EXHIBIT 10(e)
EXTENSION OF EMPLOYMENT AGREEMENT
This extension agreement is made and entered into as of November 14, 1996,
by and between Transworld Systems Inc., a California Corporation (the "Company")
and Xxxxxx Xxxx ("Xxxx").
WHEREAS, on July 1, 1995 Xxxx entered into an Employment Agreement with the
Company, (the "Employment Agreement") to which Employment Agreement The Union
Corporation, a Delaware corporation is also a party; and
WHEREAS, Xxxx and the Company both wish to extend the Employment Agreement
for an additional one year from July 1, 1997 through June 30, 1998,
NOW THEREFORE, the parties agree as follows:
FIRST: The Employment Agreement is extended for an additional period of
one year so that the termination date as set forth in paragraph (A)(1) of
Article SECOND of the Employment Agreement shall be June 30, 1998 instead of
June 30, 1997.
SECOND: The first sentence of paragraph (B)(1) of Article THIRD is amended
to read as follows: "The Company shall also pay production/incentive bonuses to
Xxxx for each full twelve (12) month period commencing July 1, 1995, July 1,
1996, and July 1, 1997 as set forth in Schedule 1 annexed hereto."
THIRD: The references in paragraphs (B)(2), (B)(3), (E) and (F) of Article
THIRD to "June 30, 1997" are amended to read "June 30, 1998" and the references
in paragraphs (E) and (F) of Article THIRD to "June 30, 2000" are amended to
read "June 30, 2001."
FOURTH: Paragraph (A) of Article FOURTH of the Employment
Agreement is amended in full to read as follows:
"FOURTH: A. The Company has paid the premiums on a split dollar policy of
life insurance in the face amount of $2 million, with Transamerica Occidental
Life Insurance Company, Policy Number 92520289 (the "Policy"). The insureds
under this Policy are Xxxxxx Xxxx and his wife Xxxxxx Xxxx. The Policy is
currently owned as follows:
"TRANSWORLD SYSTEMS, INC. except the owner of the right to designate the
------------------------
beneficiary for any proceeds in excess of the greater of the accumulation
value or its total premiums paid on this policy from the date of issue to
the date of death of the insured, shall be XXXXXX X. XXXX."
--------------
The cost of all premiums payable on the Policy shall be borne by the Company
until the termination of Xxxx'x employment with the Company under the
circumstances set forth below. Upon termination of this Agreement on or after
June 30, 1998, or upon termination by reason of his mental or physical
incapacity as provided in paragraph (B)(2) of Article SECOND or pursuant to the
provisions of paragraph (C) of Article SECOND or paragraph (D) of Article THIRD,
the Company shall thereupon have no further obligation to pay any premiums on
the policy and cause ownership of the Policy, or any replacement policy, to be
transferred to the individual owner(s), subject only to the Company's right to
return of the premiums that the Company has paid from the proceeds of the Policy
when such proceeds are paid, or from the cash value of the Policy if it should
be cashed in before the death of the insured. The Company shall have the right
to receive reasonable assurances (including an irrevocable endorsement if
appropriate/available) from the
2
individual owner(s) that the Company will be paid such amounts. It is
acknowledged and agreed that the obligations of the Company under this paragraph
only relate to the payment of the premiums in respect of the policy and the
transfer of the ownership of the policy as provided herein. The Company shall
have no further obligations with respect to the policy and it shall be Xxxx'x
responsibility to take whatever actions may be necessary to keep the policy in
effect.
FIFTH: Paragraph (A) of Article FIFTH is clarified and amended as
follows: Xxxx hereby acknowledges that (i) all bonuses referred to in paragraph
(A) of Article FIFTH of the Employment Agreement have, as of the date of this
extension agreement, been contributed to a Rabbi Trust, and all of the amounts
of assumed interest thereon prior to the date or dates of contribution (based
upon United States Treasury obligations) have also been contributed to the Rabbi
Trust, (ii) the amount of deferred compensation hereafter due to Xxxx under
paragraph (A) of Article FIFTH of the Employment Agreement shall be based upon
the actual income, earnings and losses of the amounts held by the Rabbi Trust
and (iii) subject to the provisions of paragraphs (B), (C) and (D) of Article
FIFTH and Xxxx'x rights in the event of the Company's Insolvency (as defined in
the Rabbi Trust Agreement), the Company and Union have no further obligation
whatsoever to Xxxx related to the bonuses described in paragraph (A) of Article
FIFTH.
