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EXHIBIT 10.7(b)
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment, dated as of August 24, 1998 (the "Amendment'), is made
and entered into by and between Xxxxxxxx X. Xxxxx ("Executive") and Industrial
Distribution Group, Inc. ("IDG") to amend that certain Employment Agreement by
and between them dated as of September 29, 1997 (the "Agreement").
W I T N E S S E T H:
WHEREAS, in order to reflect the implementation of certain
modifications to Executive's employment with IDG established by the Board of
Directors of IDG and consented to by Executive, which modifications affect
certain terms of the Agreement; and
WHEREAS, The Distribution Group, Inc., a Georgia corporation
("Subsidiary"), is a wholly owned subsidiary of IDG and desires to evidence its
acknowledgment and acceptance of the terms of this Amendment and the Agreement.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereby covenant and agree as follows:
1. POSITION AND DUTIES. Section 1 of the Agreement is hereby amended to
read in its entirety as follows:
"1. DUTIES AND EXTENT OF SERVICES
1.1 POSITION AND DUTIES. IDG hereby enters into this Agreement
to evidence and provide for the employment of Executive as Chairman and
Chief Executive Officer of Subsidiary. Consistent with the policies,
guidelines, and directives adopted or established by the Board of
Directors of Subsidiary (or by the Board of Directors of IDG with
respect to the operations of Subsidiary), acting pursuant to and in
accordance with lawful authority, Executive shall be in charge of the
development, establishment, and implementation of policy and strategic
initiatives for Subsidiary, with authority and responsibility
consistent with his position as the principal executive officer of
Subsidiary. Executive shall be entitled to serve as a member of IDG's
Board of Directors as well as of the Board of Directors of Subsidiary,
at all times during the term of this Agreement. Executive agrees to
serve, without additional compensation, in a similar executive capacity
with other subsidiaries of IDG and in such other executive capacities
as may be designated by the Board of Directors of
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IDG, consistent with the positions, responsibilities, and authority of
Executive hereunder. Neither Executive's employment hereunder nor any
other position referred to in the preceding sentence shall require
Executive to relocate his primary residence from his current location,
and Executive may perform his duties at such geographic locations as he
may determine in his reasonable discretion, giving due regard to the
location of his primary residence, the location of Subsidiary's
principal offices, and the best interest of IDG and Subsidiary.
1.2 EXTENT OF SERVICES. Executive agrees to devote his full
working time, energy, and skill to the business of Subsidiary and its
affiliates and to the promotion of Subsidiary's and IDG's interests and
to discharge Executive's duties in good faith and in a professional
manner. Executive affirms and represents that he is under no obligation
to any former employer or other party that is in any way inconsistent
with, or that imposes any restriction upon, his acceptance of
employment hereunder with Subsidiary, the employment of Executive by
Subsidiary, or Executive's undertakings under this Agreement."
2. INCENTIVE COMPENSATION AND BENEFITS. Section 3.2 and Section 4 are
amended in their entirety read as follows:
"3.2 GENERAL INCENTIVE COMPENSATION AND SAVINGS PROGRAMS. IDG
hereby agrees that Executive shall be entitled to participate, to an
extent consistent with Executive's title and Base Salary, in such
incentive compensation and savings programs, including stock option or
other stock-based compensation plans or profit sharing plans, 401(k)
plans, or other savings programs, as may be established by IDG, or
approved by IDG for the Company, for similarly situated Executives,
other key employees, or employees as a group."
"4. BENEFITS
During Executive's employment hereunder, Executive shall:
(a) be eligible to participate in employee fringe benefits and
any pension or profit sharing plans that may be provided by IDG for its
operating division level executive employees in accordance with the
provisions of any such plans, as the same may be in effect from time to
time;
(b) be eligible to participate in any medical and health plans
or other employee welfare benefit plans that may be provided by IDG for
its operating division level executive employees in accordance with the
provisions of any such plans, as the same may be in effect from time to
time;
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(c) be entitled to annual paid vacation in accordance with IDG
policy that may be applicable to operating division level executive
employees from time to time;
(d) be entitled to sick leave, sick pay, and disability
benefits in accordance with any IDG policy that may be applicable to
operating division level executive employees from time to time; and
(e) be entitled, without limitation of the foregoing, to the
continuation by IDG or Subsidiary on terms acceptable to Executive of
(and IDG hereby agrees to so continue) the life and disability
insurance policies and related program described on Schedule A to the
Agreement."
