EXHIBIT 10.46
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
Agreement (this "Agreement"), dated as of August 1, 2001, between
Boron, XxXxxx & Associates, Inc., a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxxx (the "Employee").
WITNESSETH
WHEREAS, the Company and the Employee are parties to an Employment
Agreement dated as of October 1, 1999 (the "Employment Agreement");
WHEREAS, capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings set forth in the Employment Agreement; and
WHEREAS, the Company and the Employee hereby desire to amend certain terms
of the Employment Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Employee hereby
agree as follows:
Section 1. Section 6(e) is hereby amended by adding the following language
after the words "change of control" at the end of the second sentence and before
the word "Notwithstanding" at the beginning of the third sentence: "In addition
to any other benefits to which Employee may be entitled in accordance with the
Company's then existing severance policies, the Company shall, for a period of
eighteen (18) months commencing upon the termination of the Employee, continue
to provide family medical and dental insurance coverage to Employee, Employee's
spouse and Employee's dependents, on the same terms and conditions as though
Employee had remained employed. In the event Employee's participation in any
medical or dental insurance plan is barred, the Company shall arrange to provide
Employee with benefits substantially equivalent to those which Employee would
otherwise have received had his participation not been barred."
Section 2. The language currently existing as Section 10 "Assignability; Change
of Control" is hereby amended by making such language Section 10(a). The
following is to be inserted immediately following said Section 10(a) and before
Section 11:
(a) Gross-Up Payments.
(i) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any compensation, payment or distribution by
the Company to or for the benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, other than amounts payable solely under Section 4(b), but
including amounts paid under Sections 6 or 10 calculated with reference to
Section 4(b), (the "Severance Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code, or any interest or penalties are incurred
by the Employee with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Employee shall be entitled to receive an additional
payment (a "Gross-Up Payment") such that the net amount retained by the
Employee, after deduction of any Excise Tax on the Severance Payments, any
Federal, state, and local income tax, employment tax and Excise Tax upon the
payment provided by this subsection, and any interest and/or penalties assessed
with respect to such Excise Tax, shall be equal to the Severance Payments.
(ii) Subject to the provisions of Subparagraph 10(b)(iii), all
determinations required to be made under this Subparagraph 10(b), including
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by Xxxxxx Xxxxxxxx LLP or any other nationally recognized
accounting firm selected by the Company (the "Accounting Firm"), which shall
provide detailed supporting calculations both to the Company and the Employee
within fifteen (15) business days of the date of the Employee's termination, if
applicable, or at such earlier time as is reasonably requested by the Company or
the Employee. For purposes of determining the amount of the Gross-Up Payment,
the Employee shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation applicable to individuals for the calendar year
in which the Gross-Up Payment is to be made, and state and local income taxes at
the highest marginal rates of individual taxation in the state and locality of
the Employee's residence on the date of the Employee's termination, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. The initial Gross-Up Payment, if any, as
determined pursuant to this Subparagraph 10(b)(ii), shall be paid to the
applicable tax authorities on behalf of the Employee within five (5) days of the
receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Employee, the Company shall
furnish the Employee with an opinion of counsel that failure to report the
Excise Tax on the Employee's applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon the Company and the Employee. As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (an "Underpayment"). In the event that the Company
exhausts its remedies pursuant to Subparagraph 10(b)(iii) and the Employee
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred, consistent
with the calculations required to be made hereunder, and any such Underpayment,
and any interest and penalties imposed on the Underpayment and required to be
paid by the Employee in connection with the proceedings described in
Subparagraph 10(b)(iii), shall be promptly paid by the Company to or for the
benefit of the Employee.
(iii) The Employee shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Employee knows of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Employee shall not pay
such claim prior to the expiration of the thirty (30) day period following the
date on
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which he gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Employee in writing prior to the expiration of such period
that it desires to contest such claim, provided that the Company has set aside
adequate reserves to cover the Underpayment and any interest and penalties
thereon that may accrue, the Employee shall:
(A) give the Company any information reasonably requested by the
Company relating to such claim,
(B) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company,
(C) cooperate with the Company in good faith in order effectively
to contest such claim, and
(D) permit the Company to participate in any proceedings relating
to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify
and hold the Employee harmless, on an after-tax basis, for any Excise
Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing provisions of
this Subparagraph 10(b)(iii), the Company shall control all proceedings
taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the Employee to pay
the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs
the Employee to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Employee on an interest-free
basis and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Employee with
respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Employee shall be entitled
to settle or contest, as the case may be, any other issues raised by
the Internal Revenue Service or any other taxing authority.
(iv) If, after the receipt by the Employee of an amount advanced by the
Company pursuant to Subparagraph 10(b)(iii), the Employee becomes entitled to
receive any
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refund with respect to such claim, the Employee shall (subject to the Company's
complying with the requirements of Subparagraph 10(b)(iii)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Employee
of an amount advanced by the Company pursuant to Subparagraph 10(b)(iii), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and the Company does not notify the Employee in writing of
its intent to contest such denial of refund prior to the expiration of thirty
(30) days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
Section 3. Except as expressly provided for in this Agreement, all
other provisions of the Employment Agreement shall be unaffected by this
Agreement and shall remain in full force and effect. By execution of this
Agreement, the Company shall not be deemed to have compromised or waived any of
its rights under the Employment Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and attested, all as of the day and
year first above written.
BORON, XxXXXX & ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: CFO
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxx
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