EXHIBIT 10.05
AMENDMENTS NO. 1, 2 AND 3 TO EMPLOYMENT AGREEMENT
OF ▇▇▇▇▇▇ ▇▇▇▇▇
AMENDMENT NO.1 TO AMENDED EMPLOYMENT AGREEMENT
This Amendment No.1 to that certain Employment Agreement (this
"Amendment"), dated as of May 1, 1998, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇, Ltd., a New
York company (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S E T H :
- - - - - - - - -
WHEREAS, the Company and the Executive are parties to that certain
Employment Agreement dated as of July 1, 1996, a copy of which is attached
hereto as Exhibit A (the "Existing Agreement"); and
WHEREAS, the Executive and the Company desire to amend the Existing
Agreement to reflect the foregoing.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
1. Effective as of the date hereof, the Existing Agreement is
hereby amended as follows:
A. Section 3 shall be amended by deleting the words, "thirty
six (36) months" and inserting in lieu thereof the words, "sixty (60) months."
B. Section 4.4 shall be amended by adding the following
sentence at the end of such section:
In addition, Executive shall be entitled to be reimbursed for
expenses incurred by Executive in connection with the
operation of an automobile in an amount not to exceed $800 per
month.
C. Section 6 shall be amended by adding the following
paragraph after Section 6(b):
(c) If a Change of Control (as defined below) occurs without
Executive's prior written consent, Executive shall have the
right to terminate this Agreement. At least ten (10) days
prior to any such proposed Change of Control, the Company
shall notify the Executive of its intention to effect such
Change of Control, and the Executive shall thereupon have five
(5) days from the actual receipt of such notice to give notice
of her intention to terminate this Agreement in the event of
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the Change of Control. If, notwithstanding such notice by the
Executive, the Company proceeds with such Change of Control,
this Agreement shall be deemed terminated as of the effective
date of the event constituting the Change of Control and the
Executive shall have the right to receive the payments set
forth in Section 7(c) below.
As used herein, the term "Change of Control" shall mean: (i)
when any "person" as defined in Section 3(a)(9) of the
Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and as used in Section 13(d) and 14(d) thereof,
including a "group" as defined in Section 13(d) of the
Exchange Act, but excluding the Company or any subsidiary or
any affiliate of the Company or any employee benefit plan
sponsored or maintained by the Company or any subsidiary of
the Company (including any trustee of such plan acting as
trustee), becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities; or (ii) when, during
any period of twenty-four (24) consecutive months, the
individuals who, at the beginning of such period, constitute
the Board of Directors (the "Incumbent Directors") cease for
any reason other than death to constitute at least a majority
thereof, provided, however, that a director who was not a
director at the beginning of such 24-month period shall be
deemed to have satisfied such 24-month requirement (and be an
Incumbent Director) if such director was elected by, or on the
recommendation of or with the approval of, at least two-thirds
of the directors who then qualified as Incumbent Directors
either actually (because they were directors at the beginning
of such 24-month period) or through the operation of this
proviso; or (iii) the occurrence of a transaction requiring
stockholder approval for the acquisition of the Company by an
entity other than the Company or a subsidiary or an affiliated
company of the Company through purchase of assets, or by
merger, or otherwise.
D. Section 7 shall be amended by adding the following
paragraph after Section 7(b):
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(c) In the event that a Change of Control occurs without the
Executive's prior written consent thereto, the Executive shall
be entitled to receive in cash, within ten (10) days of
termination, (i) the Expense Reimbursement Amount, (ii) the
Unpaid Salary Amount, (iii) an amount equal to the greater of
(x) the balance of the Executive's salary that would have been
paid by Company pursuant to Section 4.1 hereof over the full
Term of this Agreement if the Agreement had not been
terminated and (y) the Base Salary for the two years
immediately following such change of control , and (iv) an
amount equal to Executive's bonus, if any, for the preceding
12-month period ended August 31, multiplied by the remaining
years (including any fractional years) left under this
Agreement since the date such bonus was determined by the
Board of Directors. In the event that any payment (or portion
thereof) to Executive under this Section 7 is determined to
constitute an "excess parachute payment," under Sections 280G
and 4999 of the Internal Revenue Code of 1986, as amended, the
following calculations shall be made:
(i) the after-tax value to Executive of the payments under
this Section 7(c) without any reduction; and
(ii) the after-tax value to Executive of the payments under
this Section 7(c) as reduced to the maximum amount (the
"Maximum Amount") which may be paid to Executive without any
portion of the payments consulting an "excess parachute
payment".
