Exhibit 10.04
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AMENDMENT NO. 2 TO
EMPLOYEE AGREEMENT
THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT ("Amendment"), entered into as
of October __, 1997 and effective as of December 1, 1997 (the "Amendment Date"),
between Beaufort X. X. Xxxxxx ("Employee") and ICON Holdings Corp., Delaware
corporation (the "Company"), amends that certain Employment Agreement dated as
of August 20, 1996 between the Company and Employee, as amended by Amendment No.
1 to Employment Agreement dated as of April 1, 1997 between the Company and
Employee (the "Current Employment Agreement", and the Current Employment
Agreement as amended by this Amendment, hereinafter the "Agreement").
WHEREAS, the Company wishes to amend and extend the Current Employment
Agreement in order to provide an incentive to the Employee to continue to serve
as the Company's Chief Executive Officer through the extended term thereof, and
Employee shall agree to such amendment and extension upon the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Section 1 of the Current Employment Agreement is amended as follows: "The
Employment Period is hereby extended for a term expiring December 31, 2002,
unless terminated prior thereto in accordance with Section 3 of the Agreement or
further extended by mutual agreement of the Company and Employee."
2. Paragraph (b)(i) of Section 2 of the Current Employment Agreement is hereby
amended as follows:
"Effective as of the Amendment Date and for the period through December 31,
1998, the Employee shall receive a base salary ("Base Salary") at a rate of
$275,000 per year, subject to automatic annual increases commencing January 1,
1999 during the Employment Period of 7.5% per year, to be paid in accordance
with the Company's payroll policies Employee shall also be entitled to retain,
without reimbursement, all bonus payments previously paid to Employee as advance
draws against such bonus as of the Amendment Date.
3. Paragraph (b)(ii) of Section 2 of the Current Employment Agreement,
including Exhibit A to the Current Employment Agreement as incorporated therein
by reference, is hereby deleted in its entirety and the following new provisions
are hereby substituted therefor:
"In addition to Base Salary, the Employee shall receive, with respect to
each fiscal year ending during the Employment Period commencing with the 1998
fiscal year, an annual incentive bonus ("Annual Bonus"), in accordance with the
Company's Executive Bonus Plan
which has been adopted by the Board of Directors as of October __, 1997 and
attached hereto as Exhibit A, as the same may be amended or modified from time
to time (the "Executive Bonus Plan"). As determined by the Chairman of the Board
and approved by the Board of Directors, the Employee shall receive not less than
twenty-five percent (25%), nor more than thirty-three percent (33%), of the
funds pooled under the Executive Bonus Plan for each fiscal year. The Annual
Bonus shall be paid promptly, but in no event more than thirty (30) days, after
the Company's receipt of the audited financial statements of the Company for the
subject fiscal year. Commencing December 1, 1997, the Employee shall be entitled
to an advance draw against his Annual Bonus in an amount equal to 50% of the
anticipated amount of such Annual Bonus, to be payable in semi-monthly
installments."
4. Section 2 of the Current Employment Agreement is hereby amended by the
addition of the following new paragraph (b)(xiii):
"(xiii) Stock Options. On or before March 31, 1998, the Company
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shall establish an incentive stock option plan to be known as the 1997
Stock Option Plan and shall upon consummation of the Company's planned
initial public offering grant to the Employee options to acquire
thereunder 1.75% of the shares of the outstanding Common Stock at the IPO
price. Such options are expected to vest 33% each on the first three
anniversaries of the grant date and to expire on the tenth anniversary of
the date of grant."
5. Section 2(b)(ix) of the Current Employment Agreement is hereby amended by
the addition of the following new sentence: "The Employee shall also be
entitled to reimbursement of or payment by the Company of Employee's actual
dues, costs and expenses of membership in a social club, plus initiation
expense."
6. The text of the second sentence of Paragraph (b) of Section 3 of the
Current Employment Agreement is hereby deleted and the following text is
substituted therefor:
" "Cause" for the purposes of this Agreement shall mean (i) fraud or
embezzlement involving assets of the Company, its customers, suppliers or
affiliates; (ii) Employee's conviction of a criminal felony offense; (iii) the
willful material breach or habitual neglect of Employee's obligations under this
Agreement or Employee's duties as an employee of the Company; or (iv) Employee's
willful failure to follow lawful material directives of the Board of Directors.
The existence of Cause for termination of Employee's employment by the Company
shall be subject, upon the written election by Employee or the Company, to
binding arbitration as provided in Section 9 hereof. The cost of arbitration,
exclusive of the cost of each party's legal representation (which, except as
hereinafter otherwise provided, shall be borne by the party incurring the
expense), shall be borne by the instigating party; provided, however, that the
arbitrators' award may require either party to reimburse the other for the
reasonable cost of legal representation in the arbitration proceedings."
