EXHIBIT 10.3
AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
This AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this "Amendment")
is made as of February 16, 2006, by and among Aavid Thermal Technologies, Inc.,
a Delaware corporation (the "Company"), Aavid Thermalloy, LLC, a Delaware
limited liability company ("Subsidiary"), and Xxxxx X. Xxxxx ("Executive") and
amends certain provisions of the Executive Employment Agreement among the
Company, Subsidiary and Executive dated as of July 1, 2000 (the "Agreement").
Capitalized terms not defined in this Amendment shall have the meanings set
forth in the Agreement.
The parties desire to make certain amendments to the terms and
conditions of the Agreement. NOW, THEREFORE, the parties hereto agree as
follows:
1. Employment Period.
(a) The first sentence of Section 4(a) of the Agreement is amended and
restated to read as follows:
"The Employment Period commenced on July 1, 2000 and shall terminate on
July 1, 2008; provided that (i) the Employment Period shall terminate
prior to such date upon Executive's death or Incapacity; (ii) the
Employment Period may be terminated by the Company at any time prior to
such date with Cause or without Cause; and (iii) the Employment Period may
be terminated by Executive at any time for any reason (a "Voluntary
Termination")."
(b) The first sentence of Section 4(d) of the Agreement is amended and
restated to read as follows:
"In the event that Executive's employment is terminated by the Company
without Cause or by Executive for Good Reason, following such Termination
and upon execution by Executive of a general release on employment matters
in favor of the Company, Subsidiary and their Affiliates, in form
satisfactory to the Company, releasing any and all claims, including
claims for payments (other than those payments due under this Section 4
and Section 3(c)), due to Executive arising under or pursuant to this
Agreement against the Company, Subsidiary and their Affiliates as of the
Termination Date, the Company shall pay Executive his annual Base Salary
(as in effect on the Termination Date) and provide benefits equivalent to
those provided at the Termination Date for a period of nine months or, if
longer, until the earlier of (i) the two-year anniversary of the
Termination Date and (ii) July 1, 2008."
(c) The references in Section 7(a) and 7(b) of the Agreement to "one (1)
year thereafter" shall be amended to read "two (2) years thereafter." Executive
expressly acknowledges and agrees that he has agreed to this extension of the
Noncompete Period and the nonsolicitation period in consideration of the
additional severance benefits provided by this Amendment.
2. Extension of the Employment Period.
If (i) the Employment Period expires upon expiration of its term on July
1, 2008 (and not as a result of Executive's death, Incapacity, termination by
the Company with Cause or without Cause, or a Voluntary Termination) and (ii)
the Company has not offered to extend the Employment Period for a period of at
least nine months on substantially the same terms as contained in the Agreement
and this Amendment, then Executive shall be entitled to a severance payment, at
the time and on the terms and conditions set forth in Section 4(d) of the
Agreement (including without limitation the execution by Executive of a general
release), in an amount equal to Executive's Base Salary at July 1, 2008, along
with benefits equivalent to those provided at the Termination Date for a period
of nine months.
3. First Sale of a Subsidiary. Promptly following the sale by the Company
of either Fluent or AT (a "Sale"), then:
(a) Executive shall be paid a lump sum amount equal to 24% of his Base
Salary immediately prior to the Fluent Sale for the greater of (i)
the remainder of the Employment Period, up to a maximum of 24
months, and (ii) 9 months, and any payment due under Section 3(c)
provided that such lump sum amount shall be reduced to the extent
any acquirer in the Fluent Sale agrees to pay any compensation to
Executive as an employee.
(b) Executive will continue to serve, on a full-time basis to be agreed
upon by the Company's Chief Executive Officer, as the Chief
Financial Officer of the Company and the Subsidiary for the
remainder of the Employment Period, with a Base Salary equal to 76%
of Executive's Base Salary immediately prior to the Sale, with full
benefits as provided by the Agreement and with Bonus eligibility for
up to 30% of the reduced Base Salary.
(c) If control of the Company is transferred in connection with the
Sale, then all references in the Agreement and this Amendment to the
Company (other than in the definitions of Confidential Information
and Work Product) shall instead mean the Remaining Subsidiary, and
after consummation of such Sale the Company shall have no liability
or obligations under the Agreement or this Amendment. All provisions
of the Agreement applicable to the Subsidiary that is transferred in
the Sale (other than references in Sections 5, 6 and 7 of the
Agreement) shall terminate and cease to apply, and after
consummation of such Sale such Subsidiary shall have no liability or
obligations under the Agreement or this Amendment.
4. Sale of Remaining Subsidiary. Promptly following the sale of the
Remaining Subsidiary, Executive shall be paid a lump sum amount, in lieu of any
amounts payable under Section 4(d) of the Agreement, equal to his Base Salary
immediately prior to such sale (as reduced pursuant to Section 3 of this
Amendment) along with benefits equivalent to those provided at the time of the
Sale of the Remaining Subsidiary, and any payment due under Section 3(c) for the
greater of (i) the remainder of the Employment Period, up to a maximum of 24
months, and (ii) 9 months, provided that such amounts shall be reduced to the
extent any acquirer in such sale agrees, prior to or upon consummation of such
sale (or as a result of discussions prior to consummation of such sale),to pay
any compensation to Executive as an employee.
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5. Vacation Carryover. Section 3(c) of the Agreement is amended to provide
that the maximum amount of vacation time that Executive shall be permitted to
carry over from one year to the next shall be equal to eight weeks, and to
provide that upon the occurrence of a Sale or the sale of the Remaining
Subsidiary, to the extent Executive has accrued vacation, the Executive shall be
paid a lump sum amount for up to eight weeks accrued vacation as requested by
Executive.
6. General Provisions.
(a) Severability. Whenever possible, each provision of this Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Amendment is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Amendment shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Amendment, those documents expressly referred
to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(c) Counterparts. This Amendment may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this
Amendment shall bind and inure to the benefit of and be enforceable by
Executive, the Company, Subsidiary and their respective successors and assigns;
provided that the rights and obligations of Executive under this Amendment shall
not be assignable.
(e) GOVERNING LAW. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY AND
INTERPRETATION OF THIS AMENDMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT
THE LAW OF CONFLICTS, OF THE STATE OF NEW HAMPSHIRE.
(f) Arbitration. The parties agree that any dispute arising between or
among the parties arising out of or relating to this Amendment or its breach,
such dispute shall be settled by arbitration as provided in the Agreement.
(g) Remedies. Each of the parties to this Amendment shall be entitled to
enforce its rights under this Amendment specifically. The parties hereto agree
and acknowledge that money damages would not be an adequate remedy for any
breach of the provisions of this Amendment and that any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Amendment.
(h) Amendment and Waiver. The provisions of this Amendment may be amended
and waived only with the prior written consent of the Company and Executive.
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[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
AAVID THERMAL TECHNOLOGIES, INC.
_________________________________________
BY: Xxxxxxxx X. Xxxxx
ITS: Chief Executive Officer and President
AAVID THERMALLOY, LLC
_________________________________________
BY: Xxxxxxxx X. Xxxxx
ITS: Chief Executive Officer and President
EXECUTIVE:
_________________________________________
Xxxxx X. Xxxxx
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