If, after applying the agreed upon calculations set forth
above, it is determined that the after-tax value determined
under clause (ii) above is greater that the after-tax value
determined under clause (i) above, the payments to Executive
under this Section 7 shall be reduced to the Maximum Amount.
2. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
3. Except as otherwise specifically set forth herein, all of the
terms and provisions of the Existing Agreement shall remain in full force and
effect.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board,
Chief Executive Officer and
President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
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AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
This Amendment No. 2 dated as of March 15, 1999 to that certain
Employment Agreement (this "Amendment"), by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇, Ltd., a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company and the Executive are parties to that certain
Employment Agreement dated as of July 1, 1996, a copy of which is attached
hereto as Exhibit A (the "Original Agreement"); and
WHEREAS, the Company and the Executive amended the Original Agreement
as of May 1, 1998 by executing Amendment No. 1 thereto (as amended, the
"Existing Agreement"); and
WHEREAS, the Executive and the Company desire to amend the Existing
Agreement to reflect the foregoing.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
1. Effective as of the date hereof, the Existing Agreement is
hereby amended as follows:
A. see attached; provided however, that commencing on July 1,
1999, the Base Salary shall be subject to an increase of 5% per annum.
B. Section 4.3(b) shall be deleted in its entirety and the
following paragraph shall be substituted in lieu there:
Effective July 1, 1999, on each August 30th during the Term
the Executive shall be entitled to receive options (the
"Option Bonus') to purchase a number of shares of Common Stock
equal to one half (1/2) to the dollar amount of the Cash Bonus
(i.e. if the cash bonus equals $120,000, then the Executive
shall receive an option 60,000 shares of Common Stock). The
options comprising the Option Bonus shall vest quarterly over
a one (1) year period commencing on the September 30 following
the date of grant and be exercisable at a price equal to the
average closing bid price of the Company's shares of Common
Stock for the five trading days ending on the August 29th
prior to the date of grant. The Performance Options will be
substantially in the form of Exhibit B attached hereto.
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2. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
3. Except as otherwise specifically set forth herein, all of the
terms and provisions of the Existing Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman of the Board,
Chief Executive Officer and
President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT
This Amendment No. 3 dated as of November 1, 2000 to that certain
Employment Agreement (this "Amendment"), by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇, Ltd., a
Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Company and the Executive are parties to that certain
Employment Agreement dated as of July 1, 1996, a copy of which is attached
hereto as Exhibit A (the "Original Agreement"); and
WHEREAS, the Company and the Executive amended the Original Agreement
(i) as of May 1, 1998 by executing Amendment No. 1 thereto and (ii) as of March
15, 1999 by executing Amendment No. 2 thereto (as amended, the "Existing
Agreement"); and
WHEREAS, the Executive and the Company desire to amend the Existing
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto agree as follows:
1. Effective as of the date hereof, the Existing Agreement is
hereby amended as follows:
A. Section 4.3(b) shall be deleted in its entirety and in lieu
thereof the following paragraph shall be inserted:
The term of Executive's employment shall terminate on December
31, 2003, subject to earlier termination pursuant to Sections
5 and 6 hereof (the "Term").
B. The first sentence of Section 4.1 shall be deleted and in
lieu thereof the following sentence shall be inserted:
The Company shall pay to Executive an annual base salary of
(i) two hundred seventy five thousand dollars ($275,000)
through December 31, 2000, (ii) three hundred fifty thousand
dollars ($350,000) from January 1, 2001 through June 30, 2002,
and (iii) four hundred thousand dollars ($400,000) from July
1, 2002 through December 31, 2003 (the "Base Salary"), less
such deductions as shall be required to be withheld by
applicable laws and regulations.
