necessary, by adjusting other benefits
as determined by the Company.
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c. Definition of Change in Control. A "Change in
Control" shall be deemed to have occurred (i) on the date that
any person or group deemed a person under Sections 3(a)(9) and
13(d)(3) of the Securities Exchange Act of 1934, other than
the Company, in a transaction or series of transactions, has
become the beneficial owner, directly or indirectly (with
beneficial ownership as determined as provided in Rule 13d-3,
or any successor rule under such Act), of 30% or more of the
outstanding voting securities of the Company; or (ii) on the
date on which one third or more of the members of the Board of
Directors shall consist of persons other than Current
Directors (for these purposes, a "Current Director" shall mean
any member of the Board of Directors elected at or continuing
in office after, the 1998 Annual Meeting of Shareholders, any
successor of a Current Director who has been approved by a
majority of the Current Directors then on the Board, and any
other person who has been approved by a majority of the
Current Directors then on the Board); or (iii) on the date of
approval of (x) the merger or consolidation of the Company
with another corporation where the shareholders of the
Company, immediately prior to the merger or consolidation,
would not beneficially own, immediately after the merger or
consolidation, shares entitling such shareholders to 50% or
more of all votes (without consideration of the rights of any
class of stock to elect directors by a separate class vote) to
which all shareholders of the corporation would be entitled in
the election of directors or where the members of the Board of
Directors of the Company, immediately prior to the merger or
consolidation, would not immediately after the merger or
consolidation, constitute a majority of the Board of Directors
of the corporation issuing cash or securities in the merger or
consolidation or (y) on the date of approval of the sale or
other disposition of all or substantially all the assets of
the Company."
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4. Except as modified by this First Amendment, the Agreement has not
heretofore been amended or cancelled, and remains in full and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to
be executed as of the day and year first above written. PSC Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
