EXHIBIT 10.70
TBC MANAGEMENT, LTD.
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
March 13, 2002
THIS AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT (the "Second Amendment")
is made effective as of the Effective Time (as such term is defined below), and
is made a part of and should be attached to that certain Letter Agreement dated
November 16, 1999, as amended by an Amendment to Employment Agreement dated
April 5, 2001 (such agreement, as so amended being referred to herein as the
"Agreement") by and between Mark T. Walton ("Employee") and TBC Management,
Ltd., a Texas limited partnership (the "Company") and agreed to and accepted by
Travis Boats & Motors, Inc., a Texas corporation ("Travis Boats"). Terms used
herein and otherwise defined shall have the meaning subscribed in the Agreement.
WHEREAS, Tracker Marine, L.L.C., through itself or an affiliate
("Tracker"), is contemplating an investment in Travis Boats consisting of the
purchase of securities of Travis Boats in one or more tranches with an aggregate
value of approximately $8 million, which such securities shall include shares of
6% Series A Cumulative Convertible Preferred Stock (the "Series A Preferred")
and Warrants, pursuant to that certain Preferred Stock and Warrant Purchase
Agreement dated as of March 13, 2002 by and between Tracker and Travis Boats
(the "Purchase Agreement") (collectively, with the issuance of securities of
Travis Boats pursuant to the conversion of the Series A Preferred and the
exercise of the Warrants, the "Equity Investment"); and
WHEREAS, Tracker is unwilling to make the Equity Investment in light of
certain provisions of the Agreement with the Employee, namely, the Employee's
right to receive certain severance payments following, and conditioned on, a
Change of Control of Travis Boats; and
WHEREAS, the Employee has a direct interest in the success of Travis
Boats, and accordingly, believes that the potential benefits to be derived by
Travis Boats as a result of the Equity Investment would redound to and directly
benefit the Employee; and
WHEREAS, the Equity Investment itself may constitute, and the election
of directors as contemplated pursuant to the Equity Investment may result in, a
Change of Control; and
WHEREAS, to induce Tracker to make the Equity Investment in Travis
Boats, the Employee is willing to forego his rights to such severance payments
that may be triggered by the consummation of the Equity Investment.
NOW, THEREFORE, the parties to the Agreement hereby agree that
effective upon the Effective Time:
1. Neither the Equity Investment (nor any aspect thereof, including,
without limitation, additional investments by Tracker in Travis Boats) nor the
exercise, by any holder of Series A Preferred issued in connection with or
resulting from the Equity Investment, of the right to elect and/or designate
certain persons to the board of directors of Travis Boats as set forth in the
Statement of Designations relating to the Series A Preferred (the "Director
Election Rights") shall constitute a Change of Control.
2. The Equity Investment and the exercise of the Director Election
Rights shall not otherwise affect or change any of Employee's rights under the
Agreement.
3. This waiver does not extend to any event subsequent to the
consummation of the Equity Investment, other than the additional investments
contemplated by Section 1 of this Amendment and subsequent exercises of the
Director Election Rights, and any such events shall have the effects and
remedies specified in the Agreement.
4. Section 9(d) of the Agreement shall be amended by deleting the first
parenthetical set forth therein, and replacing it with the following:
"(including expiration of a term of this Letter Agreement if
the Board of Directors of the Company has not submitted to you a "bona
fide proposal" for continued employment prior to the expiration of such
term)"
5. Section 9(d) of the Agreement shall be further amended by adding the
following sentence to the end of such section:
"For purposes of this Section 9(d), the term "bona fide
proposal" shall mean a proposal made in good faith for the continued employment
of Employee for a term of three years; provided however, that a proposal that
adversely affects your current title or job description, reduces your current
salary or changes the location of employment shall not be deemed a bona fide
proposal. Moreover, such a proposal shall provide for (i) a two year extension
to certain non-qualified stock options granted to you in 1995, (ii) a severance
package, in lieu of the severance package provided in this Agreement, that will
pay to you (A) upon a termination without cause, the greater of the amount of
salary payable during the then remaining portion of the term of employment as if
you had not been terminated or one month of severance for each year of service
to the Company, and (B), upon a termination with cause or if you resign, no
severance, (iii) change of control provisions substantially similar to such
provisions currently in this Agreement, except that no change of control payment
shall be triggered by any action taken or event caused by Tracker Marine,
L.L.C., and/or any of its affiliates and (iv) such other terms, which when taken
as a whole, have an aggregate benefit materially comparable to the aggregate
benefit of the other terms of this Agreement, taken as a whole."
6. On or before the date of the Second Closing, the terms and
conditions of the Agreement may not be amended or changed in any way, nor shall
any renewals or extensions of this Agreement be approved or new employment
agreements with Employee be entered into, nor shall the directors of Travis
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Boats or the Company approve any of the foregoing, without, in each case, the
prior written consent of Tracker.
7. Employee hereby foregoes all rights and entitlement, if any, with
respect to certain stock options referenced in the minutes of the Travis Boats
Compensation Committee meeting dated February 5, 2002 to which the Employee
otherwise may have been entitled and acknowledges his understanding and
agreement that he shall not be granted such stock options.
8. As soon as is reasonably practicable, Travis Boats shall, upon
obtaining the approval of its board of directors and subject to availability
under existing stock option plans, grant to Employee an option to purchase
10,000 shares of the common stock of Travis Boats, at a per share exercise price
equal to the fair market value of one share of common stock of Travis Boats on
the date of grant and on such other terms as the board of directors of Travis
Boats may determine.
9. This Second Amendment is conditioned upon the consummation of the
initial investment that is a part of the Equity Investment (the "Effective
Time"), at which time this Second Amendment shall automatically, and without
further action on the part of any party, become effective. This Second Amendment
shall terminate if the Purchase Agreement is terminated in accordance with
Section 9 thereof.
7. This Second Amendment is for the benefit of Tracker, and Tracker, as
a third party beneficiary hereof, shall be entitled to enforce the Agreement, as
amended hereby, as though a party to the Agreement, as amended hereby.
[Remainder of page blank; signature page to follow]
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Executed by the undersigned this 13th day of March, 2002, and shall be
effective at, and subject to the occurrence of, the Effective Time.
TBC MANAGEMENT, LTD.
By:
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Title:
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EMPLOYEE
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Agreed to and accepted this 13th day of March, 2002.
TRAVIS BOATS & MOTORS, INC.
By:
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Title:
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By:
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Title: Chairman of the Compensation Committee
of the Board of Directors
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