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C. Section 4.3(a) shall be deleted in its entirety and the
following paragraph shall be inserted in lieu thereof:
During the term of this Agreement, the Executive
shall be entitled to receive a cash performance bonus based
upon the Company's consolidated earnings before the payment of
interest and taxes and deduction for depreciation ("EBIT-D")
as reflected on the Company's quarterly reports on Form 10-Q.
Commencing with the quarter ending December 31, 2000, the
Company agrees to pay to the Executive a cash bonus equal to
four percent (4%) of the amount by which EBIT-D for the most
recent fiscal quarter exceeds EBIT-D for the corresponding
fiscal quarter during the preceding year (the "Cash Bonus").
In the event that EBIT-D for the most recent fiscal quarter is
less than EBIT-D for the corresponding fiscal quarter during
the preceding year, then the Executive agrees to repay any
Cash Bonus previously paid to her after the most the recent
June 30th to the extent that the Cash Bonus previously paid to
her exceeds four percent (4%) of the amount by which aggregate
EBIT-D for the quarters ended since the most recent June 30th
exceed the aggregate EBIT-D for the corresponding fiscal
quarters during the preceding year (the "Bonus Repayment
Amount").
Within forty five (45) days following the end of each
fiscal quarter during the Term, the Company shall pay to the
Executive an amount in immediately available funds equal to
75% of the Cash Bonus (less applicable withholding taxes) and
shall retain the remainder of the Cash Bonus (the "Deferred
Cash Bonus") on behalf of the Executive. Any Bonus Repayment
Amount owed by the Executive shall be paid first from the
Deferred Cash Bonus and then from deductions from Executive's
Base Salary commencing in next quarter ending September 30th
and in an amount reasonably acceptable to the Company and the
Executive. Any Deferred Cash Bonus Amount held by the Company
after appropriate deductions for all Bonus Repayment Amounts
owed during the four quarters ending June 30th shall be paid
to the Executive by the August 15th immediately following the
applicable June 30th. To the extent that the Company shall
have withheld taxes (in connection with the payment of the
Cash Bonus) in excess of the appropriate amount as the result
of the payment by the Executive of the Bonus Repayment Amount,
the Company shall adjust Executive's tax withholding
appropriately.
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For example, if EBIT-D for the quarter ending
December 31, 2000 equals $5,000,000 and EBIT-D for the quarter
ended December 31, 1999 was $2,000,000, the Executive would be
entitled to receive a Cash Bonus equal to $120,000 ($5,000,000
- $2,000,000 = $3,000,000 x .04 = $120,000). This would result
in a payment of $90,000 (75% of $120,000) and a Deferred Cash
Bonus of $30,000 (the remaining 25% of the Cash Bonus) And, if
EBIT-D for the quarter ending March 31, 2001 equals $2,000,000
and EBIT-D for the quarter ended March 31, 2000 was
$3,000,000, the Company would be entitled to a Bonus Repayment
Amount equal to $80,000 ($7,000,000 (EBIT-D for 12/00 and
3/01) - $5,000,000 (EBIT-D for 12/99 and 3/00) = $2,000,000 x
.04 = a Cash Bonus of $80,000). As a result, the Company would
be entitled to a Bonus Repayment Amount of $40,000 (the Cash
Bonus of $120,000 previously paid less the aggregate Cash
Bonus of $80,000). The Deferred Cash Bonus of $30,000 would
applied to Executive's obligation to pay the Bonus Repayment
Amount.
D. Section 3(a) shall be deleted in its entirety and the
following paragraph shall be substituted in lieu thereof:
On each August 31st during the Term (commencing on August 30,
2001), the Executive shall be entitled to receive options (the
"Performance Options") to purchase 100,000 shares of Common
Stock. The options comprising the Performance Options shall
vest quarterly over a one (1) year period commencing on the
September 30 following the date of grant and be exercisable at
a price equal to the average closing bid price of the
Company's shares of Common Stock for the five trading days
ending on the August 29th prior to the date of grant.
2. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law.
3. Except as otherwise specifically set forth herein, all of the
terms and provisions of the Existing Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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