7. The text of Paragraph (a) of Section 4 of the Current Employment Agreement
is hereby deleted and the following new text is substituted therefor:
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"(a) Severance Payments Upon Resignation or Termination Other Than for
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Cause, Death or Disability.
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1. Termination Without Cause after Change in Control: If there occurs a
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change of control of the Company at any time, and Employee's employment as Chief
Executive Officer is terminated (i) by the Company for any reason other than
Cause or (ii) by Employee after a reduction in either responsibilities or pay or
change in location, Employee will receive the following:
(a) Full immediate vesting of any issued, unvested stock options,
(b) Full payment of any accrued, unpaid Base Salary, Annual Bonus and
benefit payments,
(c) A sum equal to three years of his highest to date annual Base Salary,
(d) A sum equal to three times his highest to date Annual Bonus,
(e) Three years of full benefits continuation, including health,
disability and life insurance, and full Company contributions to any qualified
and non-qualified retirement and pension plans or the then current value of same
in cash if the terms of such plans preclude such participation, but only to the
extent that similar benefits are not received by the Employee from a new
employer during such three year period,
(f) If such termination occurs on or after January 1, 2000, a $500,000
cash payment, and
(g) In the event that Employee's employment is terminated pursuant to
this item 1 and the excise tax imposed by Section 4999 of the Internal Revenue
Service Code (the "Code") (or any successor penalty or excise tax subsequently
imposed by law) applies to any payments under this item 1, an additional amount
shall be paid by the Company to Employee such that the aggregate after-tax
amount that Employee shall receive under this subsection 1, shall have a present
value equal to the aggregate after-tax amount that Employee would have received
and retained had such excise tax not applied to you. For this purpose, Employee
shall be assumed to be subject to tax in each year relevant to the computation
at the then maximum applicable combined Federal and New York income tax rate,
and the determination of the present value of payments to Employee shall be made
consistent with the principles of Section 280G of the Code.
2. Termination Without Cause Absent Change in Control: If Employee's
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employment as Chief Executive Officer is terminated by the Company (other than
for Cause) or by Employee after a reduction in either responsibilities or pay or
change in location, absent a change in control of the Company, Employee will
receive all of the payments and other benefits listed in subsection 1 above,
except those listed in paragraph (g).
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3. Resignation by Employee: If during the Employment Period Employee
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resigns in the absence of a reduction in either responsibilities or pay or
change in location, Employee will be entitled to receive the following:
(a) Full payment of any accrued, unpaid Base Salary, Annual Bonus or
benefit payments,
(b) A sum equal to eighteen (18) months of his highest to day annual
Base Salary,
(c) A sum equal to one and one-half (1 1/2) times his highest to date
Annual Bonus, and
(d) Eighteen (18) months of full benefits continuation, including
health, disability and life insurance, and full Company contributions to any
qualified and non-qualified retirement and pension plans or the then current
value of same in cash if the terms of such plans preclude such participation,
but only to the extent that similar benefits are not received by the Employee
from a new employer during such three year period,
4. Expiration of Employment Agreement: Upon the expiration of this
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Agreement (or successor agreement), Employee will be entitled to receive the
same payments and other benefits to which he would have been entitled upon
resignation as set out in subsection 3 above.
8. The text of Paragraph (c) of Section 4 of the Current Employment
Agreement is hereby deleted and the following new text is substituted therefor:
"(c) Termination For Cause: If Employee's employment as Chief Executive
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Officer is terminated for Cause, Employee will be entitled only to full payment
of any accrued, unpaid Base Salary,Annual Bonus and benefit payments and
retention of any fully vested stock options and other fully-vested benefits, if
any.
9. The text of first sentence of Section 5 of the Current Employment
Agreement, through the word "not" in the third line thereof, is hereby deleted
and the following new text is substituted therefor:
"During the Employment Period and, provided the Company is not in default
under this Agreement, for a period of three years following the expiration or
termination of this Employment Agreement (other than a termination without Cause
after a Change in Control), Employee shall not:"
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EXECUTED as of the date first above written.
The Company: The Employee:
ICON HOLDINGS CORP.
