Exhibit 10.1
May 14, 1998
Xx. Xxxxxxx X. Xxxx
President and CEO
0000 Xxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
Re: Amendment to Bonus Agreement between InnoServ Technologies, Inc. (the
"Company") and Xxxxxxx X. Xxxx (the "Executive") dated December 20,
1996, as amended (the "Bonus Agreement") and to Employment Offer
Agreement between the Company and the Executive dated December 8, 1995
(the "Offer Agreement," and together with the Bonus Agreement, the
"Agreements").
Dear Xxxx:
The Company is currently engaged in discussions with General Electric Company
("GE") concerning a possible merger of the Company with an indirect,
wholly-owned subsidiary of GE. As part of such discussions, GE has requested
that certain provisions in the Agreements be amended. This Letter Agreement
is to confirm our understanding and agreement with respect to the following
amendments, which amendments shall be effective only upon occurrence of the
effective date (the "Effective Date") of the aforementioned merger:
AMENDMENT TO BONUS AGREEMENT:
1. The first sentence of Paragraph 1.a. is hereby deleted in its entirety
and the following inserted in place thereof:
"If Executive is a full-time employee of the Company in good
standing on the closing of a Sale of the Company (as defined in
paragraph 3 below), then Executive will be entitled to a one-time
bonus of $307,500, less all applicable withholdings (the "Bonus").
AMENDMENT TO OFFER AGREEMENT:
1. The first two sentences of the second paragraph on page 2 are hereby
deleted and the following inserted in place thereof:
"The Company may, at any time and for any reason, terminate your
employment without any liability to you whatsoever except as expressly
provided in this letter. If your employment is terminated by the
Company for any reason other than for cause (which shall mean for all
purposes herein fraud, dishonesty or willful misconduct), the Company
will pay to you, within 5 business days after the date of such
termination, a lump sum payment equal to the pro rata
17
portion of your base salary (as set forth in the first sentence of
the second paragraph of this letter) (a) for the period beginning on
the date of such termination and ending on the twenty month
anniversary of the Effective Date if such termination occurs on or
before the eight month anniversary of the Effective Date; or (b) for
the period beginning on the date of such termination and ending on the
first year anniversary of such termination if such termination occurs
after the eight month anniversary of the Effective Date. If at any
time following the 60th day after the Effective Date, you choose
voluntarily to terminate your employment, the Company will pay to you,
within 5 business days after the date of such termination, a lump sum
payment equal to the pro rata portion of your base salary (as set
forth in the first sentence of the second paragraph of this letter)
for the period beginning on the date of such termination and ending
on first year anniversary of such termination."
3. The first, second and third sentences of the third paragraph on page 2
are hereby deleted and the following inserted in place thereof:
"Furthermore, if (a) at any time after the Effective Date and
before the eight month anniversary of the Effective Date, the Company
terminates your employment other than for cause or (b) if at any time
following the 60th day after the Effective Date and before the eight
month anniversary of the Effective Date you choose to voluntarily
terminate your employment, the Company will pay to you, within 5
business days after the date of such termination, a lump sum payment
equal to $42,000."
AMENDMENT APPLICABLE TO BOTH AGREEMENTS:
4. Notwithstanding anything to the contrary in the Agreements (as amended
by this Letter Agreement), any and all payments to the Executive under
the Agreements (as modified by this Letter Agreement), shall be
reduced (but not below zero) so that the present value, as determined
in accordance with Section 280G(d)(4) of the Internal Revenue Code of
1986, as amended (the "Code"), of such payments plus any other
payments that must be taken into account for purposes of any
computation relating to the Executive under Section 280G(b)(2)(A)(ii)
of the Code, shall not in the aggregate, exceed 2.99 times the
Executive's "base amount", as such term is defined in Section
280G(b)(3) of the Code. The Company and the Executive agree that the
Executive's "base amount" for these purposes equals $251,606.
Notwithstanding any other provision hereof, no reduction in payments
under the limitation contained in the immediately preceding sentence
shall be applied to payments hereunder which do not constitute "excess
parachute payments" within the meaning of the Code. Any payments in
excess of the limitation of this Section 4 or otherwise determined to
be "excess parachute payments" made to the Executive hereunder shall
constitute a loan from the Company to the Executive, resulting in an
amount owing from the Executive to the Company with interest from the
date of receipt by the Executive to the date of repayment (or offset)
at the applicable federal rate under Section 1274(d) of the Code,
compounded semi-annually, which shall be payable to the Company upon
demand. It is the Company's intent not to make any payments to the
Executive that constitute "excess parachute payments" under Section
280G of the Code, and this Section 4 shall be construed strictly in
favor of such intent.
If the foregoing accurately sets forth the principal terms of our mutual
intentions and understandings with respect to these amendments to the
Agreements, please execute and return an copy of this Letter Agreement.
18
Sincerely yours,
InnoServ Technologies, Inc.
By: /s/ XXXXXX XXXXX
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Chairman of the Board
CONFIRMED, ACKNOWLEDGED AND AGREED
ON THIS 15th DAY OF MAY, 1998.
/s/ XXXXXXX X. XXXX
----------------------------------------
Xxxxxxx X. Xxxx
19
