Exhibit 10.1
AMENDMENT TO EMPLOYMENT AGREEMENT
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AMENDMENT TO EMPLOYMENT AGREEMENT, dated as of July 1, 2002,
by and between U.S. CONCEPTS, INC., a Delaware corporation ("Employer"), and
XXXXX XXXXXX, an individual ("Employee").
W I T N E S S E T H:
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WHEREAS, Employer and Employee are parties to that certain
Employment Agreement, dated as of December 29, 1998, pursuant to which Employee
serves as Chief Executive Officer of Employer (the "Agreement"); and
WHEREAS, Employer and Employee desire to extend the term of
the Agreement until March 31, 2006 and to modify Employee's annual compensation,
all upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Employer and Employee agree as follows.
1. Section 2 of the Agreement is hereby amended so that
the words "President and Chief Executive Officer" are deleted in each place they
appear in such Section and are replaced with the words "Chief Executive Officer"
in each such case.
2. Section 4 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"4. Term. This Agreement shall be for a term
commencing on the date hereof and ending on March 31, 2006,
unless sooner terminated as hereinafter provided. Unless
sooner terminated as hereinafter provided, the term of this
Agreement shall automatically continue after March 31, 2006,
unless and until either party terminates this Agreement by
providing the other party with no less than ninety (90) days
prior written notice of termination effective on or after
March 31, 2006."
3. Section 5.1 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"5.1 Salary. (a) For all of the services rendered
by Employee to Employer, Employee shall receive a base salary
up to June 1, 2002 at the annual rate of Two Hundred Thousand
Dollars ($200,000) during such time as Employee is a full-time
employee of Employer, and thereafter at the annual rate of
Three Hundred Thousand Dollars ($300,000), pro rated for any
portion of a calendar year, subject to adjustment as set forth
in this Section 5.1.
(b) In the event Employer's actual pre-tax
earnings (defined in subsection (e) below) for the fiscal year
ended March 31, 2003, exceeds by 15% or more Employer's
pre-tax earnings for such period as set forth in the budget of
Employer approved by the Board of Directors (the "Board") of
CoActive Marketing Group, Inc. ("CoActive"), which budget is
attached hereto as Exhibit A, then in such event, Employee's
annual base salary shall be increased, effective for the
fiscal year commencing April 1, 2003, to equal $350,000 plus
the amount, if any, equal to the product of (A) $3,333.33
multiplied by (B) the excess of (i) the number, rounded down
to the next whole number, which (prior to such rounding),
expressed as a percentage, is the percentage by which
Employer's actual pre-tax earnings for the fiscal year ended
March 31, 2003 exceeds such approved budgeted amount of
pre-tax earnings for such fiscal year, over (ii) 15.
(c) In the event Employer's actual pre-tax
earnings, for the fiscal year ended March 31, 2004 or any
succeeding fiscal year, exceeds by 20% or more Employer's
pre-tax earnings for such fiscal year as set forth in the
budget of Employer approved of by the Board (and provided
further such budgeted pre-tax earnings exceeds the amount of
Employer's pre-tax earnings forecast in the prior year's
budget of Employer approved of by the Board), then in such
event, Employee's annual base salary shall be increased,
effective April 1 of the fiscal year immediately following the
fiscal year for which Employer's actual pre-tax earnings were
so exceeded, by $50,000, plus the amount, if any, equal to the
product of (A) $2,500.00 multiplied by (B) the excess of (i)
the number, rounded down to the next whole number, which
(prior to such rounding), expressed as a percentage, is the
percentage by which the actual pre-tax earnings for such
fiscal year ended exceeds the approved budgeted amount of
pre-tax earnings for such fiscal year, over (ii) 20.
(d) Notwithstanding anything in this Section 5.1
to the contrary, in the event Employer's actual pre-tax
earnings for the fiscal year ended March 31, 2003 or any
succeeding fiscal year, is less than Employer's pre-tax
earnings for such fiscal year as set forth in the budget
approved of by the Board, then in such event, Employee's
annual base salary shall be decreased, effective April 1 of
the fiscal year immediately following the fiscal year for
which Employer's actual pre-tax earnings were less than the
budgeted amount, to Employee's base salary immediately prior
to the then most recent increase received by Employee,
including, without, limitation, if Employer's actual pre-tax
earnings for the fiscal year ended March 31, 2003 is less than
Employer's pre-tax earnings for such fiscal year as set forth
in the budget approved of by the Board (attached hereto as
Exhibit A), then in such event, Employee's annual base salary
shall be decreased, effective April 1, 2003, to $200,000.