By:
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Title: Beaufort X. X. Xxxxxx
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Exhibit A
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Summary of Proposed ICON Holdings Corp. Executive Bonus Plan ("Bonus Plan"):
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Under the Bonus Plan, ICON Holdings Corp. (the "Company") shall annually
segregate a pool of funds consisting of a portion of the pre-tax income of the
Company to be distributed to Beaufort X. X. Xxxxxx, Xxxx X. Xxxxx and certain
other executives. Messrs. Xxxxxx and Xxxxx each shall be entitled to receive
between 25% and 33% at the end of each such year, with the remainder being
distributed to the remaining Executive Vice President and Senior Vice Presidents
of the Company, such distribution amounts being determined and recommended by
Xx. Xxxxxx and approved by the Board of Directors. The amount of the
distribution will be calculated based on a reference rate (the "Reference Rate")
multiplied by pre-tax income. The Reference Rate will be equal to 9.5% for
calendar years 1998 and 1999 and 9.0% for the years 2000, 2001 and 2002 if the
Company achieves 85% or more of its projected financial results attached hereto
as amended by the Board from time to time. Otherwise, the Reference Rate shall
be adjusted downward as follows: (i) if the Company's final results are equal to
or greater than 76% and less than 85% of such projections, the Reference Rate
shall be 8.0% of pre-tax income for 1998 and 1999 and 7.65% of pre-tax income
for 2000, 2001 and 2002; (ii) if the Company's final results are equal to or
greater than 66% and less than 75% of such projections, the Reference Rate shall
be 7.125% of pre-tax income for 1998 and 1999 and 6.75% of pre-tax income for
2000, 2001 and 2002; (iii) if the Company's final results are equal to or
greater than 50% and less than 65% of such projections, the Reference Rate shall
be 6.0% of pre-tax income for 1998 and 1999 and 5.95% of pre-tax income for
2000, 2001 and 2002; and (iv) if the Company's final results are less than 50%
of such projections, the Reference Rate shall be 5.0% of pre-tax income for 1998
and 1999 and 4.75% of pre-tax income for 2000, 2001 and 2002.
6
Exhibit 10.04
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EMPLOYMENT AGREEMENT
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AGREEMENT by and between ICON Capital Corp., a corporation organized
and existing under the laws of the State of Connecticut (the "Company"), and
Beaufort Xxxxxx (the "Employee"), dated as of August 20, 1996.
--------------------
Pursuant to a certain Stock Purchase Agreement between ICON Holding
Corp. and Xxxxx X. Xxxxxxx, Xxxxxx X. XxXxxxx and Xxxxxxx Xxxxxx dated as of
August 20, 1996 (the "Purchase Agreement"), the stock of the Company has been
sold to ICON Holdings Corp. and, in order to obtain Employee's services
following the closing of the Purchase Agreement, the Company and Employee have
each decided to enter into this Employment Agreement.
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1. Employment Period.
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(a) The terms and conditions of this Agreement shall be and
remain in effect during the continuation of the Employee's employment hereunder
(the 'Employment Period"). The Employment Period shall commence on the date
hereof ("Effective Date") and shall continue for an initial term of 36 months
("Initial Period") or such longer period if Employer's personal guaranty is
still in effect with respect to that certain Loan and Security Agreement between
Company and Prime Leasing, Inc. and thereafter until terminated pursuant to the
terms hereof.
(b) The Company may terminate the Employee's employment only for
Cause or Death or Disability upon six calendar months written notice to the
Employee, expiring on the last day of the Initial Period or at any time
thereafter.
2. Terms of Employment.
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(a) Position and Duties.
(i) Commencing on the Effective Date and for the remainder
of the Employment Period, the Employee shall be engaged as the
Chief Executive Officer and President of the Company with an
office located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx
reporting to the Board of Directors of the Company and shall have
such duties, responsibilities and authority as shall be
consistent therewith and as the Board of Directors of the Company
shall from time to time reasonably determine; and
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Employee is entitled, the Employee shall
devote full business time to the business and affairs of the Company, except as
noted in Section 2(b)(xii) and use all reasonable efforts to perform faithfully
and efficiently such duties, responsibilities and authority.
(b) Compensation.
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(i) Base Salary. Effective as of the Effective Date, the Employee
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shall receive a base salary ("Base Salary") at a rate of $200,000 per year. The
Board of Directors may, at its sole discretion, increase the Base Salary from
the beginning of each subsequent fiscal year of the Company, based upon its
review of the Company's and the Employee's performance;
(ii) Annual Bonus. In addition to Base Salary, the Employee shall
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receive, for each fiscal year ending during the Employment Period, an annual
bonus (the "Annual Bonus") as set forth in Exhibit A. Unless the Employee shall
elect to defer the receipt of any part of the Annual Bonus, each such payment
shall be paid promptly, but in no event more than thirty (30) days, after the
Company's receipt of the audited financial statements of the Company for the
fiscal year or, as the case may be, preparation of the Company's monthly
management accounts for the relevant period.
