EXHIBIT 10.45
AMENDMENT NO. 1 TO
EMPLOYMENT AGREEMENT
Agreement (this "Agreement"), dated as of July 1, 0000, xxxxxxx Xxxxx,
XxXxxx & Associates, Inc., a Delaware corporation (the "Company"), and Xxxxxxx
X. Xxxxxxxxxxx (the "Executive").
WITNESSETH
WHEREAS, the Company and the Executive are parties to an Employment
Agreement dated as of May 1, 2000 (the "Employment Agreement");
WHEREAS, capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings set forth in the Employment Agreement; and
WHEREAS, the Company and the Executive hereby desire to amend certain terms
of the Employment Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Executive
hereby agree as follows:
Section 1. Section 6(e) is hereby amended by adding the following language
after the words "change of control" at the end of the second sentence and before
the word "Notwithstanding" at the beginning of the third sentence: "In addition
to any other benefits to which Executive may be entitled in accordance with the
Company's then existing severance policies, the Company shall, for a period of
eighteen (18) months commencing upon the termination of the Executive, continue
to provide family medical and dental insurance coverage to Executive,
Executive's spouse and Executive's dependents, on the same terms and conditions
as though Executive had remained employed. In the event Executive's
participation in any medical or dental insurance plan is barred, the Company
shall arrange to provide Executive with benefits substantially equivalent to
those which Executive would otherwise have received had his participation not
been barred."
Section 2. The language currently existing as Section 10 "Assignability;
Change of Control" is hereby amended by making such language Section 10(a). The
following is to be inserted immediately following said Section 10(a) and before
Section 11:
(b) Gross-Up Payments.
(i) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any compensation, payment or distribution by
the Company to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, other than amounts payable solely under Section 4(b), but including
amounts paid under Sections 6 or 10 calculated with reference to Section 4(b),
(the "Severance Payments"), would be subject to the excise tax imposed by
Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Severance Payments, any
Federal, state, and local income tax, employment tax and Excise Tax upon the
payment provided by this subsection, and any interest and/or penalties assessed
with respect to such Excise Tax, shall be equal to the Severance Payments.
(ii) Subject to the provisions of Subparagraph 10(b)(iii), all
determinations required to be made under this Subparagraph 10(b), including
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by Xxxxxx Xxxxxxxx LLP or any other nationally recognized
accounting firm selected by the Company (the "Accounting Firm"), which shall
provide detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days of the date of the Executive's termination, if
applicable, or at such earlier time as is reasonably requested by the Company or
the Executive. For purposes of determining the amount of the Gross-Up Payment,
the Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for the
calendar year in which the Gross-Up Payment is to be made, and state and local
income taxes at the highest marginal rates of individual taxation in the state
and locality of the Executive's residence on the date of the Executive's
termination, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. The initial Gross-Up
Payment, if any, as determined pursuant to this Subparagraph 10(b)(ii), shall be
paid to the applicable tax authorities on behalf of the Executive within five
(5) days of the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, the
Company shall furnish the Executive with an opinion of counsel that failure to
report the Excise Tax on the Executive's applicable federal income tax return
would not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Company should have been made (an "Underpayment"). In the event that the
Company exhausts its remedies pursuant to Subparagraph 10(b)(iii) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred, consistent with the calculations required to be made hereunder, and
any such Underpayment, and any interest and penalties imposed on the
Underpayment and required to be paid by the
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Executive in connection with the proceedings described in Subparagraph
10(b)(iii), shall be promptly paid by the Company to or for the benefit of the
Executive.
(iii) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive knows
of such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the thirty (30) day period following the
date on which he gives such notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, provided that the Company has set aside
adequate reserves to cover the Underpayment and any interest and penalties
thereon that may accrue, the Executive shall:
(A) give the Company any information reasonably requested by the
Company relating to such claim,
(B) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company,
(C) cooperate with the Company in good faith in order effectively
to contest such claim, and
(D) permit the Company to participate in any proceedings relating
to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing
provisions of this Subparagraph 10(b)(iii), the Company shall control
all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive on
an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax,
including interest or penalties with respect thereto, imposed with
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respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issues raised by the Internal
Revenue Service or any other taxing authority.
Section 3. If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Subparagraph 10(b)(iii), the Executive
becomes entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Company's complying with the requirements of Subparagraph
10(b)(iii)) promptly pay to the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Subparagraph 10(b)(iii), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
(v) Except as expressly provided for in this Agreement, all other
provisions of the Employment Agreement shall be unaffected by this Agreement and
shall remain in full force and effect. By execution of this Agreement, the
Company shall not be deemed to have compromised or waived any of its rights
under the Employment Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and attested, all as of the day and
year first above written.
BORON, XxXXXX & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President & COO
/s/ Xxxxxxx X. Xxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxx
