INCENTIVE DEFERRED COMPENSATION AGREEMENT
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This Incentive Deferred Compensation Agreement is made effective this ____ day
of _________, 1999, by and between XXXXXXX COMPUTER RESOURCES, INC., a Delaware
corporation (the "Company") and XXXXXX X. XXXXXXXXX ("Xxxxxxxxx").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement, the Company and
Xxxxxxxxx have entered into an Employment Agreement for the employment of
Xxxxxxxxx by Company;
WHEREAS, pursuant to Section 5(c) of said Employment Agreement, Xxxxxxxxx may be
entitled to incentive deferred compensation in the event certain economic
criteria are satisfied;
WHEREAS, the parties wish to define the terms governing the incentive deferred
compensation in the event the economic criteria and the terms and conditions of
the Employment Agreement are satisfied.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein set forth, the parties hereby covenant and agree as follows:
1. In the event Xxxxxxxxx satisfies the economic criteria set forth in the
Employment Agreement for such year and is entitled to incentive deferred
compensation, the incentive deferred compensation shall be governed by the terms
of this Agreement.
2. In the event Xxxxxxxxx should die or become disabled during the term of
the Employment Agreement, or if the Employment Agreement is not renewed by
Company at the expiration of the initial term or any renewal term, all incentive
deferred compensation earned shall be vested in full and shall be payable to
Xxxxxxxxx and/or his designated beneficiary at that time. For purposes of this
Paragraph, the term "disabled" shall have the meaning set forth in said
Employment Agreement.
3. In the event Xxxxxxxxx discontinues employment with the Company during
the initial term or any renewal term of this Employment Agreement or if
Xxxxxxxxx does not renew the Employment Agreement at the expiration of the
initial term or any renewal term and such discontinuation of employment is not a
result of Xxxxxxxxx becoming disabled, the vested portion of his deferred
compensation account will be paid to him at said time and all non-vested amounts
will be forfeited. Provided, however, if Xxxxxxxxx would violate the terms of
his covenant not to compete and confidentiality agreement as set forth in
Sections 8 and 9 of his Employment Agreement, the vested portion of his deferred
compensation account will likewise be forfeited. The incentive deferred
compensation shall vest according to the following schedule:
1
Years of Service With Company or its Percentage of Vested
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Subsidiaries from the Effective Date Interest
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of This Agreement
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Less than 1 year 0%
One year . . . . . . . . . . . . . . 20%
Two years. . . . . . . . . . . . . . 40%
Three years. . . . . . . . . . . . . 60%
Four years . . . . . . . . . . . . . 80%
Five years . . . . . . . . . . . . . 100%
This vesting schedule shall apply separately to each year that incentive
deferred compensation is earned by Xxxxxxxxx upon the satisfaction of the
economic criteria set forth in the Employment Agreement.
By way of illustration, if Xxxxxxxxx satisfied the economic criteria for years 1
and 2 of the Agreement, at the end of year 2, Xxxxxxxxx would be 40% vested as
to the incentive deferred compensation credited in year 1 and 20% vested as to
the incentive deferred compensation credited in year 2.
4. No deferred compensation shall be paid under the terms of this Agreement
in the event Xxxxxxxxx is discharged from the service of the Company for cause.
For purposes of this Paragraph, the term "cause" shall have the meaning set
forth in Section 10(a)(iii) of said Employment Agreement
5. Xxxxxxxxx shall not have the right to commute, sell, transfer, assign or
otherwise convey the right to receive any payments under the terms of this
Agreement. Any such attempted assignment or transfer shall terminate this
Agreement and the Company shall have no further liability hereunder.
6. It is the intention of the parties that the incentive deferred
compensation to be payable to Xxxxxxxxx hereunder (if applicable) shall be
includable for Federal Income Tax purposes in his, or such beneficiary's gross
income only in the taxable year in which he or the beneficiary actually receives
the payment and Company shall be entitled to deduct such incentive deferred
compensation as a business expense in its Federal Income Tax return in the
taxable year in which such payment is made to Xxxxxxxxx or his beneficiary.
7. Nothing contained in this Agreement shall in any way affect or interfere
with the right of Xxxxxxxxx to share or participate in a retirement plan of the
Company or any profit sharing, bonus or similar plan in which he may be entitled
to share or participate as an employee of the Company.
8. This Agreement shall be binding upon the heirs, administrators,
executors, successors and assigns of Xxxxxxxxx and the successors and assigns of
Company. This Agreement shall not be modified or amended except in writing
signed by both parties.
9. This Agreement shall be subject to and construed under the laws of the
State of Ohio.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the day and year first above written.
XXXXXXX COMPUTER RESOURCES, INC.
By:___________________________________
Xxxxxxx X. Xxxxxxx, Chief Financial Officer
_____________________________________
XXXXXX X. XXXXXXXXX
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