(iii) Incentive, Savings and Retirement Plans. During the Employment
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Period, the Employee shall be entitled to participate in all incentive, savings
and retirement plans, practices, policies and programs, if any, applicable
generally to other employees of the Company;
(iv) Welfare Benefit Plans. During the Employment Period, the
---------------------
Employee and/or the Employee's family, as the case may be, shall be eligible for
participation in and shall receive all benefits currently entitled to under the
Company's welfare benefit plans, practices, policies and programs provided by
the Company (including, without limitation, medical, major medical, hospital,
prescription, dental, short-term and long-term disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
and programs, if any);
(v) Expenses. During the Employment Period, the Employee shall be
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entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Employee in the performance of his duties hereunder. and until such time as
Employee is provided an apartment in New York City by the Company, Employee
shall be reimbursed for all reasonable living expenses incurred in New York
City;
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(vi) Vacation. The Employee shall be entitled to at least
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four weeks annual paid vacation during the Employment Period. Unused
vacation shall be carried forward without limitation;
(vii) Payment Schedule. Base Salary shall be paid in
----------------
accordance with the regular payroll policies of the Company as
determined by the Board of Directors from time to time but in no event
less frequently than monthly; and
(viii) Automobile. The Employee will be entitled to an
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automobile which will be leased and paid for by the Company (including
insurance, any taxes, maintenance and normal operating costs,
including all fuel costs and a parking space in New York City) and
provided to the Employee during the Employment Period.
The Employee may chose the make and model of the automobile so long as
the monthly lease payment does not exceed $1000 per month on a three
year contract.
(ix) During the Employment period, the Company agrees to
make available at Employee's convenience a two-bedroom apartment in
New York City and the Company shall enter into a lease for such
apartment for one year at a time for an amount not to exceed $3,500 a
month plus utilities. The Company also agrees to pay for Employee's
relocation costs which shall include out-of-pocket moving expenses and
other costs not to exceed $5,000.00.
(x) During the Employment period, Employee shall be
reimbursed for costs and expenses for and related to Employer's
membership in a health club in New York, which costs and expenses
shall not exceed $300.00 a month.
(xi) Other Interests. The Company acknowledges that
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Employee retains financial interests in his former company and whereas
Employee will not participate in its day to day business he will need
to spend up to 10% of his time on such activities.
3. Termination of Employment.
-------------------------
(a) Death or Disability. The Employee's employment shall terminate
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automatically upon the Employee's death during the Employment Period. If the
Company determines in good faith that the Disability (as defined below) of the
Employee has occurred during the Employment Period, it may give to the Employee
written notice in accordance with this Agreement of its intention to terminate
the Employee's employment. In such event, the Employee's employment with the
Company shall terminate effective on the 60th day after receipt of such notice
by the Employee (the "Disability Effective Date"), provided that, within the 60
days after such receipt, the Employee shall not have returned to full-time
performance of the
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Employee's duties. For purposes of this Agreement, "Disability" shall mean the
absence of the Employee from the Employee's duties with the Company on a full-
time basis for 90 consecutive business days as a result of incapacity due to
mental or physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers; provided, that the Employee
shall be entitled, during the aforesaid 60 day period, to challenge any
determination of Disability by such a physician, and in the event of such a
challenge, the final decision shall be made by a physician selected by the
Company's physician and the Employee's physician.
(b) Cause. The Company may terminate the Employee's employment
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during the Employment Period for Cause. For purposes of this Agreement, "Cause"
shall mean dishonest conduct in connection with the performance of Employee's
duties hereunder, breach of fiduciary duty to the Company or its shareholders
involving personal profit, intentional failure to perform those duties stated in
Section 2(a)(i) under this Agreement, or fraud or conviction of a felony
resulting in or intended to result in injury to the Company;
(c) By Employee. Employee may terminate this Agreement at any time
-----------
during the Employment Period if the Company fails to pay the Employee any amount
due hereunder within five days after such payment is due or the Company fails to
perform any of its material obligations hereunder ("Employee Termination").
(d) Notice of Termination. Any termination by the Company for Cause
---------------------
or any Employee Termination shall be communicated by Notice of Termination to
the other party hereto given in accordance with this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated and (iii) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the
giving of such notice). The failure by the Employee or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Cause or establishing the right to an Employee Termination shall not
waive any right of the Employee or the Company hereunder or preclude the
Employee or the Company from asserting such fact or circumstance in enforcing
the Employee's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
-------------------
Employee's employment is terminated by the Company for Cause or pursuant to an
Employee Termination, the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be, (ii) if the Employee's
employment is terminated by reason of death or Disability, the date of death of
the Employee or the Disability Effective Date, as the case may be.
(f) Right to Cure. Notwithstanding any provision herein to the
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contrary, the Company or Employee, as applicable, shall have a right to cure the
matters giving rise to an Employee Termination or for Cause termination,
respectively, for a period of 30 days commencing upon the receipt of the Notice
of Termination. If the Company or Employee
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successfully cures such matters within such thirty day period, the termination
of this Agreement or any provision hereof noticed in such Notice of Termination
shall be void and ineffective.
