EXHIBIT 10.23
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT - XXXX XXXXXX
This First Amendment to Employment Agreement - Xxxx Xxxxxx (this "First
Amendment") is made effective as of September 1, 2005 and is entered into by
and between Integrated Performance Systems, Inc., a New York corporation
(the "Company") and Xxxx Xxxxxx (the "Employee").
WHEREAS, the Company and the Employee have entered into that certain
Employment Agreement - Xxxx Xxxxxx dated effective as of November 30, 2004
(the "Base Agreement"); and
WHEREAS, the parties hereto desire to amend and supplement certain of
the terms and provisions of the Base Agreement.
NOW THEREFORE, for and in consideration of the mutual covenants herein
contained, it is hereby agreed as follows:
1. Section 3.A. of the Base Agreement is amended to increase the base
salary of the Employee from $85,000 per year to $120,000 per year, effective
with the payroll commencing on September 1, 2005.
2. Section 3 is hereby amended to provide a new subsection E, which
new subsection E will be as follows:
E. Bonus
Commencing with the fiscal year ending July 31, 2006, the Employee
shall participate in a Company Management Incentive Plan, as
approved and amended by the Board from time to time, and which is
designed to deliver an annual bonus consistent with current levels
established for this position by the Board. Employee shall
periodically meet with the Board to establish quantitative and
qualitative initiatives and objectives for the purpose of
assessing the amount of bonus to be paid to Employee at the end of
the associated bonus period. Bonus for the remaining term of this
Agreement shall be a percentage (the "bonus percentage") of the
"bonus base amount."
The "bonus base amount" is the annual revenue of the Company for
the previous fiscal year, less expenses associated with tooling
and testing. The applicable bonus percentages are as follows:
Bonus Base Amount Bonus Percentages
----------------- -----------------
$0 - $20 million 0%
$20 - $30 million 0.2%
$30 - $40 million 0.1%
Over $40 million 0.05%
The bonus amount calculated pursuant to the above shall be paid in
four (4) equal quarterly installments as follows:
-----------------------------------
25% of bonus October 31
-----------------------------------
25% of bonus January 31
-----------------------------------
25% of bonus April 30
-----------------------------------
25% of bonus July 31
-----------------------------------
Example: The following example illustrates the application of the
above bonus structure assuming annual revenue, less tooling and
testing, of $50 million:
Bonus Base Bonus Bonus
Amount Percentage Calculation Amount
----------------- ---------- ------------------ -------
$0 - $20 million 0% 0% X $20 million $0
$20 - $30 million 0.2% 0.2% X $10 million $20,000
$30 - $40 million 0.1% 0.1$ X $10 million $10,000
$40 - $50 million 0.05% 0.05%X$10 million $5,000
-------
TOTAL BONUS $35,000
3. Section 5 of the Base Agreement is amended to provide a new
sentence at the end as follows: "During the term of this Agreement, Employee
shall receive an automobile allowance of Four Hundred Fifty and No/100
Dollars ($450.00) per month for any month in which he does not retain
control of a Company provided vehicle."
4. Section 7.B.2.(c) of the Base Agreement shall be amended to delete
the second paragraph thereof and replace such second paragraph in its
entirety with the following:
If, contemporaneously with any such change in control, or during a
two year period subsequent to a change in control, Employee is terminated
without cause, or Employee terminates for Good Reason, the Company shall (i)
pay Employee regular pay through the date of termination, including pro-
rated bonus for partial year; (ii) pay Employee a lump sum payment equal to
(A) 35 months of Employee's then current annualized salary, plus (B) the
aggregate annual bonus compensation paid for preceding 2.9 full years or 2.9
times the target bonus for the year of termination, whichever is greater;
(iii) vest all outstanding stock options; and (iv) provide continued
participation in medical, dental, life and disability insurance benefits at
same premium cost in effect for active employees for 2.9 years.
5. Section 17 of the Base Agreement shall be amended to replace the notice
party for the Company with the following: Xxxx Xxxxxx, President, 000
Xxxxxxx Xxxx, Xxxxx, Xxxxx 00000
6. Other than as modified herein, all the terms and provisions of the Base
Agreement shall remain in full and effect.
EXECUTED as of the date first set forth above.
COMPANY: EMPLOYEE:
Integrated Performance Systems, Inc. Xxxx Xxxxxx
By:_____________________________ ______________________________
Xxxx Xxxxxx, President Xxxx Xxxxxx, individually