The last sentence in paragraph (A) of Article FIFTH is hereby deleted.
SIXTH: The references in paragraphs (A)(1), (B) and (C) of
3
Article SIXTH to "fifth (5th)" are amended to read "sixth (6th)."
SEVENTH: Paragraph (C)(7) of Article THIRD and paragraph (B) of Article
FIFTH of the Employment Agreement are clarified and modified as set forth in
this Section SEVENTH. The Company shall contribute all amounts previously
accrued under paragraph (C)(7) of Article THIRD (the non-qualified retirement
plan) including accrued interest, to the Rabbi Trust established pursuant to
paragraph (A) of Article FIFTH and as described in Section FIFTH above. With
respect to amounts payable under paragraph (C)(7) of Article THIRD, the parties
agree that the Employee must be employed by the Company on June 30 of each
fiscal year to earn the non-qualified retirement plan contribution for the
applicable fiscal year. Subject to the foregoing, the Company agrees to
contribute, for the fiscal years ending June 30, 1997 and 1998, amounts earned
under paragraph (C) (7) of Article THIRD to the Rabbi Trust no later than July
15 following the end of the fiscal year for which it is earned. The Trustee
shall be instructed to retain separate records with respect to such
contributions and any income, gains, losses and expenses with respect thereto.
A. The administrative costs and expenses with respect to
establishing and maintaining such Rabbi Trust shall be paid by the Company and
shall not be deducted from the Rabbi Trust. However, the Company shall not be
obligated to pay for any costs, expenses or losses relating to the purchases,
sales or holding of assets and investments by the Rabbi Trust, which costs,
expenses and losses shall be borne solely by the Rabbi Trust.
B. Subject to the Employee satisfying the employment
4
requirements hereunder, the Company's only obligations to the Employee and his
beneficiaries, heirs and estate regarding paragraph (C)(7) of Article THIRD is
to (i) establish and maintain the Rabbi Trust, (ii) contribute to the Rabbi
Trust all amounts previously earned, including all accrued interest due thereon,
(iii) contribute $30,000 to the Rabbi Trust no later than each July 15th during
the remaining term of the Employment Agreement and (iv) pay the administration
costs and expenses in accordance with paragraph A. of this Section SEVENTH. The
Employee and Company hereby acknowledge and agree that all gains, losses,
earnings and expenses relating to the purchases, sales or holding of assets and
investments of the Rabbi Trust shall enure to the benefit or detriment of the
Employee and that, subject to the Employee's rights in the event of the
Company's Insolvency (as defined in the Rabbi Trust Agreement), the payment by
the Company of the administrative expenses described in paragraph A. above and
the payment of the applicable annual contribution(s) to the Rabbi Trust in
accordance with this paragraph B. shall relieve the Company of any and all of
its obligations under paragraph (C)(7) of Article THIRD and this Section
SEVENTH. The amounts that the Company contributes to the Rabbi Trust shall be
an asset of the Company and shall be subject to the claims of the Company's
general creditors.
C. The words "sum retained by the Company" set forth in paragraph
(B)(1) of Article FIFTH shall hereinafter mean "amounts contributed into the
Rabbi Trust pursuant to this Agreement."
EIGHTH: Except as amended above, all of the terms and conditions of the
Employment Agreement shall remain in full force
5
and effect.
Dated ____________________ TRANSWORLD SYSTEMS, INC.
/s/ XXXXXX X. XXXX By:/s/ XXXXXX XXXXXXXX
------------------------------ -----------------------
Xxxxxx X. Xxxx Xxxxxx Xxxxxxxx
President
THE UNION CORPORATION
By:/s/ XXXXXX X. XXXXXX
-----------------------
Xxxxxx X. Xxxxxx
Chairman of the Board and
Chief Executive Officer
6