4. Obligations of the Company Upon Termination.
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(a) Other Than for Cause, Death or Disability. If, during the Initial
Period, there is an event of an Employee Termination, the Company shall pay to
the Employee in a lump sum in cash within 10 business days after his Date of
Termination, the aggregate of the sum of (A) an amount equal to the remainder of
the Base Salary and Annual Bonus and any other forms of compensation yet unpaid
under this Agreement up to the date of expiration of the Initial Period or six
months Base Salary, whichever is the greater, (B) any compensation previously
deferred by the Employee, (C) any accrued vacation pay, and (D) any Annual Bonus
determined in accordance with Exhibit A. If such termination occurs after the
date of expiration of the Initial Period, the amount stipulated in clause (A) of
this Section 4(a) shall be equal to six months Base Salary less Base Salary
actually paid during the notice period (if any) specified pursuant to Section
l(b).
(b) Death; Disability. If the Employee's employment is terminated by
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reason of the Employee's death or Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Employee or the
Employee's legal representatives, as the case may be, under this Agreement,
other than for payment of any deferred payments.
(c) Cause: Voluntary Termination. If the Employee's employment shall
----------------------------
be terminated for Cause during the Employment Period or in the event the
Employee voluntarily terminates employment during the Employment Period, this
Agreement shall terminate without further obligations to the Employee.
5. Non-Competition. During the Employment Period and, except in the
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event of an Employee Termination for a period of six (6) months following the
Date of Termination, as long as the Company is not in default under this
Agreement, Employee shall not:
(a) directly or indirectly, either individually or as a principal,
partner, member, agent, employee, consultant, stockholder, joint venturer or
investor, or as a director or officer of any corporation, entity, proprietorship
or association, or in any other ownership, executive or management position,
engage or assist in activities, or have an active interest, of an ownership,
executive, management or consulting nature in a business in the business of
marketing and selling income fund products that would compete with the equipment
leasing investment funds products of the Company actually being marketed at the
time of termination;
(b) directly or indirectly, either individually or as a principal,
partner, member, agent, employee, consultant, stockholder, joint venturer or
investor, or as a director or officer of any corporation, entity, proprietorship
or association, or in any other ownership, executive or management position
whatsoever, (i) divert or attempt to divert from the Company any business with
any customer or prospective customer with which Employee has any business
contact or
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business association which was either under Employee's supervision or the
identity of which was learned by Employee while employed by the Company, (ii)
induce any salesmen, vendor, broker, dealer, representative, agent, or other
person transacting business with the Company to transact business for a business
in competition with the Company at the time of termination, or (iii) induce or
cause any employee of the Company to leave the employ of the Company other than
in the course of the loyal discharge of his duties.
Notwithstanding the above, this Section 5 shall not prohibit the Employee
from passively owning less than five percent (5%) of the shares of any
corporation or entity that is publicly traded on a securities exchange or over-
the-counter market.
6. Confidential Information.
------------------------
(a) From the date hereof and at all times thereafter, the Employee
shall not at any time or in any manner, directly or indirectly, knowingly
disclose to any party, other than the Company or at the request of the Company,
any trade secrets or Confidential Information (as defined below) of the Company
which employed by the Company and for six (6) months after termination of
employment. As used herein, Confidential Information shall mean information
known to or obtained by Employee prior to the Closing under the Purchase
Agreement or thereafter as an employee of the Company and not generally known in
the Company's industry and that relates in any way to the business of the
Company at any time during the Employment Period, including without limitation
any and all data bases, trade secrets, know-how, and other intellectual property
obtained or developed during the Employment Period.
(b) Employee acknowledges that during the course of his employment
with the Company he may develop or otherwise acquire papers, files or other
records involving or relating to trade secrets or Confidential Information. All
such papers, files and other records shall be the exclusive property of the
Company and shall, together with any and all copies thereof, be returned to the
Company upon the termination of Employee's employment with the Company.
7. Specific Performance. The Employee acknowledges that the covenants of
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the Employee in Section 5 and Section 6 are special and that the Company will be
irreparably harmed if the Employee's obligations thereunder are not specifically
enforced and that the Company would not have an adequate remedy at law in the
event of a violation or threatened violation thereof. Therefore, the Employee
agrees that the Company shall be entitled to such an injunction or a remedy of
specific performance for any actual or threatened violations or breach by the
Employee without necessity of the Company showing actual damages or that
monetary damages would not afford an adequate remedy. Employee shall have no
personal monetary liability arising out of or in connection with this Agreement,
except to the extent the Company suffers injury on account of the Employee's
willful and intentional actions resulting in or intended to result in injury to
the Company and only to the extent such willful and intentional actions result
in personal gain to the Employee.
