Exhibit 10.1
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
This THIRD AMENDMENT (this "Amendment"), is made and entered into on April
27, 2000, but is effective as of the 1st day of January, 2000, to the Employment
Agreement made and entered into on May 24, 1995, as amended by an amendment
dated December 31, 1996 and an amendment entered into on August 21, 1998 (such
Employment Agreement as amended is hereinafter referred to as the "Agreement"),
by and between ALL AMERICAN SEMICONDUCTOR, INC., a Delaware corporation (the
"Company"), and XXXX XXXXXXXX (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company and Employee mutually desire and each of them is
willing, in accordance with the terms and conditions specifically restated,
added, deleted or otherwise set forth below, to amend the Agreement; it being
understood by the Company and Employee that all terms and conditions of the
Agreement not otherwise specifically modified by this Amendment shall remain
effective and continue operating in full force throughout the entire term of the
Agreement.
NOW, THEREFORE, for and in consideration of the covenants and agreements
hereinafter set forth, the parties hereto mutually agree as follows:
1. TERM OF EMPLOYMENT. Section 1 of the Agreement is hereby amended,
restated and replaced in its entirety as follows in order to extend the term of
Employee's employment under the Agreement by five (5) years:
"1. TERM OF EMPLOYMENT. The Company agrees to employ Employee, and
Employee agrees to be so employed, for a term of employment commencing on the
Effective Date and continuing until December 31, 2005, subject, however, to the
terms and conditions of this Agreement concerning earlier termination by each of
the parties. The term of this Agreement shall automatically renew each year for
an additional one (1) year term unless the Company or Employee notifies the
other of its or his intention not to renew this Agreement no later than sixty
(60) days prior to the expiration of the then-current term."
2. Section 3(a) of the Agreement is hereby amended, restated and
replaced in its entirety as follows:
"Effective January 1, 2000, the Company agrees to pay to Employee, as
base salary, for 2000 calendar year, gross annual salary at a rate equal to
$291,166.64 per annum. For each calendar year during the term of this Agreement
commencing January 2000, Employee's gross annual salary shall be increased by
the greater of (i) 4% of the prior year's gross annual salary and (ii) the
amount of the percentage increase in the Consumer Price Index for the most
currently available twelve (12) month period over the preceding twelve (12)
month period multiplied by the prior year's gross annual salary. The base salary
shall be payable on the same basis (including appropriate payroll withholding)
as the Company, from time to time, generally pays its employees. Employee shall,
in addition to base salary, receive, in respect of each calendar year (or
partial calendar year) during which this Agreement is in effect, an annual cash
bonus (the "Cash Bonus") equal to 3% of the pre-tax net income of the Company
before non-recurring and extraordinary charges ("pre-tax net income") for such
calendar year in excess of $1 million. The maximum amount of the Cash Bonus for
any year shall be limited to two times Employee's base salary for such year
(e.g., the Cash Bonus in respect of the 2000 calendar year shall not exceed
$582,333.28 regardless of 2000 pre-tax net income). The Cash Bonus shall be paid
to Employee on a quarterly basis as follows: The Cash Bonus payment for the
first calendar quarter (the "First Quarterly Bonus Payment") shall be equal to
3% of the excess, if any, that pre-tax net income of the Company for the first
calendar quarter exceeds $250,000. The Cash Bonus payment for the second
calendar quarter (the "Second Quarterly Bonus Payment") shall be equal to (i) 3%
of the excess, if any, that pre-tax net income of the Company for the first two
calendar quarters exceeds $500,000 less (ii) the First Quarterly Bonus Payment.
The Cash Bonus payment for the third calendar quarter (the "Third Quarterly
Bonus Payment") shall be equal to (i) 3% of the excess, if any, that pre-tax net
income of the Company for the first three calendar quarters exceeds $750,000
less (ii) the aggregate of the First Quarterly Bonus Payment and the Second
Quarterly Bonus Payment. The Cash Bonus payment for the fourth calendar quarter
(the "Fourth Quarterly Bonus Payment") shall be equal to (i) 3% of the excess,
if any, that pre-tax net income of the Company for the calendar year exceeds
$1,000,000 (the "Annual Bonus Amount") less (ii) the aggregate of the First
Quarterly Bonus Payment, the Second Quarterly Bonus Payment and the Third
Quarterly Bonus Payment (collectively, the "Three Quarterly Bonus Payments"). In
the event that the aggregate Three Quarterly Bonus Payments paid to the Employee
exceeds the Annual Bonus Amount, such excess amount shall be repaid to the
Company within thirty days of such determination. Each of the Three Quarterly
Bonus Payments shall be paid within thirty (30) days following completion of the
unaudited financial statements for such quarter. The Fourth Quarterly Bonus
Payment shall be paid to Employee within thirty (30) days following completion
of each annual audit of the Company. Each payment of Cash Bonus (including each
of the Three Quarterly Bonus Payments) shall be calculated in accordance with
generally accepted accounting principles, consistently applied, without taking
any Cash Bonus of Employee, or any similar bonus based on the earnings or
performance of the Company paid to any other executive officer of the Company,
into account as an expense. It is anticipated by the Company that none of the
grant, vesting or exercise of any options granted and/or contemplated to be
granted, or of any warrants or similar rights issued by the Company from time to
time, will constitute or result in an expense or charge against the Company's
income. However, if such turns out not to be the case, no such expense or charge
shall be taken into account when computing pre-tax net income for purposes of
determining the Cash Bonus. If being computed for a partial calendar quarter,
the Cash Bonus shall be appropriately and equitably prorated. Consumer Price
Index as used herein shall mean the Consumer Price Index shown on the U.S. City
Average for all urban consumers, unadjusted, all items, as promulgated by the
Bureau of Labor Statistics of the U.S. Department of Labor. In the event that
the Consumer Price Index referred to herein ceases to incorporate a significant
number of the items as currently set forth therein, or if a substantial change
is made in the method of establishing said Consumer Price Index, then the
Consumer Price Index shall be adjusted to the figure that would have resulted
had no change occurred in the manner of computing the Consumer Price Index. In
the event that the Consumer Price Index (or successor or substitute index) is
not available, then the Company may use
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another governmental or nonpartisan publication evaluating the information
theretofore used in determining the Consumer Price Index in lieu of said
Consumer Price Index. "
3. The following new Section 3(i) is added after the end of Section
3(h):
"(i) Employee has been granted certain incentive stock options to
acquire shares of common stock of the Company ("Stock Options") and in the
future may be granted additional Stock Options. Each of the agreements pursuant
to which any Stock Options have been or will be granted by the company are
hereby amended to provide that, unless Employee has been terminated pursuant to
Section 5(a), as such section may be amended from time-to-time, or pursuant to
any comparable for cause provision under any successor employment agreement,
Employee shall have not less than ninety (90) days after termination of
Employee's employment to exercise his Stock Options."
4. CAPITALIZED TERMS. All capitalized terms used herein, which are not
defined herein, shall have the respective meanings ascribed to them in the
Agreement.
5. EFFECT. Except as otherwise specifically modified by this Amendment,
all terms, conditions and provisions of the Agreement shall remain effective and
continue operating in full force and without change.
IN WITNESS WHEREOF, Employee has hereunto set his hand and the Company has
caused this Amendment to be executed by its duly authorized officer effective as
of the day and year first above written.
ALL AMERICAN SEMICONDUCTOR, INC.
By: /s/ XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx,
Chief Executive Officer and President
EMPLOYEE:
/s/ XXXX XXXXXXXX
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Xxxx Xxxxxxxx
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