TWELFTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS TWELFTH AMENDMENT TO EMPLOYMENT AGREEMENT is made effective the 6th day of
January, 2003, by and between XXXXXXX COMPUTER RESOURCES, INC., a Delaware
corporation ("Company") and XXXXX X. XXXXXXX, XX (the "Executive").
WHEREAS, on the 12th day of March, 1992, Company and Executive executed an
Employment Agreement ("Agreement") that became effective on the date of the
closing of the initial public offering of the Company (April 10, 1992);
WHEREAS, Company and Executive entered into an Amendment to Employment Agreement
effective July 6, 1993;
WHEREAS, Company and Executive entered into a Second Amendment to Employment
Agreement effective October 14, 1993;
WHEREAS, Company and Executive entered into a Third Amendment to Employment
Agreement effective January 6, 1995;
WHEREAS, Company and Executive entered into a Fourth Amendment to Employment
Agreement effective for the fiscal year ending January 5, 1996;
WHEREAS, Company and Executive entered into a Fifth Amendment to Employment
Agreement effective January 6, 1996;
WHEREAS, Company and Executive entered into a Sixth Amendment to Employment
Agreement effective January 6, 1997;
WHEREAS, Company and Executive entered into a Seventh Amendment to Employment
Agreement effective January 6, 1998;
WHEREAS, Company and Executive entered into an Eighth Amendment to Employment
Agreement effective January 6, 1999;
WHEREAS, Company and Executive entered into a Ninth Amendment to Employment
Agreement effective January 6, 2000;
WHEREAS, Company and Executive entered into a Tenth Amendment to Employment
Agreement effective January 6, 2001;
WHEREAS, Company and Executive entered into an Eleventh Amendment to Employment
Agreement effective January 6, 2002; and
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WHEREAS, Company and Executive desire to amend the Agreement, as amended, to
reflect certain changes agreed upon by Company and Executive regarding
compensation payable to Executive for the 2003 fiscal year and thereafter.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Section 5(a)(iii) shall be amended as follows:
(iii) During the Companys 2003 fiscal year, Executive shall be paid at
the annual rate of Five Hundred Seventy Thousand Dollars
($570,000.00). This rate shall continue for each subsequent year
of the Agreement unless modified by the compensation committee as
provided in Section 5(a)(iv).
2. Section 5(b)(i) is amended commencing with the 2003 fiscal year as follows:
(i) Executive shall be entitled to a bonus and non-qualified stock option
award for the 2003 fiscal year in the event Employee satisfies the
applicable criteria set forth below of the income from operations (as
defined) of the Company for 2003, as follows:
(i) Income from operations greater than $26,000,000.00 but less than
or equal to $27,500,000.00 = $150,000.00 cash bonus and 75,000
non-qualified stock options;
(ii) Income from operations greater than $27,500,000.00 but less than
or equal to $29,000,000.00 = $250,000.00 cash bonus and 100,000
non-qualified stock options;
(iii) Income from operations greater than $29,000,000.00 but less than
or equal to $30,500,000.00 = $350,000.00 cash bonus and 125,000
non-qualified stock options;
(iv) Income from operations greater than $30,500,000.00 = $500,000.00
cash bonus and 150,000 non-qualified stock options.
Within thirty (30) days of the conclusion of the 2003 fiscal year of the
Company and each fiscal year thereafter, Executive 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
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Executive for such year. Such bonus and non-qualified stock option awards
for each subsequent year of this Agreement shall be consistent with
Executive'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).
For purposes of this Agreement, the term income from operations shall be
computed without respect to the bonus payable to the Executive pursuant to
this Section 5(b)(i), 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) and shall exclude any extraordinary one-time
charges made by Company during said fiscal year. 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 Executive
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
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 2003 fiscal year a
company that had gross revenues in excess of $100,000,000 for its most
recently concluded fiscal year, Company and Executive shall in good faith
determine whether any adjustments to the income from operations
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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.
3. Section 5.8 is amended by deleting the following language therefrom:
"In addition, Company agrees to enter into a split dollar
agreement with Executive and the trustee of his irrevocable trust
agreement whereunder Company shall pay all premiums on a
whole-life policy(ies) on the life of Executive in the amount of
$2 million less the reportable economic benefit, provided he is
insurable at standard rates."
4. Section 19 shall be amended by adding at the end of such section, the
following language:
Executive shall be awarded, effective January 6, 2003, 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 6,
2003. Such option shall be awarded Executive by Company pursuant
to the terms of the Award Agreement, which is attached hereto and
incorporated herein 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 Twelfth Amendment to Employment Agreement has been
executed as of the day and year first above written.
WITNESSES: XXXXXXX COMPUTER
RESOURCES, INC.
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By:
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XXXXX X. XXXXXXX, XX, Executive
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