8. Successors and Termination. This Agreement is personal to the
--------------------------
Employee and
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without the prior written consent of the Company shall not be assignable by the
Employee otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
legal representatives. This Agreement may not be assigned by the Company
without the prior written consent of Employee.
9. Miscellaneous.
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(a) The laws of the State of New York shall govern this Agreement and
any interpretations or constructions thereof. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors, assigns and legal
representatives, as the case may be.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, or by overnight
courier or by facsimile with confirmed transmission (with a hard copy mailed)
addressed as follows:
If to the Employee:
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Beaufort Xxxxxx
Xxxxxxxxx Farm
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to the Company:
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ICON Capital Corp.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx
Attention: President
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any
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right the Employee or the Company may have hereunder shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.
(f) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument. It shall not be necessary in making
proof of this Agreement or any counterpart hereof to produce or account for any
other counterpart.
(g) The terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
words of any gender shall include each other gender where appropriate.
(h) Any disputes, controversies, or claims arising between the
parties hereto arising out of or relating to this Agreement, or any provision
thereof, or the breach, termination or invalidity hereof, or the rights and
obligations created hereunder by the parties hereto (collectively "Disputes"),
shall be finally determined and settled by arbitration in accordance with the
commercial rules of the American Arbitration Association ("AAA"), as such are in
force at the time a demand for arbitration is made, as described below.
(i) Any dispute, controversy or claim relating to this
Agreement, or any provision thereof, or any breach or default in the
performance of the terms and conditions hereof shall be settled by
arbitration in the City of White Plains in accordance with the then-
existing arbitration rules promulgated by the AAA. The decision of
the arbitrators shall be final and binding on the parties, and
judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
(ii) In any arbitration proceeding under this Section 9(h),
the rights of the parties shall be determined according to the
governing law set forth in Section 9(a) above, and the arbitrators
shall apply such law.
(iii) The prevailing party shall be entitled to recover from
the nonprevailing party all costs and fees, including reasonable
attorney's fees, incurred by such prevailing party in connection with
such Dispute.
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IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand, and
the Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.
----------------------------
Beaufort Xxxxxx
ICON Capital Corp.
By:
-------------------------
-9-
Exhibit A to Employment Agreement with Beaufort Xxxxxx
------------------------------------------------------
Annual Bonus
------------
(1) The Annual Bonus of the Employee shall be computed by multiplying 3%
against the total net profit before tax (NPBT) of the Company and
before any distributions to ICON Holdings Corp., (IHC) the holding
company for the Company which would include any repayments of any
shareholder loans or the Loan and Security Agreement between the
Company and Xxxxx X. Xxxxxxx; always provided that after payment of
such Annual Bonus the NPBT as represented by cash (i.e., excluding any
accrual or equity accounting income) is sufficient to meet (when
distributed to IHC) all acquisition loan repayments (including
interest).
(2) If the Employment Period ends other than at the end of the Company's
fiscal year, Annual Bonus shall be based on the Company's earnings
before income tax disclosed in management amounts for the period
ending of the last day of the calendar month prior to that in which
the Employment Period ends.
-10-
AMENDMENT NO. 2 TO
EMPLOYEE AGREEMENT
THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT ("Amendment"), entered into as
of October __, 1997 and effective as of December 1, 1997 (the "Amendment Date"),
between Beaufort X. X. Xxxxxx ("Employee") and ICON Holdings Corp., Delaware
corporation (the "Company"), amends that certain Employment Agreement dated as
of August 20, 1996 between the Company and Employee, as amended by Amendment No.
1 to Employment Agreement dated as of April 1, 1997 between the Company and
Employee (the "Current Employment Agreement", and the Current Employment
Agreement as amended by this Amendment, hereinafter the "Agreement").
WHEREAS, the Company wishes to amend and extend the Current Employment
Agreement in order to provide an incentive to the Employee to continue to serve
as the Company's Chief Executive Officer through the extended term thereof, and
Employee shall agree to such amendment and extension upon the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Section 1 of the Current Employment Agreement is amended as follows: "The
Employment Period is hereby extended for a term expiring December 31, 2002,
unless terminated prior thereto in accordance with Section 3 of the Agreement or
further extended by mutual agreement of the Company and Employee."
