EXHIBIT 10.1
WAIVER OF CERTAIN PAYMENTS UNDER
EMPLOYMENT AGREEMENT
Waiver (this "Waiver") of certain payments under the employment
agreement (the "Employment Agreement") dated as of August 3, 2003, between Xxxxx
Xxxxxxxx Corporation, a British Virgin Islands corporation (together with its
successors and assigns, "THC"), Xxxxx Xxxxxxxx U.S.A., Inc. (together with its
successors and assigns, "THUSA"), a wholly owned subsidiary of THC, and Xxxxx X.
Xxxx (the "Executive"). All capitalized terms used in this Waiver and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Employment Agreement.
1. Pursuant to Section 11(i) of the Employment Agreement, the Executive
hereby affirms his waiver of certain payments under the Employment Agreement,
subject to the conditions set forth in paragraphs 3 and 4 below, as follows:
A. BASE SALARY. Effective as of September 30, 2004, the
Executive waived the increase in his base salary that would have been payable to
him under Section 1(b)(ii) of the Employment Agreement commencing as of October
1, 2004 and October 1, 2005, respectively, for the two years ended September 30,
2006. For purposes of clarity, the Annual Base Salary Rate would have increased
to $1,287,500 as of October 1, 2004 and to $1,339,000 as of October 1, 2005
absent such waiver (the amount of Base Salary that the Executive has waived
through the Date of Termination (as defined under Section 1(d)(i) of the
Employment Agreement) (but only until September 30, 2006) is hereinafter
referred to as the "Base Salary Waived Amount").
B. BONUS. Effective as of September 30, 2004, the Executive
waived a portion of the Annual Bonus that would have been payable to him under
Section 1(b)(iii) of the Employment Agreement for the fiscal year of THUSA ended
March 31, 2005. For purposes of clarity, the amount of Annual Bonus that the
Executive waived for such fiscal year is $125,000 (such amount, the "Bonus
Waived Amount").
2. FUTURE PERIODS. The Executive, at his discretion, may waive future
increases in his Base Salary with respect to periods from and after October 1,
2006, and may waive all or a portion of the Annual Bonus with respect to fiscal
years ending on and after March 31, 2006, at such time(s), and in such
manner(s), as are acceptable to the parties hereto (the aggregate amount of Base
Salary and/or Annual Bonus, if any, that the Executive may waive in the future
(such amount to be determined through the Date of Termination) is hereinafter
referred to as the "Future Waived Amount"). In the event the Executive does not
waive the increase in his Base Salary that would otherwise be made as of October
1, 2006, the Executive's Annual Base Salary Rate for the periods beginning on
and after October 1, 2006 shall be the amount that would have been payable to
the Executive pursuant to Section 1(b)(ii) of the Employment Agreement,
disregarding, for this purpose, this Waiver.
3. EFFECT OF A SEPARATION UNDER CERTAIN CIRCUMSTANCES. The Executive
has made, or in the future may make, the waivers of Base Salary and Annual Bonus
as described in paragraphs 1 and 2 of this Waiver, subject to the conditions set
forth in paragraphs 3 and 4 hereof.
In the event that there occurs a Separation under the Employment
Agreement, and as a result of such Separation the Executive shall be entitled to
receive a "Severance Payment" as defined under Section 1(d)(v)(B), then the
following shall occur:
A. The Executive shall receive, in addition to the Severance
Payment, a lump sum payment within five days after the Date of Termination equal
to the sum of: (i) the Base Salary Waived Amount, (ii) the Bonus Waived Amount,
and (iii) the Future Waived Amount, if any; provided, however, that if such
Separation occurred following or in connection with a Change of Control, the
amounts described in this Section 3A shall not be payable to the Executive, and
B. For purposes of calculating the Severance Payment and all
other amounts that are payable to the Executive in connection with such
Separation, the Annual Base Salary Rate shall be deemed to be the amount that
otherwise would have been payable to the Executive under Section 1(b)(ii) of the
Employment Agreement, disregarding this Waiver.
4. TAX PROTECTION OF THE EXECUTIVE UNDER CERTAIN CIRCUMSTANCES. The
Company shall promptly pay the Executive an amount which, after all taxes
thereon, provides the Executive with an amount equal to all Federal, state and
local income and other taxes he incurs (including any interest and penalties) if
one or both of the following circumstances occur:
A. All or any part of the salary and bonus amounts waived
pursuant to paragraphs 1 and 2 above, notwithstanding such waiver, result in any
Federal, state or local income or other taxes (including any interest and
penalties) other than taxes resulting from payment of such salary and bonus
amounts in connection with a Separation.
B. All or any part of the salary and bonus amounts waived
pursuant to paragraphs 1 and 2 above are treated as non-qualified deferred
compensation within the meaning of Section 409A of the Internal Revenue Code.
* * * * * * *
Except as modified by this Waiver, the Employment Agreement
remains in full force and effect.
2
IN WITNESS WHEREOF, the Executive has caused this Waiver to be duly
executed as of August 10, 2005.
XXXXX X. XXXX
/s/ Xxxxx X. Xxxx
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Understood and Acknowledged:
XXXXX XXXXXXXX CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President - General Counsel
XXXXX XXXXXXXX U.S.A., INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Executive Vice President - General Counsel
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