EXHIBIT 10.5.6
TENTH AMENDMENT TO
EMPLOYMENT AGREEMENT
This Tenth Amendment to Employment Agreement (the "Tenth Amendment") is
made and entered into as of April 22, 2002, by and between XXXXXXX-XXXXXX, INC.,
a Delaware corporation (the "Company"), and XXXXXXX X. XxXXXXXX, an individual
("Employee").
RECITALS
WHEREAS, Company and Employee have entered into that certain "Employment
Agreement" dated as of August 14, 1992, as amended January 1, 1993, January 1,
1994, March 31, 1995, January 1, 1996, May 19, 1997, August 20, 1998, August 9,
1999, January 3, 2000, and October 1, 2000 (collectively, the "Agreement")
providing for the employment of Employee by Company pursuant to the terms of
such Agreement; and
WHEREAS, Company and Employee have agreed that the terms of the Employment
Agreement should be modified as set forth below.
AMENDMENT TO AGREEMENT
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereby amend the
Agreement, effective as of April 22, 2002 as follows:
1. Effective as of April 22, 2002 (but not for any calendar year or partial
fiscal year prior thereto), Section 4 (ii) of the Employment Agreement is
deleted in it entirety, and the following is inserted in lieu thereof:
"4(ii) Discretionary Bonus. In addition to the base salary provided
for above, at the discretion of the Company, Employee may receive with
respect to each fiscal year (or portion thereof) during the term of this
Agreement, a discretionary bonus in an amount determined in the sole and
absolute discretion of the Compensation and Stock Option Committees of the
Board of Directors."
2. A new Section 4 (iv) is added as follows:
4 (iv) A one-time grant of Restricted Stock of one million (1,000,000)
shares of Xxxxxxx-Xxxxxx, Inc. common stock shall be granted to Employee
effective 4-22-02. The one million shares of restricted stock will vest
equally over the remaining eight-year term of the Agreement according to
the following schedule:
Year Ending Number of Shares Vested
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12-31-02 89,923
12-31-03 130,011
12-31-04 130,011
12-31-05 130,011
12-31-06 130,011
12-31-07 130,011
12-31-08 130,011
12-31-09 130,011
All Restricted Stock granted as detailed in 4 (iv) may be deferred in the
Company's Deferred Compensation Plan at the election of the Employee but
shall not be subject to the Company match as otherwise defined in the
Deferred Compensation Plan.
All Restricted Stock as detailed in 4 (iv) above shall vest immediately
upon any change in control of the Company. "Change in control" shall mean
the first to occur of any of the following events:
(a) Any "person" (as that term is used in Section 13 and 14 (d)(2) of
the Securities Exchange Act of 1934 ("Exchange Act")) becomes the
beneficial owner (as that term is used in Section 13 (d) of the Exchange
Act), directly or indirectly, of 50% or more of the Company's capital stock
entitled to vote in the election of directors;
(b) During any period of not more than two consecutive years, not
including any period prior to the adoption of this Amendment, individuals
who at the beginning of such period constitute the board of directors of
the Company, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in clause (a), (c), (d) or (e) of this section) whose
election by the board of directors or nomination for election by the
Company's stockholders was approved by a vote of at least three-fourths
(3/4ths) of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at least a
majority thereof;
(c) The shareholders of the Company approve any consolidation or
merger of the Company, other than a consolidation or merger of the Company
in which the holders of the common stock of the Company immediately prior
to the consolidation or merger hold more than 50% of the common stock of
the surviving corporation immediately after the consolidation or merger;
(d) The shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(e) The shareholders of the Company approve the sale or transfer of
all or substantially all of the assets of the Company to parties that are
not within a
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"controlled group of corporations" (as defined in Code Section 1563) in
which the Company is a member.
If any vesting of Restricted Stock in accordance with this Agreement
results in the imposition of federal and/or state income taxes against
Employee, then Company shall upon Employee's request loan Employee funds
sufficient to discharge the federal and/or state income tax liability when
due which arises solely from the vesting of the applicable portion of the
Restricted Stock. Employee shall be solely responsible for the payment of
any federal and state income taxes which are assessed as a result of
Employee's sale of any Restricted Stock. Any loan made by Company to
Employee under the provisions of this paragraph shall bear interest at a
variable rate equal to the prime rate of interest as published in the Wall
Street Journal from time to time during the term of the loan and the
principal balance of such loan together with accrued interest thereon shall
be due and payable in full on the fifth (5th) anniversary date of the
making of the loan by Company to Employee. Any such loan may be prepaid at
any time by Employee without penalty.
Employee shall be entitled to dilution protection as to all Restricted
Stock granted in 4 (iv) above as follows: In the event of the declaration
of a stock dividend, the declaration of an extraordinary dividend payable
in a form other than stock, a spin-off, a stock split, a recapitalization
or a similar transaction affecting the Company's outstanding securities
without receipt of consideration, any new, substituted or additional
securities or other property (including money paid other than as an
ordinary cash dividend) the number of shares of Restricted Stock shall be
increased or decreased as appropriate.
The Company shall grant to Employee his pro rata share of "New Securities"
that the Company may, from time to time, propose to issue and sell. Such
pro rata share, for purposes of this right of first offer, is the ratio of
(x) the total number of shares of Common Stock then owned by Employee
(including any Restricted Stock previously granted which has not yet
vested), and the number of shares of Common Stock then issuable upon
exercise of options or warrants held by Employee, to (y) the total number
of shares of Common Stock then outstanding, after giving effect to the
conversion of all outstanding convertible securities and the exercise of
all outstanding options and warrants. This right of first offer shall be
subject to the following provision.:
"New Securities" shall mean any capital stock of the Company whether
or not authorized on the date hereof, and rights, options, or warrants to
purchase any capital stock and securities of the Company of any type
whatsoever that are, or may become, convertible into capital stock.
2. Section 9(d) is amended such that the following is added: "In the event of
the Employee's death or disability ( to the extent he cannot provide
services to Company as chief executive officer on a continuing basis), the
Restricted Stock grant as detailed in 4 (iii) and 4 (v) will immediately
vest and be awarded to Employee's estate. If Employee's employment is
terminated for any reason, all unvested Restricted Stock
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granted to Employee and as detailed in 4 (iv) above and Restricted Stock
previously granted as detailed in 4 (iii) of the Ninth Amendment to
Employee's Employment Agreement dated October 1, 2000 shall vest
immediately upon such termination."
Subject to the foregoing, the Employment Agreement remains in full force
and effect, and Company and Employee hereby ratify and affirm the
Employment Agreement in each and every respect.
IN WITNESS WHEREOF, the undersigned have executed this Tenth Amendment as of the
date first above written.
XXXXXXX-XXXXXX, Inc.
a Delaware corporation
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Xxxxx X. Xxxxxx, Acting Secretary Xxxx X. Xxxxxx
Compensation/Stock Option Committee Chairman, Compensation/Stock
Option Committee
EMPLOYEE
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Xxxxxxx X. XxXxxxxx, Chairman Xxxxxxx Xxxx
Senior Managing Director, and
Chief Financial Office
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