2. Paragraph (b)(i) of Section 2 of the Current Employment Agreement is hereby
amended as follows:
"Effective as of the Amendment Date and for the period through December 31,
1998, the Employee shall receive a base salary ("Base Salary") at a rate of
$275,000 per year, subject to automatic annual increases commencing January 1,
1999 during the Employment Period of 7.5% per year, to be paid in accordance
with the Company's payroll policies Employee shall also be entitled to retain,
without reimbursement, all bonus payments previously paid to Employee as advance
draws against such bonus as of the Amendment Date
3. Paragraph (b)(ii) of Section 2 of the Current Employment Agreement,
including Exhibit A to the Current Employment Agreement as incorporated therein
by reference, is hereby deleted in its entirety and the following new provisions
are hereby substituted therefor:
"In addition to Base Salary, the Employee shall receive, with respect to
each fiscal year ending during the Employment Period commencing with the 1998
fiscal year, an annual incentive bonus ("Annual Bonus"), in accordance with the
Company's Executive Bonus Plan
which has been adopted by the Board of Directors as of October __, 1997 and
attached hereto as Exhibit A, as the same may be amended or modified from time
to time (the "Executive Bonus Plan"). As determined by the Chairman of the Board
and approved by the Board of Directors, the Employee shall receive not less than
twenty-five percent (25%), nor more than thirty-three percent (33%), of the
funds pooled under the Executive Bonus Plan for each fiscal year. The Annual
Bonus shall be paid promptly, but in no event more than thirty (30) days, after
the Company's receipt of the audited financial statements of the Company for the
subject fiscal year. Commencing December 1, 1997, the Employee shall be entitled
to an advance draw against his Annual Bonus in an amount equal to 50% of the
anticipated amount of such Annual Bonus, to be payable in semi-monthly
installments."
4. Section 2 of the Current Employment Agreement is hereby amended by the
addition of the following new paragraph (b)(xiii):
"(xiii) Stock Options. On or before March 31, 1998, the Company shall
establish an incentive stock option plan to be known as the 1997 Stock Option
Plan and shall upon consummation of the Company's planned initial public
offering grant to the Employee options to acquire thereunder 1.75% of the shares
of the outstanding Common Stock at the IPO price. Such options are expected to
vest 33% each on the first three anniversaries of the grant date and to expire
on the tenth anniversary of the date of grant."
5. Section 2(b)(ix) of the Current Employment Agreement is hereby amended by
the addition of the following new sentence: "The Employee shall also be
entitled to reimbursement of or payment by the Company of Employee's actual
dues, costs and expenses of membership in a social club, plus initiation
expense."
6. The text of the second sentence of Paragraph (b) of Section 3 of the Current
Employment Agreement is hereby deleted and the following text is substituted
therefor:
"Cause" for the purposes of this Agreement shall mean (i) fraud or
embezzlement involving assets of the Company, its customers, suppliers or
affiliates; (ii) Employee's conviction of a criminal felony offense; (iii) the
willful material breach or habitual neglect of Employee's obligations under this
Agreement or Employee's duties as an employee of the Company; or (iv) Employee's
willful failure to follow lawful material directives of the Board of Directors.
The existence of Cause for termination of Employee's employment by the Company
shall be subject, upon the written election by Employee or the Company, to
binding arbitration as provided in Section 9 hereof. The cost of arbitration,
exclusive of the cost of each party's legal representation (which, except as
hereinafter otherwise provided, shall be borne by the party incurring the
expense), shall be borne by the instigating party; provided, however, that the
arbitrators' award may require either party to reimburse the other for the
reasonable cost of legal representation in the arbitration proceedings."
7. The text of Paragraph (a) of Section 4 of the Current Employment Agreement
is hereby deleted and the following new text is substituted therefor:
2
"(a) Severance Payments Upon Resignation or Termination Other Than for
Cause, Death or Disability.
1. Termination Without Cause after Change in Control: If there occurs a
change of control of the Company at any time, and Employee's employment as Chief
Executive Officer is terminated (i) by the Company for any reason other than
Cause or (ii) by Employee after a reduction in either responsibilities or pay or
change in location, Employee will receive the following:
(a) Full immediate vesting of any issued, unvested stock options,
(b) Full payment of any accrued, unpaid Base Salary, Annual Bonus and
benefit payments,
(c) A sum equal to three years of his highest to date annual Base Salary,
(d) A sum equal to three times his highest to date Annual Bonus,
(e) Three years of full benefits continuation, including health, disability
and life insurance, and full Company contributions to any qualified and non-
qualified retirement and pension plans or the then current value of same in cash
if the terms of such plans preclude such participation, but only to the extent
that similar benefits are not received by the Employee from a new employer
during such three year period,
(f) If such termination occurs on or after January 1, 2000, a $500,000 cash
payment, and
(g) In the event that Employee's employment is terminated pursuant to this
item 1 and the excise tax imposed by Section 4999 of the Internal Revenue
Service Code (the "Code") (or any successor penalty or excise tax subsequently
imposed by law) applies to any payments under this item 1, an additional amount
shall be paid by the Company to Employee such that the aggregate after-tax
amount that Employee shall receive under this subsection 1, shall have a present
value equal to the aggregate after-tax amount that Employee would have received
and retained had such excise tax not applied to you. For this purpose, Employee
shall be assumed to be subject to tax in each year relevant to the computation
at the then maximum applicable combined Federal and New York income tax rate,
and the determination of the present value of payments to Employee shall be made
consistent with the principles of Section 280G of the Code.
