WHEREAS, the Company and the Employee have entered into that certain Employment Agreement, effective as of October 7, 2011, which sets forth the terms and conditions of the Employee’s employment with the Company (the “Employment Agreement”); and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Definitions and Amendments
1.1 Definitions. For purposes of this Amendment, terms used but not defined herein have the meanings ascribed to such terms in the Employment Agreement.
(a) Section 4 of the Employment Agreement shall be amended by deleting Section 4 in its entirety and replacing it with the following:
“Employee’s employment hereunder commenced on October 7, 2011 and shall end October 7, 2014 (the “Initial Term”). Thereafter, the Employee’s employment hereunder automatically shall be extended for one additional twelve-month period (the “Subsequent Term”), commencing October 8, 2014 and ending October 7, 2015. For all compensation and benefit purposes, other than those specifically addressed herein, the Employee shall be deemed to have been continually employed with the Employer from May 21, 2007.”
(b) Section 5(i) of the Employment Agreement shall be amended by deleting Section 5(i) in its entirety and replacing it with the following:
“(i) Base Salary. Employer shall pay Employee a base salary (“Base Salary”) at the rate of $290,400 per annum, payable semi-monthly. Upon renewal for a Subsequent Term, base salary shall increase (a) by a minimum of Ten Percent (10%) (the “Minimum Increase”) over the Base Salary; or (b) as the Board of Directors shall determine if in excess of the Minimum Increase. Future salary increases will be subject to mutual agreement.”
(c) Section 5(ii) of the Employment Agreement shall be amended by deleting Section 5(ii) in its entirety and replacing it with the following:
“(ii) Annual Bonus. In addition to Base Salary, Employee will be eligible to participate in the Company's 2014 Incentive Compensation Plan with a target bonus opportunity for fiscal year 2015 equal to 25% of Base Salary. Bonuses may be earned based on targeted achievement of GAAP Revenue for fiscal year 2015, subject to a minimum gross margin percentage and maximum Adjusted EBITDA loss amount. Additional details about the bonus opportunity are set forth in the Incentive Compensation Plan. Bonus opportunities for fiscal year 2016 and beyond will be determined in the discretion of the Board of Directors.”
(d) Section 5 of the Employment Agreement shall be amended by adding the following new Section 5(iv):
“(iv) Transaction Bonus. In addition to the Base Salary, Employee will be eligible to participate in the Company's Transaction Bonus Plan with a bonus opportunity equal to 1.0% of the Net Consideration with respect to a Transaction. The terms and conditions of the bonus opportunity are set forth in the Transaction Bonus Plan.”
(e) (a) Section 15(a)(ii) of the Employment Agreement shall be amended by deleting Section 15(a)(ii) in its entirety and replacing it with the following:
“(ii) If Employer terminates Employee’s employment hereunder without Just Cause Employer shall continue to pay to Employee his then-current base salary, in accordance with customary payroll practices, plus accrued but unpaid vacation time, accrued but unpaid benefits (as described in Section 8(i) above) and reimbursement of all unpaid business expenses (in each case, as of the date of termination) (collectively the “Continued Benefits”) for a period of the greater of (a) six months; or (b) the remainder of the Initial Term and the Subsequent Term, whichever the case may be (the “Continuation Period”). Employee shall be entitled to continued participation in all medical and disability plans, to the extent such plans are provided by Employer, on the same terms and conditions as if his employment had not terminated until the expiration of the Continuation Period.”
2.1 Entire Agreement. This Amendment and the Employment Agreement constitute the entire agreement between the parties and shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and permitted assigns.
2.2 Counterparts. This Amendment may be executed in multiple counterparts and by facsimile, each of which shall be deemed to be an original, and all such counterparts shall constitute but one instrument. This Amendment, to the extent signed and delivered by means of a facsimile machine or other electronic transmission (including .pdf files), shall be treated in all manner and respects and for all purposes as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto shall raise the use of a facsimile machine or other electronic transmission to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or other electronic transmission as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
2.3 Reference to and Effect on the Employment Agreement.
(a) Except as specifically amended by this Amendment, the Employment Agreement shall remain in full force and effect and is hereby ratified and confirmed.
(b) The execution and delivery of this Amendment and performance hereof shall not, except as expressly provided herein, constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of any party hereto under, the Employment Agreement.
(c) This Amendment shall be governed under the laws of the State of New York and shall be construed with the Employment Agreement as one instrument, and the Employment Agreement shall, where the context requires, be read and construed throughout so as to incorporate this Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.
Title: President and Chief Executive Officer