EXHIBIT 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT ("Amendment") is made and
entered into as of October 21, 2003, by and between Xxxxxxxx X. Xxxx, an
individual resident of the State of Florida ("Employee"), and Horizon Medical
Products, Inc., a Georgia corporation ("Employer");
W I T N E S S E T H:
WHEREAS, Employee and Employer entered into that certain Employment
Agreement dated March 16, 2002, as amended by Amendment to Employment Agreement
dated November 15, 2002 (collectively, the "Employment Agreement"), and desire
to amend the Employment Agreement in the manner hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto intending to be legally bound hereby agree as follows:
1. The Employment Agreement is hereby amended by deleting the
first paragraph in Section 2 in its entirety and by substituting in lieu thereof
the following first paragraph in Section 2:
The term of Employee's employment hereunder (the
"Term") shall be from March 16, 2002 (the "Effective Date")
until the earlier of (i) January 31, 2006 or (ii) the
occurrence of any of the following events:
2. The Employment Agreement is hereby amended by deleting
subsection (c) in Section 2 in its entirety and by substituting in lieu thereof
the following subsection (c) in Section 2:
(c) The termination of this Agreement by either party
upon at least one hundred twenty (120) days prior
written notice.
3. The Employment Agreement is hereby amended by deleting
subsection (a) in Section 3.1 in its entirety and by substituting in lieu
thereof the following subsection (a) in Section 3.1:
(a) SALARY. Upon the occurrence of the Effective Date (as
defined below), but effective as of October 21, 2003,
Employee will be paid a Salary of no less than Three
Hundred Fifteen Thousand Dollars ($315,000.00) per
annum, less deductions and withholdings required by
applicable law. The Salary shall be paid
to Employee in equal monthly installments (or on such
more frequent basis as other executives of Employer
are compensated). The "Effective Date" means the
effective date on which the due date for the
principal repayment of the subordinated notes of
Employer is extended from March 16, 2004 to July 16,
2005 pursuant to the provisions of Amendment No. 1 to
Note Purchase Agreement dated October 21, 2003 among
Employer, ComVest Venture Partners, L.P., and
Medtronic, Inc.
4. The Employment Agreement is hereby amended by adding the
following subsections (b)(iii), (b)(iv), and (b)(v) to Section 3.1:
(iii) For fiscal year 2004, Employee will be
entitled to an annual bonus (the "2004 Bonus"), based upon
Employer's achievement during 2004 of net sales and EBITDA
under Employer's operating budget for 2004 that has been
approved by the Board of Directors of Employer (the "2004
Operating Budget"), as follows:
(A) If Employer's actual net sales during 2004
are greater than fifty percent (50%) of the
net sales for 2004 as reflected in the 2004
Operating Budget, then Employee will be
entitled to a 2004 Bonus under this
subparagraph (A) calculated under the
formula X times Y times the Bonus
Percentage, where X is Employee's Salary for
2004 and Y is 50%. The Bonus Percentage is
determined by dividing actual net sales by
2004 Operating Budget net sales for 2004;
where the result of such division is greater
than 50%, but less than 76%, the Bonus
Percentage is 50%, where the result of such
division is 76% or more, but less than 100%,
the Bonus Percentage is 75%, and where the
result of such division is 100% or greater,
the Bonus Percentage is 100%.
(B) If the Employer's actual EBITDA for 2004 is
greater than fifty percent (50%) of the
EBITDA for 2004 as reflected in the 2004
Operating Budget, then Employee will be
entitled to a 2004 Bonus under this
subparagraph (B) calculated under the
formula X times Y times the Bonus
Percentage, where X is Employee's Salary for
2004 and Y is 50%. The Bonus Percentage is
determined by dividing actual EBITDA by 2004
Operating Budget EBITDA for 2004; where the
result of such division
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is greater than 50%, but less than 76%, the
Bonus Percentage is 50%, where the result of
such division is 76% or more, but less than
100%, the Bonus Percentage is 75%, and where
the result of such division is 100% or
greater, the Bonus Percentage is 100%.