2. Termination Without Cause Absent Change in Control: If Employee's
employment as Chief Executive Officer is terminated by the Company (other than
for Cause) or by Employee after a reduction in either responsibilities or pay or
change in location, absent a change in control of the Company, Employee will
receive all of the payments and other benefits listed in subsection 1 above,
except those listed in paragraph (g).
3
3. Resignation by Employee: If during the Employment Period Employee
resigns in the absence of a reduction in either responsibilities or pay or
change in location, Employee will be entitled to receive the following:
(a) Full payment of any accrued, unpaid Base Salary, Annual Bonus or
benefit payments,
(b) A sum equal to eighteen (18) months of his highest to day annual Base
Salary,
(c) A sum equal to one and one-half (1 1/2) times his highest to date
Annual Bonus, and
(d) Eighteen (18) months of full benefits continuation, including health,
disability and life insurance, and full Company contributions to any qualified
and non-qualified retirement and pension plans or the then current value of same
in cash if the terms of such plans preclude such participation, but only to the
extent that similar benefits are not received by the Employee from a new
employer during such three year period,
4. Expiration of Employment Agreement: Upon the expiration of this
Agreement (or successor agreement), Employee will be entitled to receive the
same payments and other benefits to which he would have been entitled upon
resignation as set out in subsection 3 above.
8. The text of Paragraph (c) of Section 4 of the Current Employment Agreement
is hereby deleted and the following new text is substituted therefor:
"(c) Termination For Cause: If Employee's employment as Chief Executive
Officer is terminated for Cause, Employee will be entitled only to full payment
of any accrued, unpaid Base Salary, Annual Bonus and benefit payments and
retention of any fully vested stock options and other fully-vested benefits, if
any.
9. The text of first sentence of Section 5 of the Current Employment Agreement,
through the word "not" in the third line thereof, is hereby deleted and the
following new text is substituted therefor:
"During the Employment Period and, provided the Company is not in default
under this Agreement, for a period of three years following the expiration or
termination of this Employment Agreement (other than a termination without Cause
after a Change in Control), Employee shall not:"
4
EXECUTED as of the date first above written.
The Company: The Employee:
ICON HOLDINGS CORP.
By:_____________________________ _______________________________
Title:__________________________ Beaufort X. X. Xxxxxx
5
EXHIBIT A
---------
Summary of Proposed ICON Holdings Corp. Executive Bonus Plan ("Bonus Plan"):
----------------------------------------------------------------------------
Under the Bonus Plan, ICON Holdings Corp. (the "Company") shall annually
segregate a pool of funds consisting of a portion of the pre-tax income of the
Company to be distributed to Beaufort X. X. Xxxxxx, Xxxx X. Xxxxx and certain
other executives. Messrs. Xxxxxx and Xxxxx each shall be entitled to receive
between 25% and 33% at the end of each such year, with the remainder being
distributed to the remaining Executive Vice President and Senior Vice Presidents
of the Company, such distribution amounts being determined and recommended by
Xx. Xxxxxx and approved by the Board of Directors. The amount of the
distribution will be calculated based on a reference rate (the "Reference Rate")
multiplied by pre-tax income. The Reference Rate will be equal to 9.5% for
calendar years 1998 and 1999 and 9.0% for the years 2000, 2001 and 2002 if the
Company achieves 85% or more of its projected financial results attached hereto
as amended by the Board from time to time. Otherwise, the Reference Rate shall
be adjusted downward as follows: (i) if the Company's final results are equal to
or greater than 76% and less than 85% of such projections, the Reference Rate
shall be 8.0% of pre-tax income for 1998 and 1999 and 7.65% of pre-tax income
for 2000, 2001 and 2002; (ii) if the Company's final results are equal to or
greater than 66% and less than 75% of such projections, the Reference Rate shall
be 7.125% of pre-tax income for 1998 and 1999 and 6.75% of pre-tax income for
2000, 2001 and 2002; (iii) if the Company's final results are equal to or
greater than 50% and less than 65% of such projections, the Reference Rate shall
be 6.0% of pre-tax income for 1998 and 1999 and 5.95% of pre-tax income for
2000, 2001 and 2002; and (iv) if the Company's final results are less than 50%
of such projections, the Reference Rate shall be 5.0% of pre-tax income for 1998
and 1999 and 4.75% of pre-tax income for 2000, 2001 and 2002.
6