(e) For purposes of this Section 5.1 only,
"actual pre-tax earnings" shall mean net income before
deduction of any amounts payable on account of federal, state
or local taxes based on or measured by income, as determined
in consultation with Employer's independent auditors in
accordance with generally accepted accounting principles.
(f) In all events, Employee's base salary shall
be payable in reasonable periodic installments in accordance
with Employer's regular payroll practices in effect from time
to time."
4. Section 5.2 of the Agreement is hereby amended and
restated to read in its entirety as follows:
"5.2 Bonus. (a) In the event that in any 12-month
period commencing on the Bonus Commencement Date (as
hereinafter defined) or on any anniversary of the Bonus
Commencement Date, and ending on or prior to December 31, 2002
(each such 12-month period, a "Bonus Period"), Employer's
Pre-Tax Earnings (as hereafter defined) equal or exceed the
greater of (a) $600,000 or (b) 20% of the average outstanding
equity of Employer during such Bonus Period (calculated by
averaging the outstanding stockholder's equity of Employer as
set forth on Employer's balance sheet as of the last day of
each calendar quarter during the Bonus Period), Employer
shall, at Employee's option, pay to Employee and such other
officers and executives of Employer as Employee shall
determine a bonus equal to an aggregate of 5% of the amount by
which such Pre-Tax Earnings exceed the greater of the amounts
specified in clauses (a) and (b). Employee shall allocate such
bonus, if any, to and among himself and such other officers
and executives. For purposes of this Section 5.2(a) only, (i)
"Pre-Tax Earnings" shall have the meaning set forth in the
Asset Purchase Agreement except that any amounts accrued in
favor of or paid to management employees as bonuses shall not
be deducted in determining Pre-Tax Earnings, and (ii) "Bonus
Commencement Date" shall mean the date hereof if it is the
first of a month or the first day of the month immediately
following the date hereof if the date hereof is not the first
of a month. The bonus payable pursuant to this Section 5.2
shall be determined and paid after completion of CoActive's
audited financial statements which include financial results
for the relevant Bonus Period and shall be prorated for any
Bonus Period in which Employee is employed less than the full
Bonus Period; provided, however, that no proration with
respect to any bonus shall be payable for any Bonus Period
during the term of this Agreement in which Employee is
discharged for Cause (as defined in Section 7 hereof) or
Employee voluntarily terminates his employment with Employer
other than for Good Reason (as defined in Section 9 hereof).
(b) For each fiscal year of CoActive ending on
or after March 31, 2003, Employee shall be eligible to receive
a bonus in accordance with the terms and provisions of
CoActive's 2002 Management Bonus Plan attached hereto as
Exhibit B.
5. Except as specifically provided herein, all terms and
conditions of the Agreement shall remain in full force and effect, and are
hereby ratified and confirmed in all respects by Employer and Employee unless
otherwise specifically amended, waived or changed pursuant to the terms and
conditions of the Agreement. Except as specifically provided herein, this
Amendment is not a consent to any waiver or modification of any term or
condition of the Agreement.
6. In the event of any inconsistency between the terms
of this Amendment and the Agreement, this Amendment shall govern.
7. This Amendment and the rights and obligations of the
parties hereunder shall be construed in accordance with and be governed by the
laws of the State of New York, without giving effect to its conflicts of law
principles.
8. If any provision of this Amendment is determined to
be unenforceable or invalid under applicable law, such unenforceability or
invalidity shall not affect the enforceability or validity of any other
provision of this Amendment, and the parties hereto expressly agree that such
unenforceable or invalid provision shall be deemed severed from this Amendment.
9. This Amendment can not be changed or terminated
orally.
10. This Amendment may be executed in any number of
counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the date first above written.
U.S. CONCEPTS, INC.
By: /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
EXHIBIT A
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APPROVED BUDGET
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EXHIBIT B
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BONUS PLAN
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