(C) For purposes of the 2004 Bonus, in the event
Employer sells a product line or division
during 2004 or in the event that Employer is
acquired by a third party during 2004, then
the 2004 Bonus shall be calculated using
actual net sales and EBITDA through the
month end immediately prior to such sale or
acquisition and using net sales and EBITDA
under the 2004 Operating Plan the through
such month end.
(D) The 2004 Bonus, if earned, will be payable
to Employee on the next pay period after the
2004 audited financial statements are
finalized.
The last paragraph in Section 3.1(b)(i) of the
Employment Agreement, which described a bonus for the period
from January 1, 2004 through March 31, 2004 is hereby deleted
in its entirety.
(iv) For fiscal year 2005, Employee will be
entitled to an annual bonus ("2005 Bonus"), based upon
Employer's achievement during 2005 of net sales and EBITDA
under Employee's operating budget for 2005 that has been
approved by the Board of Directors of Employer (the "2005
Operating Budget") as follows:
(A) If Employer's actual net sales during 2005
are greater than fifty percent (50%) of the
net sales for 2005 as reflected in the 2005
Operating Budget, then Employee will be
entitled to a 2005 Bonus under this
subparagraph (A) calculated under the
formula X times Y times the Bonus
Percentage, where X is Employee's Salary for
2005 and Y is 50%. The Bonus Percentage is
determined by dividing actual net sales by
2004 Operating Budget net sales for 2004;
where the result of such division is greater
than 50%, but less than 76%, the Bonus
Percentage is 50%, where the result of such
division is 76% or more, but less than 100%,
the Bonus Percentage is 75%, and where the
result of such
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division is 100% or greater, the Bonus
Percentage is 100%.
(B) If the Employer's actual EBITDA for 2005 is
greater than fifty percent (50%) of the
EBITDA for 2005 is reflected in the 2005
Operating Budget, then Employee will be
entitled to a 2005 Bonus under this
subparagraph (B) calculated under the
formula X times Y times the Bonus
Percentage, where X is Employee's Salary for
2005 and Y is 50%. The Bonus Percentage is
determined by dividing actual EBITDA by 2005
Operating Budget EBITDA for 2005; where the
result of such division is greater than 50%,
but less than 76%, the Bonus Percentage is
50%, where the result of such division is
76% or more, but less than 100%, the Bonus
Percentage is 75%, and where the result of
such division is 100% or greater, the Bonus
Percentage is 100%.
(C) For purposes of the 2005 Bonus, in the event
Employer sells a product line or division
during 2005 or in the event that Employer is
acquired by a third party during 2005, then
the 2005 Bonus shall be calculated using
actual net sales and EBITDA through the
month end immediately prior to such sale or
acquisition and using net sales and EBITDA
under the 2005 Operating Plan the through
such month end.
(D) The 2005 Bonus, if earned, will be payable
to Employee on the next pay period after the
2005 audited financial statements are
finalized.
(v) For the period from January 1, 2006 through
January 31, 2006, the Compensation Committee of the Board of
Directors shall determine in its sole discretion the bonus
compensation of Employee for such month.
5. The provisions of this Amendment shall become effective on the
Effective Date. Except as expressly amended above, all other provisions of the
Employment Agreement shall remain in full force and effect. This Amendment
inures to the benefit of, and is binding upon, Employer and its respective
successors and assigns and Employee, together with Employee's executor,
administrator, personal representatives, heirs, and legatees. This Amendment is
intended by the parties hereto to be the final expression of their agreement
with respect to the subject matter hereof and is the complete and exclusive
statement of the terms thereof,
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notwithstanding any representations, statements, or agreements to the contrary
heretofore made.
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Except for the Employment Agreement, this Amendment supersedes and terminates
all prior agreements and understandings between Employer and Employee concerning
the subject matter of this Amendment. This Amendment may be modified only by a
written instrument signed by all of the parties hereto. This Amendment shall be
deemed to be made in, and in all respects shall be interpreted, construed, and
governed by and in accordance with, the laws of the State of Georgia without
reference to its conflicts of law principles. This Amendment may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx, President
EMPLOYEE:
/s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx
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