AMENDED AND RESTATED INCENTIVE COMPENSATION AGREEMENT
Amended and Restated Agreement, dated November 17, 2003 and effective
December 1, 2003, between GP Strategies Corporation, a Delaware corporation with
principal executive offices at 777 Westchester Avenue, White Plains, NY 10604
(the "Company"), and Jerome I. Feldman, residing at 145 West Patent Road,
Bedford Hills, New York 10507 ("Employee").
WHEREAS, Employee is a founder of the Company and has for many years
been Chairman of the Board and Chief Executive Officer of the Company;
WHEREAS, Section 5(b) of the Employment Agreement, dated as of June 1,
1999, as amended (the "Employment Agreement"), between the Company and Employee
provides that the Company and Employee will negotiate in good faith to formulate
an annual incentive based compensation arrangement based on the Company
achieving certain financial milestones which will be fair and equitable to
Employee and the Company and its stockholders; and
WHEREAS, the Company and Employee have entered into an Amended and
Restated Agreement, dated as of June 11, 2003, as amended (the "Existing
Agreement"), to provide incentive compensation to Employee in a manner that
closely aligns the amount of such compensation to the interests of the Company's
stockholders and the enhancement of stockholder value; and
WHEREAS, the Existing Agreement shall remain in effect until November
30, 2003; and
WHEREAS, the Company and Employee wish to amend and restate the
Existing Agreement, effective December 1, 2003, to modify the criteria for
earning certain payments under the Existing Agreement.
NOW, THEREFORE, intending to be legally bound, and for and in
consideration of the mutual covenants set forth herein, the parties hereto agree
as follows:
1. Incentive Compensation. Employee shall be eligible to receive from the
Company up to five payments (each, an "Incentive Payment"). The Employee
will earn an Incentive Payment in an amount equal to $1 million on the
first date that each of the following events occurs:
(a) the closing price of the common stock, par value $0.01 per share, of
the Company on the New York Stock Exchange (the "Closing Price") equals
or exceeds, for at least 10 consecutive trading days, $5.40 (the "First
Incentive Payment"); provided that if the First Incentive Payment is
not earned prior to May 3, 2004, the First Incentive Payment shall be
earned on the date, if any, that the Second Incentive Payment (as
defined below) is earned;
(b) the Closing Price equals or exceeds, for at least 10 consecutive
trading days, $6.30 (the "Second Incentive Payment"); provided that if
the Second Incentive Payment is not earned prior to the May 3, 2006,
the Second Incentive Payment shall be earned on the date, if any, that
the Third Incentive Payment (as defined below) is earned;
(c) the average Closing Price over a period of at least 10 consecutive
trading days equals or exceeds $7.20 (the "Third Incentive Payment");
(d) the average Closing Price over a period of at least 10 consecutive
trading days equals or exceeds $8.10; and
(e) the average Closing Price over a period of at least 10 consecutive
trading days equals or exceeds $9.00.
Each Incentive Payment shall be paid on the date it is earned, except that any
Incentive Payment earned prior to December 31, 2003 shall be paid on the last
payroll payment date in 2003.
Notwithstanding the foregoing, Employee may, by written notice (a
"Deferral Notice") to the Company, elect to defer receipt of all, or a portion,
of any Incentive Payment (any amount so deferred being a "Deferred Amount") for
a Deferral Period; provided that (x) any Deferral Notice with respect to any
Incentive Payment earned prior to December 31, 2003 must be given prior to
December 1, 2003, (y) any Deferral Notice with respect to any Incentive Payment
earned on or after December 31, 2003 must be given at least five business days
prior to the date that such Incentive Payment is earned (the date any Incentive
Payment is earned is referred to as the "Earned Date" for such Incentive
Payment), and (z) if, on any Earned Date, any amount of principal or interest on
any outstanding loan from the Company to Employee (a "Loan Amount") is due and
payable and is not otherwise paid, the Deferred Amount shall not exceed the
excess, if any, of the amount of the Incentive Payment earned on such Earned
Date over the Loan Amount then due.
Interest on each Deferred Amount shall accrue, from the related Earned
Date to the last day of the related Deferral Period, at the prime lending rate
announced by Fleet Bank, N.A. (or its successor) from time to time minus 1%.
Each Deferred Amount, together with all accrued interest thereon, shall be paid
on the last day of the related Deferral Period.
The "Deferral Period" with respect to any Deferred Amount shall be the
period set forth in the related Deferral Notice, provided that
(i) no Deferral Period shall be less than six months (except
as provided in clauses (iii) and (iv) below);
(ii) unless Employee provides written notice to the Company at
least 30 days prior to the expiration of any Deferral Period
that Employee elects to receive the related Deferred Amount,
such Deferral Period shall be extended automatically for an
additional period equal to the original related Deferral
Period, subject to clauses (iii) and (iv);
(iii) no Deferral Period shall end later than May 31, 2007;
and
(iv) if any Loan Amount becomes due and payable and is not
otherwise paid, the Deferral Period shall terminate (or, in
the case of the application of (ii), not be extended) with
respect to the lesser of (x) the aggregate of the
then-outstanding Deferred Amounts and interest thereon and (y)
such Loan Amount.
In any case where clause (iv) of the definition of Deferral Period is
applicable and the amount in clause (y) is less than the amount in clause (x),
the Deferral Periods which shall terminate (in whole or in part) shall be those
which would otherwise terminate latest unless otherwise specified by Employee by
notice to the Company given not later than such termination date.
2. Set-off Against Loans. To the extent there are any outstanding loans
from the Company to Employee at the time an Incentive Payment is payable, the
Company will set off the payment of such Incentive Payment against the
outstanding principal and interest under such loans.
3. Termination. This Agreement will terminate on the earlier to occur
of (a) May 3, 2007 and (b) the date of termination of Employee's employment with
the Company (other than termination by (i) the Company in breach of the
Employment Agreement or (ii) Employee for Good Reason (as defined in the
Employment Agreement)). Notwithstanding anything set forth in this Agreement to
contrary, (A) no Incentive Payment shall be earned after the termination of this
Agreement and (B) termination of this Agreement shall not affect the obligation
of the Company to pay any Incentive Payment earned prior to such termination.
4. Employment. Notwithstanding anything set forth in this Agreement to
contrary, nothing in this Agreement shall be construed as an agreement by the
Company to employ the Employee for any period of time and, except as provided in
the Employment Agreement, the Company shall have the right at any time to
terminate the Employee with or without cause.
5. Miscellaneous.
(a) The dollar amounts in Section 1 shall be equitably adjusted for
stock splits, stock dividends, and similar transactions.
(b) This Agreement shall not be assignable, in whole or in part, by
either party without the prior written consent of the other party, and any
attempted assignment without such prior written consent shall be void.
(c) This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, representations and understandings, written or oral,
of the parties.
(d) This Agreement may not be modified, amended, or supplemented except
by a writing signed by each of the parties hereto.
(e) This Agreement may be executed in counterparts each of which shall
be deemed an original but both of which together shall constitute one and the
same instrument.
(f) This Agreement shall be governed by and interpreted under the
internal laws of the State of New York, without regard to conflicts of laws
principles.
IN WITNESS WHEREOF, the parties have signed this Agreement on
the date first set forth above.
GP STRATEGIES CORPORATION
By:
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Name:
Title:
Jerome I. Feldman