Exhibit 99-7
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment is dated as of the 1st day of January, 2004, and is by and
between Xxxxx Ticonderoga Company, a Delaware corporation) the "Company") and
Xxxx X. Xxxx (the "Executive").
Background:
I. The Company and Executive entered into an Employment Agreement dated as
of January 1, 1995 (the "Agreement").
II. The initial three-year term of the Agreement expired on December 31,
1998, and the Agreement has been extended each year thereafter.
III. This Amendment was approved by the Company's Compensation Committee at
meetings held on June 15, 2004 and July 7, 2004.
IV. The purpose of this Amendment is to amend certain provisions of the
Agreement as set forth in this Amendment.
For valuable consideration, the Company and the Executive agree as follows.
1. Background Statements. The background statements set forth above are
true and correct and are incorporated herein by reference.
2. Amendment to Section 1. Section 1 of the Agreement is amended to read in
its entirety as follows:
"1. Term. The employment of the Executive by the Company under the terms of this
Agreement shall commence as of January 1, 2004 and will continue until December
31, 2006, unless further extended or sooner terminated as hereinafter provided.
On December 31, 2006, and on the last day of the same month each year
thereafter, the term of the Executive's employment hereunder shall be
automatically extended one additional year unless, prior to such date, the
Company shall have delivered to the Executive or the Executive shall have
delivered to the Company written notice that the term of the Executive's
employment hereunder will not be extended."
3. Amendment to Section 2. Section 2 of the Agreement is amended to read in
its entirety as follows:
"2. Position and Duties The Executive shall serve as President and Co-Chief
Executive Officer of the Company and shall have such responsibilities and
authority as may from time to time be assigned to the Executive by the Board.
The Executive shall devote substantially all his working time and efforts to the
business and affairs of the Company."
4. Amendment to Section 4(a). Section (4)(a) of the Agreement is amended to
change the Executive's salary as provided for therein to $278,000 per annum.
Otherwise Section 4(a) of the Agreement is not amended.
5. Amendment to Definition of "Change in Control." The third paragraph of
Section 5(d) of the Agreement is amended to read in its entirety as follows:
"For purposes of this Agreement, a "Change in Control" shall be deemed to occur
on the occurrence of any of the following events:
(1) The acquisition by an entity, person or group (including any
Affiliates or Associates of such entity, person or group) of beneficial
ownership, as that term is defined in Rule 13d-3 under the Securities Exchange
Act of 1934, of capital stock of the Company entitled to exercise more than 50%
of the outstanding voting power of all capital stock of the Company entitled to
vote in elections of directors ("Voting Power);
(2) The effective time of (I) a merger or consolidation of the
Company with one or more other corporations as a result of which the holders of
the outstanding Voting Power of the Company immediately prior to such merger or
consolidation (other than the surviving or resulting corporation or any
Affiliate or Associate thereof) hold less than 50% of the Voting Power of the
surviving or resulting corporation, or (II) the sale, lease, transfer, license,
conveyance or other disposition through one transaction or a series of related
transactions of a Substantial Portion of the Property of the Company other to an
entity of which the Company owns at lease an 50% of the Voting Power, or the
last of any series of transfers that results in such conveyance, or (III) a
transfer of a majority of the Voting Power, other than to an entity of which the
company owns at least 50% of the Voting Power. The term "Substantial Portion"
means 75% or more of the aggregate book value of the assets of the Company and
its Affiliates and Associates (for purposes of subparagraphs d(l) and d(2), the
terms "affiliates" and "associates" shall have the same meanings as those terms
are defined in Section 12b-2 under the Securities and Exchange Act of 1934); or
(3) The election to the Board of Directors of the Company of
directors constituting a majority of the number of directors of the Company then
in office.
6. Amendment to Section 5(f). Section 5(f) of the Agreement is amended to
read in its entirety as follows:
"(f) Date of Termination. Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if the
Executive's employment is terminated pursuant to subsection (b) above, 30 days
after Notice of Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such 30
day period), (iii) if the Executive's employment is terminated pursuant to
subsection (e) above, the date specified in the Notice of Termination, and (iv)
if the Executive's employment is terminated for any other reason, the date on
which the Notice of Termination is given; provided that if within 30 days after
any Notice of Termination is given the party receiving such Notice of
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Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date such dispute is finally
determined, either by mutual written agreement of the parties, by a binding and
final arbitration award, or by a final judgment, order, or decree of a court of
competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been perfected)."
