XXXXXXX IT SOLUTIONS, INC.
FIRST AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This First Amendment To Amended And Restated Employment Agreement is made
effective as of the 6th day of January, 2004, by and between Xxxxxxx IT
Solutions, Inc., a Delaware corporation ("Company") and Xxxxxxx X. Xxxxxxx
("Executive").
WHEREAS, on the ____ day of November, 2003, Company and Executive entered
into an Amended and Restated Employment Agreement; and
WHEREAS, Company and Executive desire to amend the agreement, to reflect
certain changes agreed upon by Company and Executive regarding compensation
payable to Executive for the 2004 fiscal year of Company.
NOW THEREFORE, in consideration of the foregoing premises, and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. Sections 5(b) and 5(c) are amended to set forth the following
criteria, for the 2004 fiscal year bonus plan for Executive as follows:
(b) Annual Bonus. Executive shall be entitled to a bonus and
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non-qualified stock option award for the 2004 fiscal year in the event
Executive satisfies the applicable criteria set forth below of the
Company's Gross Sales and the Company's Net Profit Before Taxes Margin
("NPBT Margin") (as hereinafter defined) of the Company for 2004, as
follows:
(i) Gross Sales of Company greater than $645,000,000.00 but less
than or equal to $680,000,000.00 with a NPBT Margin greater
than 2.7% but less than or equal to 3% equals $300,000.00
cash bonus and 50,000 non-qualified stock options;
(ii) Gross Sales of Company greater than $645,000,000.00 but less
than or equal to $700,000,000.00 with a NPBT Margin of
greater than 3% equals $500,000,000.00 cash bonus and
100,000 non-qualified stock options;
(iii)Gross Sales of Company greater than $680,000,000.00 but less
than or equal to $700,000,000.00 with a NPBT Margin greater
than 2.7% but less than or equal to 3% equals $400,000.00
cash bonus and 75,000 non-qualified stock options;
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(iv) Gross Sales of Company greater than $700,000,000.00 with a
NPBT Margin greater than 2.5% but less than or equal to 2.7%
equals $500,000.00 cash bonus and 75,000 non-qualified stock
options;
(v) Gross Sales of Company greater than $700,000,000.00 with a
NPBT Margin greater than 2.7% but less than or equal to 3%
equals $600,000.00 cash bonus and 100,000 non-qualified
stock options; and
(vi) Gross Sales of Company greater than $700,000,000.00 with a
NPBT Margin greater than 3% equals $800,000.00 cash bonus
and 125,000 non-qualified stock options.
(c) Annual Bonus Determination. Within thirty (30) days of the
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conclusion of the 2004 fiscal year of the Company and each fiscal year
thereafter, Executive and Company shall agree upon the threshold of Gross
Sales and Net Profit Before Taxes Margin or any other performance-related
criteria to be utilized for determining any bonus and non-qualified stock
options to be awarded to Executive for such year. Such bonus and
non-qualified stock option awards for each subsequent year of this
Employment Agreement shall be consistent with Executive's prior plan.
Any award of stock options to acquire the common stock of Company
shall be at the fair market value of such common stock as of the applicable
date. For purposes of this Employment Agreement, the fair market value as
of the applicable date shall mean with respect to 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).
For purposes of this section, the term "Gross Sales" shall mean the
gross sales of equipment and software and services by Company during the
applicable period on a consolidated basis. In making such Gross Sales
determination, all gains and losses realized on the sale or other
disposition of Company assets not in the ordinary course of business shall
be excluded; all refunds, returns or rebates which are made during such
period shall be subtracted along with all accounts receivable derived from
such sales that are written off during such period in accordance with the
Company's accounting system.
For purposes of this Agreement, the "NPBT Margin" shall be the Net
Profit Before Taxes of Company on a consolidated basis divided by its Gross
Sales. For purposes of this Agreement, the NPBT Margin shall be
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computed without regard to the bonus payable to Executive pursuant to
Section 5(b) or any bonus payable to Xxxxx X. Xxxxxxx, XX under the terms
of his Employment Agreement, shall exclude any gains or losses realized by
Company on the sale or other disposition of its assets other than in the
ordinary course of business (and shall exclude any extraordinary one-time
charges made by Company during such fiscal year). Such Gross Sales and NPBT
Margin shall be determined on a consolidated basis by the independent
accountant regularly retained by the Company, subject to the foregoing
provisions of this subparagraph and 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 on all parties hereto. In the event the audited financial
statements are not issued within such ninety (90) day period, Company shall
make the payment due hereunder, if any, based on its best reasonable
estimate of any liability hereunder, which amount shall be recorded and
shall be reconciled by both parties once the audited financial statements
are issued. Company shall have the ability to advance amounts to Executive
based upon 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
Executive 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 Executive shall be paid
within ninety (90) days following the end of the fiscal year of the
Company.
In the event that Company would acquire during its 2004 fiscal year a
company that had gross revenues in excess of $100,000,000.00 for its most
recently concluded fiscal year, Company and Executive shall in good faith
determine whether any adjustments to the Gross Sales and NPBT Margin
criteria set forth above, whether upward or downward, shall be made in
order to reflect the effect of such acquisition on the operations of the
Company.
Except as modified above, the terms of the Amended and Restated Employment
Agreement, as amended are hereby affirmed and ratified by the parties.
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IN WITNESS WHEREOF, this First Amendment To Amended And Restated Employment
Agreement has been executed as of the day and year first above written.
WITNESSES: XXXXXXX IT SOLUTIONS, INC.
_______________________
_______________________ By: ________________________________
_______________________ ____________________________________
Xxxxxxx X. Xxxxxxx
_______________________
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