3. CONSTRUCTIVE DISCHARGE. Section 7.5 of the Agreement is hereby
amended to read in its entirety as follows:
"7.5 BY EXECUTIVE. If (a) IDG or Subsidiary significantly
reduces Executive's authority or duties as provided for in this
Agreement or Executive's standing within IDG as a function of
Executive's relationships with the Board of Directors of IDG or
Subsidiary, (b) a change of control of IDG occurs that is not consented
to by Executive, (c) Executive, without his consent, is not elected or
retained as a director of IDG or Subsidiary, or (d) Executive is
required by IDG or Subsidiary, without his consent, to relocate his
primary residence from his current location, then, in any such event,
Executive may terminate this Agreement and such termination shall be
treated as if it were a Discharge under Section 7.4; provided that the
Board of Directors of IDG shall have received written notice from
Executive of any reduction described in clause (a) above upon which
Executive proposes to base a termination and IDG shall have failed
within thirty (30) days thereafter to reverse or cure the situation
giving rise to the grounds asserted by Executive. For purposes hereof,
"change of control" shall mean (e) the acquisition by a person or
entity other than Executive or an affiliate of Executive, whether in
one or several transactions, by exchange, merger, consolidation,
assignment, stock spin-off, stock split-up, or other transaction (other
than pursuant to a registered underwritten public offering of voting
stock by IDG), of an amount of the voting stock of IDG, or of the right
to vote or to direct the voting of such amount of voting stock,
sufficient to elect a majority of the Board of Directors of IDG, or (f)
a change in the membership of the Board of Directors of IDG such that a
majority of the members are persons who are not Continuing Directors.
For purposes of this Agreement, a "Continuing Director" is a person who
is a member of the Board of Directors of IDG on the date hereof or a
person who is elected as a director of IDG upon the nomination by or
approval of a majority of the Continuing Directors in office. If
Executive terminates this Agreement due to a change of control, then in
lieu of the payment provided for in Section 7.4(a), Executive shall
receive a cash payment equal to the present value (based on IDG's then
current cost of borrowing) of Executive's Base Salary for the
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remainder of the Term, or for a period of two years, whichever period
is longer, payable within thirty (30) days of the date of the
occurrence of such event."
4. PERFORMANCE OF CERTAIN IDG OBLIGATIONS BY SUBSIDIARY. Executive and
IDG hereby agree, and Subsidiary acknowledges and accepts, that financial
obligations of IDG to Executive under the Agreement may be performed by
Subsidiary if so directed by the Board of Directors of IDG, or if otherwise
agreed to between Executive and IDG, without requiring any further amendment to
the Agreement, it being understood and agreed that, for purposes of this
Agreement, any such performance shall be tantamount to direct performance by
XXX.
0. CONTINUATION OF OTHER TERMS. Except as expressly set forth in this
Amendment, or as may be required as an inalterable matter of law in light of the
change in Executive's position from that of an officer of IDG to that of an
officer of Subsidiary, all other terms and provisions of the Agreement are
unaffected hereby and remain in full force and effect.
6. FURTHER ACKNOWLEDGMENT OF DUE CONSIDERATION. Executive, IDG, and
Subsidiary hereby expressly acknowledge that the arrangements and agreements
made and entered into in this Amendment are for good and valuable consideration
that each is receiving, and that this Amendment and the Agreement as so amended
are valid and enforceable against each of them in accordance with their
respective terms.
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IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement, as an instrument under seal, as of the day and year first written
above.
[SEAL] "IDG"
Attest: INDUSTRIAL DISTRIBUTION GROUP, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Secretary or Assistant Secretary Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
"EXECUTIVE"
/s/ Xxxxxxxx X. Xxxxx (SEAL)
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XXXXXXXX X. XXXXX
Acknowledged and Accepted,
as of the 25th day of August, 1998:
THE DISTRIBUTION GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxxx
President
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