7. Amendments to Sections 6(a), (c), and (d). Sections 6(a), 6(c), and 6(d)
of the Agreement are amended to read in their entirety as follows:
"(a) Salary During Disability. During any period that the Executive fails to
perform his duties hereunder as a result of incapacity due to physical or mental
illness ("disability period") , the Executive shall continue to receive his full
salary, benefits and other compensation at the rate then in effect for such
period until his employment is terminated pursuant to Section 5(b) hereof,
provided that payments so made to the Executive during the first 180 days of the
disability period shall be reduced by the sum of the amounts, if any, payable to
the Executive at or prior to the time of any such payment under disability
benefit plans of the Company and which were not previously applied to reduce any
such payment."
"(c) Compensation Upon Termination for Cause. Except as provided for in the last
paragraph of Section 6(d) hereof, if the Executive's employment shall be
terminated for Cause, the Company shall pay the Executive his full salary,
benefits and other compensation through the Date of Termination at the rate in
effect at the time Notice of Termination is given and the Company shall have no
further obligations to the Executive under this Agreement."
"(d) Compensation Upon Termination for Company's Breach of Agreement or For Good
Reason. If (A), the Company shall terminate the Executive's employment other
than pursuant to Section 5(b) or 5(c) hereof or (B) the Executive shall
terminate his employment for Good Reason, then
(i) the Company shall pay the Executive his full salary, benefits
and other compensation through the Date of Termination at the rate in effect at
the time Notice of Termination is given;
(ii) in lieu of any further payments of salary to the Executive
for periods subsequent to the Date of Termination, the Company shall pay as
severance pay to the Executive an amount equal to the product of (A) the
Executive's annual salary rate in effect as of the Date of Termination,
multiplied by the number two, such payment to be made (X) if resulting from a
termination after a Change in Control of the Company, in a lump sum on or before
the fifth day following the Date of Termination, or (Y) if resulting from a
termination other than after a Change in Control, in substantially equal
semimonthly installments on the fifteenth and last days of each month commencing
with the month in which the Date of Termination occurs and continuing for six
months; and
(iii) the Company shall pay the Executive's Bonus for the year in
which such termination takes place. For purposes of this paragraph 6(d)(iii),
the term "Bonus" shall mean the amount determined by multiplying the Executive's
base salary at the rate in effect at the time Notice of Termination is given by
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a percentage that is the average percentage of base salary that was paid (or
payable) to the Executive as a bonus under any Company bonus plan or
arrangement, for the three full fiscal years of the Company immediately
preceding the delivery of the Notice of Termination.
Notwithstanding anything to the contrary contained in this Agreement, if
Executive terminates his employment within six months after a Change in Control
without a Good Reason other than the Change in Control, the Company shall only
pay Executive his full salary, benefits and other compensation through the Date
of Termination at the rate in effect at the time Notice of Termination is
given."
9. Miscellaneous. The words "Chairman of the Board" are substituted for the
word "President" in Section 12 of the Agreement.
10. New Section 15. New Section 15 is added to the Agreement as follows:
"15. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters set forth herein
and supersedes any and all prior agreements, arrangements and understandings
among the parties."
11. New Section 16. New Section 16 is added to the Agreement as follows:
"16. No Mitigation of Damages; Payments. All amounts payable pursuant to this
Agreement shall be paid without reduction regardless of any amounts of salary,
compensation or other amounts which may be paid or payable to the Executive from
any source or which the Executive could have obtained upon seeking other
employment; provided that the Company shall be permitted to make all payments
pursuant to this Agreement net of any tax and other legally required
withholdings. The Executive shall not be required to mitigate the Company's
damages or seek other employment, and there shall be no offset to amounts due
hereunder as a result of any salary, compensation or other amounts the Executive
may be paid from other sources. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others."
12. New Section 17. New Section 17 is added to the Agreement as follows:
"17. Legal Action. Should the Company or the Executive institute legal action,
whether at law or in equity, to enforce any provision of the Agreement, the
prevailing party shall be entitled to receive from the other party all costs and
reasonable attorney's fees, including, but not limited to, fees for trial and
appeals or other legal proceedings."
13. Effect of Amendment. Except as amended hereby, all terms of the
Agreement remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Addendum as of the date
and year first above written.
XXXXX TICONDEROGA COMPANY,
a Delaware corporation
By: /s/ Xxxx X. Xxxx
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As its: Chairman and Co-CEO
Executive
/s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
