XXXXXXX COMPUTER RESOURCES, INC.
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT is made as of the 6th day of
January, 2002, by and between Xxxxxxx Computer Resources, Inc., a Delaware
corporation ("Company"), and Xxxxxxx X. Xxxxxxx ("Employee").
WHEREAS, on the 6th day of January, 1999, the Company's wholly owned
subsidiary, Xxxxxxx Select Integration Solutions, Inc., and Employee executed an
Employment Agreement ("Agreement");
WHEREAS, effective September 1, 1999, Xxxxxxx Select Integration Solutions,
Inc. and Employee executed a First Amendment to Employment Agreement;
WHEREAS, Company and Employee entered into a Second Amendment to Employment
Agreement effective January 6, 2001;
WHEREAS, Company and Employee desire to amend the Agreement, as amended, to
reflect certain changes agreed upon by Company and Employee regarding
compensation payable to Employee for the 2002 fiscal year and thereafter;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. Section 5(a) shall be amended as follows:
Base Salary. During the Company's 2002 fiscal year, Employee shall be
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paid at the annual rate of Four Hundred Fifty Thousand Dollars
($450,000.00) per year. This rate shall continue for each subsequent year
of the Agreement unless modified by the Compensation Committee of the
Company.
1. Sections 5(b) and 5(c) shall be deleted in their entirety, and in lieu
thereof, the following Sections 5(b) and 5(c) are amended, commencing with the
2002 fiscal year, as follows:
2.
(b) Annual Bonus
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Employee shall be entitled to a bonus and non-qualified stock option
award for the 2002 fiscal year in the event Employee satisfies the
applicable criteria set forth below of the income from operations (as
defined) of the Company for 2002, as follows:
(i) Income from operations greater than $32,000,000.00 but less than
or equal to $34,000,000.00 = $300,000.00 cash bonus and 50,000
non-qualified stock options;
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(ii) Income from operations greater than $34,000,000.00 but less than
or equal to $36,000,000.00 = $500,000.00 cash bonus and 75,000
non-qualified stock options; or
(iii) Income from operations greater than $36,000,000.00 = $600,000.00
cash bonus and 100,000 non-qualified stock options.
(c) Annual Bonus Determination
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Within thirty (30) days of the conclusion of the 2002 fiscal year of
the Company and each fiscal year thereafter, Employee and Company shall
agree upon the threshold of operating income to be utilized for determining
any bonus and non-qualified stock options to be awarded to Employee for
such year. Such bonus and non-qualified stock option awards for each
subsequent year of this Agreement shall be consistent with Employee's prior
plan.
Any award of stock options to acquire the common stock of the Company
shall be at the fair market value of such common stock as of the applicable
date. For purposes of this Agreement, the fair market value as of the
applicable date shall mean with respect to the common shares, the average
between the high and low bid and asked prices for such shares on the over
the counter market on the last business day prior to the date on which the
value is to be determined (or the next preceding date on which sales
occurred if there were no sales on such date).
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For purposes of this Agreement, the term "income from operations"
shall be computed without respect to the bonus payable to the Employee
pursuant to this Section 5(b) and shall exclude any gains or losses
realized by the Company on the sale or other disposition of its assets
(other than in the ordinary course of business). Such income from
operations of the Company shall be determined on a consolidated basis by
the independent accountant regularly retained by the Company, subject to
the foregoing provisions of this subparagraph (i) in accordance with
generally accepted accounting principles. Said determination and payment of
such bonus shall be made within ninety (90) days following the end of the
fiscal year of the Company and the determination by the accountant shall be
final, binding and conclusive upon all parties hereto. In the event the
audited financial statements are not issued within such ninety-day period,
the Company shall make the payment due hereunder (if any) based on its best
reasonable estimate of any liability hereunder, which amount shall be
reconciled by both parties once the audited financial statements are
issued. Company shall have the ability to advance amounts to Employee based
on the projected amount of the bonus compensation to be paid hereunder. In
the event that such advance payments are in excess of the amount due
hereunder, any such excess shall be reimbursed to Company by Employee
within ninety (90) days following the end of the fiscal year. In the event
such advance payments are less than the amount of said bonus as determined
hereunder, any additional amount due Employee shall be paid within ninety
(90) days following the end of the fiscal year of the Company.
1. Section 19 shall be amended by adding at the end of such Section,
the following language:
2.
Employee shall be awarded, effective January 6, 2002, an option to
acquire fifty thousand (50,000) shares of the common stock of Company at
the fair market value of such shares on January 5, 2002. Such option shall
be awarded to Employee by Company pursuant to the terms of the Award
Agreement which is attached hereto and incorporated hereby by reference as
Exhibit A.
Except as modified above, the terms of the Employment Agreement, as
amended, are hereby affirmed and ratified by the parties.
IN WITNESS WHEREOF, this Third Amendment to Employment Agreement has been
executed as of the day and year first above written.
____________________________ XXXXXXX COMPUTER RESOURCES, INC.
____________________________ By:
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____________________________ ____________________________
Xxxxxxx X. Xxxxxxx
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