EXHIBIT 10.2
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment ("Amendment") to that Employment Agreement between
Xxxxxx X. Xxxxxxxxx ("Xxxxxxxxx") and Premium Cigars International, Ltd., an
Arizona corporation ("PCI") dated June 13, 1997 ("Original Agreement") is
entered into this 19th day of November, 1997.
RECITALS
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WHEREAS, PCI and Xxxxxxxxx desire that the Original Agreement continue
to govern the employment relationship between them with certain modifications to
ensure a smooth transition in leadership of the Company should Xxxxxxxxx, in the
future, be replaced as President or Chief Executive Officer;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, PCI and Xxxxxxxxx agree as
follows:
1. Scope of Amendment. The terms of this Amendment and all other terms not
inconsistent with this Amendment from the Original Agreement, which is
incorporated herein by this reference, will govern the employment relationship.
If any term of this Amendment conflicts with a term of the Original Agreement,
the terms of this Amendment shall control.
2. Option Grant. Subject to (i) approval by the Board of Directors, the
Independent Directors and X. X. XxXxx Securities, Inc. as Underwriters'
Representative (pursuant to paragraphs 4(m) and (p) of the Underwriting
Agreement dated August 25, 1997) and ratification by shareholders at the
Company's next annual shareholder meeting, (ii) the vesting schedule set forth
below, (iii) the Company's acceptance of an Accredited Investor Representation
Letter from Xx. Xxxxxxxxx and (iv) the Company's and Xxxxxxxxx'x entrance into a
Stock Option Agreement, the Company shall grant to Xxxxxxxxx non-qualified
options to purchase Twenty Thousand (20,000) Shares at the initial public
offering price of $5.25 per Share, exercisable beginning one (1) year after the
date of this Amendment and continuing until five (5) years after such Amendment
date (the "Options"). After such five (5) year period, the Options shall expire.
The Options shall vest as follows:
(i) Options to purchase 10,000 shares for Xxxxxxxxx'x valuable services as
President in conjunction with taking the Company public, during the
Company's early stages as a public Company, shall vest immediately upon the
date that Xxxxxxxxx ceases to be President;
(ii) Options to purchase 10,000 shares for Xxxxxxxxx'x cooperation in a
smooth transition to the next Chief Executive Officer shall vest
immediately upon the date Xxxxxxxxx ceases to be Chief Executive Officer
and does not elect to remain in any executive position in the Company,
provided that the Board of Directors, in its sole discretion, makes a
determination that Xxxxxxxxx has: (a) fully cooperated with the Chief
Executive Officer successor ("Successor"); (b) fully disclosed all
information to his Successor which is necessary to his Successor's
performance as Chief Executive Officer; (c) has exhibited positive support
for his Successor before Company employees, shareholders, market
participants and the general public; and (iv) has resolved any issues
relating to his Successor confidentially with his Successor or the Board of
Directors.
Only Options which have vested, as set forth above, shall be exercisable during
the exercise period.
3. Status as a Director. The parties acknowledge that Xxxxxxxxx is currently a
director of the Company. If Xxxxxxxxx is replaced as Chief Executive Officer, he
will complete his term as a director and agrees to serve the Board in such other
capacities as the Board shall request.
4. Severance Compensation. The Severance Compensation provisions of Paragraph 7
of the Original Agreement shall remain in force according to the conditions set
forth therein, and shall be applicable in the case of Xxxxxxxxx'x replacement as
CEO.
5. Payment as a Consultant. If, upon the date that Xxxxxxxxx ceases to be
President and Chief Executive Officer, Xxxxxxxxx is receiving compensation
pursuant to the Severance Compensation provisions of Paragraph 7 of the Original
Agreement, Xxxxxxxxx agrees to provide consulting services to the Company for
the period of such
Severance Compensation, from time to time and as reasonably requested by the
Company, without additional compensation to Xxxxxxxxx. If the Company requests
that Xxxxxxxxx provide such consulting services after any such Severance
Compensation terminates, the Company shall pay Xxxxxxxxx $45 per hour and shall
reimburse Xxxxxxxxx for his reasonable expenses incurred as a consultant.
EXECUTED as of the first date set forth above.
"PCI" "Xxxxxxxxx
Premium Cigars International, Ltd.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxx, Chairman Xxxxxx X. Xxxxxxxxx
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