AMENDMENT NUMBER 1
TO THE
EMPLOYMENT AGREEMENT
BETWEEN MICHAEL DOLAN
AND TRM CORPORATION
WHEREAS, TRM
Corporation (“TRM” or the “Company”)
entered into an Employment Agreement (the “Agreement”)
with Michael Dolan (the “Employee”) effective as of
August 1, 2007; and
WHEREAS, the
parties acknowledge that Section 409A of the Internal Revenue
Code (the “Code”), as enacted under the American Jobs
Creation of 2004 (“AJCA”), made certain changes with
regard to the manner in which certain forms of nonqualified
deferred compensation may be paid to employees and consultants,
including the payment of severance benefits, continuation of COBRA
benefits and other benefit payments; and
WHEREAS, the
parties also acknowledge that if the provisions of
Section 409A are not satisfied, the Employee may be subject to
adverse tax consequences including immediate taxation, a 20% excise
tax and underpayment of interest penalties; and
WHEREAS, the
parties have operated in good faith compliance with
Section 409A since it became effective on August 1, 2007;
and
WHEREAS, the
parties wish to amend the Agreement effective as of
December 1, 2008.
NOW, THEREFORE,
TRM and the Employee hereby agree to amend the Agreement as
follows:
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a.
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Lump Sum . Notwithstanding any provisions in
the Agreement to the contrary, all severance benefits will be paid
in a single lump sum cash payment within 30 days after
execution of a Severance Agreement and General Release (a
“Release”), and the expiration of any revocation
period. In no event will the severance benefit be paid more than
2 1 / 2 months after the end of the calendar
year in which a Separation from Service occurs, provided the
Employee executes and returns the Release within the applicable
time limitations contained in the Agreement, this Amendment or any
Release, without revocation of the Release.
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If
the period during which the Employee has discretion to consider and
revoke the Release straddles two taxable years of the Employee,
then the Company shall make the payments to which the Employee is
entitled under Section 1(a) in the second of such taxable years,
regardless of the taxable year during which the Employee actually
delivers the executed Release to the Company.
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b.
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COBRA Benefits
. The Company has agreed
to continue to pay for medical and dental coverage for a period of
2 years following a Separation from Service. The Company
agrees to subsidize 100% of the cost of COBRA coverage for 18
months. Thereafter, to the extent necessary, the Company will pay
for individual policies to satisfy any of its obligations under the
Agreement. The payment for such policies shall be made as of the
first day of each month, which shall be deemed to be fixed payment
dates under Section 409A of the Code.
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At the end of the
period in which the Company is paying all or a portion of the cost
of COBRA benefits, the Employee may continue COBRA benefits for the
full period in which COBRA rights exist for the Employee, and any
dependents, including the extension of COBRA coverage for any
subsequent events.
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2.
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Section 409A Compliance for
Benefit Payments . The parties acknowledge that the
payment of some or all of the above severance benefits may be
considered to be a form of nonqualified deferred compensation
benefits subject to Section 409A of the Code. In recognition
of this fact, the parties hereby agree and confirm as
follows:
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a.
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Notwithstanding any provisions of
this Release to the contrary, in no event will any cash severance
benefits be paid, or commence to be paid for any periodic payments,
more than 2 1 / 2 months after the end of the calendar
year in which a Separation from Service occurs.
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b.
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The
parties acknowledge that the continuation of benefits under COBRA
and other benefits will be incurred and paid by the
December 31 of the second calendar year following the calendar
year in which a Separation from Service occurs.
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c.
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Continuation of benefits any other
benefits must generally be incurred and paid by December 31 of
the second calendar year following the calendar year in which a
Separation from Service occurs to comply with Section 409A of
the Code.
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3.
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Payment . Whenever a payment under the
Agreement, this Amendment or any Release specifies a payment period
with reference to a number of days ( e.g. , “payment
will be made within 30 days after a Separation from
Service”), the actual date of payment within the specified
period will be within the sole discretion of the
Company.
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4.
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Section 409A
Compliance . It is intended that the Agreement
and this Amendment will comply with Section 409A of the Code
(and any regulations and guidelines issued thereunder) to the
extent the Agreement is subject thereto, and the Agreement will be
interpreted on a basis consistent with such intent. If any
additional amendments to the Agreement are necessary for the
Agreement to comply with Section 409A, the parties will
negotiate in good faith to amend the Agreement in a manner that
preserves the original intent of the parties to the extent
reasonably possible. No action or failure to act, pursuant to this
Section 5, will subject the Company to any claim, liability,
or expense, and the Company will not have any obligation to
indemnify or otherwise protect the Employee from the obligation to
pay any taxes pursuant to Section 409A of the Code.
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For
all purposes under this Agreement, reference to the
Employee’s “Termination of Employment” (and
corollary terms) with the Company will be construed to refer to a
“Separation from Service” (as determined under Treas.
Reg. Section 1.409A-1(h), as uniformly applied by the Company)
with the Company.
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With regard to any provision herein
that provides for reimbursement of costs and expenses or
in
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