EXHIBIT 10.14
CONFIDENTIAL
AMENDMENT NO.1 TO EMPLOYMENT AGREEMENT
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This AMENDMENT, dated as of December 28, 1998, is made to the
EMPLOYMENT AGREEMENT dated as of September 11, 1996 (the "Agreement"), by and
between On Command Corporation, a Delaware corporation (the "Company"), and
▇▇▇▇▇ A. C. Steel, a resident of the State of California (the "Executive").
WHEREAS, the Company and the Executive desire to amend certain of the
terms and conditions of the Agreement in connection with the Executive becoming
President of the Company to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements made herein, and intending to be legally bound hereby, the Company
and the Executive agree as follows:
1. Definition of "NEWCO". The first parenthetical in the introductory
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paragraph of the Agreement is hereby amended to read as follows:
("NEWCO" or the "Company")
2. Change in Title; Duties.
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Sections 1(a) and 1(b) of the Agreement are hereby deleted and replaced in
their entirety by the following:
(a) Employment and Employment Period. The Company shall employ the
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Executive for a period (the "Employment Period") commencing on September
11, 1996 (the "Effective Date") and continuing thereafter for a term ending
on September 11, 2000 unless terminated in accordance with the provisions
of this Agreement. Executive shall be employed by the Company to serve as
Vice President, Chief Operating Officer and Chief Financial Officer from
the Effective Date to December 31, 1998, and as President and Chief
Operating Officer from December 31, 1998 through the remainder of the
Employment Period. In the event that the Company desires to extend the
employment of the Executive, it must give written notice of such desire by
September 11, 1999, and after such notice the parties shall enter
into an exclusive negotiation period of not less than six months, unless
otherwise mutually agreed upon by the parties in writing. Each 12 month
period ending on September 11 is sometimes referred to herein as a "year of
the Employment Period."
(b) Offices, Duties and Responsibilities. Effective on the
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Effective Date, Executive shall be elected Executive Vice President,
Chief Operating Officer and Chief Financial Officer of NEWCO. On
December 31, 1998, Executive shall be elected President and Chief
Operating Officer of the Company. The Executive shall report directly
and solely to the Chief Executive Officer and the Board of Directors
of the Company (the "Board"), or if there is no Chief Executive
Officer, to the Chairman of the Board and the Board of Directors of
the Company. The Executive's offices initially shall be located at
OCV's present headquarters. Throughout the Employment Period, the
Company shall cause the Executive to be a member of the Board. Until
December 31, 1998, the Executive shall have all duties and authority
customarily accorded a chief operating officer and chief financial
officer, and from December 31, 1998, the Executive shall have all
duties customarily accorded a president and chief operating officer,
including, without limitation, the lead responsibility with full
autonomy, subject to the customary authority and direction of the
Board (and the Chairman of the Board or Chief Executive Officer, as
the case may be), to direct and develop the operating capabilities and
performance of the Company. The Executive shall be a member of any
senior executive/management committees which may be established from
time to time by the Board. The Executive shall not be required to
perform services other than those comparable in scope, dignity and
stature to those customarily performed by officers of the same rank at
companies similar to the Company.
3. Notification of Chief Executive Search. A new Subsection (d) is hereby
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added to Section 1 of the Agreement to read as follows:
(d) New Chief Executive Search. In the event that the Company,
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or any authorized representative of the Company, undertakes or
authorizes a search for a
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new chief executive officer or president of the Company, or solicits,
or engages in any substantive discussions with, any person (or
representative of any person) to become the chief executive officer or
president of the Company, then and in such event, the Company will
promptly notify the Executive about the existence of such search,
solicitation or discussions as a courtesy to Executive, it being
understood that details about the same need not be provided by the
Company to the Executive.
4. Base Compensation. The following sentence is hereby added at the end
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of Section 2(a) of the Agreement:
Commencing December 31, 1998, the Executive's Base Salary shall be
increased to $375,000 per year.
5. Bonus Compensation. The following sentence is hereby added at the end
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of Section 2(b) of the Agreement:
Notwithstanding anything in the foregoing to the contrary, the parties
agree that the Compensation Committee will act in good faith to
establish parameters or guidelines which will contemplate that the
target level established for an Annual Bonus of 70% of Base Salary
shall not be treated as a "cliff" target; rather, in the event the
Company fails to meet 100% of the target level for a given period but
nevertheless achieves a substantial part of the targeted performance,
then and in such event, the parameters or guidelines will contemplate
that Executive shall qualify for an Annual Bonus for such period,
albeit at a level below 70% of Base Salary.
6. Fringe Benefits. Clause (v) of Section 2(c) of the Agreement is
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amended in its entirety to read as follows:
(v) Executive's reasonable legal fees and costs incurred in connection
with the drafting, negotiation and execution of this Agreement and
amendments and proposed amendments hereto, including negotiations
contemplated by clause (IX) of Section 5(a) of this Agreement
7. Stock Option Term. A new Clause (w) is hereby inserted immediately
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prior to Clauses (x) and (y) in Section 2(e) of the Agreement to read as
follows:
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(w) One year after the date upon which a termination of
employment occurs as a result of an Executive Election Event described
in Clause (IX) of Section 5(a) of this Agreement;
8. Termination. The Executive Election Event set forth in Clause (IX) of
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Section 5(a) of the Agreement is hereby deleted and replaced in its entirety by
the following:
(IX) (A) the election or appointment by the Board of Directors of a
Chief Executive Officer other than the Executive, or (B) the failure
of the Compensation Committee of the Board, prior to June 1, 1999, to
review the Executive's entire compensation package provided under this
Agreement and to propose increases or other amendments thereto as
determined by the Compensation Committee in its sole discretion in
light of the changes occurring in Executive's employment on December
31, 1998 (it being understood that the Compensation Committee shall
have no obligation to propose any such increases or other amendments),
or (C) the Executive and the Company failing to execute, on or before
August 1, 1999, mutually satisfactory amendments to this Agreement
either incorporating the proposals made by the Compensation Committee
under the immediately preceding clause (B) or containing other
amendments to this Agreement that are mutually satisfactory to the
Executive and the Company; (provided that in the event the Executive
exercises his Executive Election as a result of any of the conditions
set forth in this clause (IX), then the Executive need provide only
five (5) days advance written notice in lieu of the sixty (60) days
advance written notice required by the first sentence of Section 5(a)
above and the Company, in full satisfaction of all of the Company's
obligations under this Agreement and in respect of the termination of
the Executive's employment with the Company, shall, (a) through the
first anniversary of his termination, pay the Executive his Base
Salary, together with fringe benefits that are described in the
introductory clause and prior to the proviso of Section 2(c) of this
Agreement, (b) pay the Executive an Annual Bonus for the year in which
his employment is terminated at the maximum amount payable under this
Agreement, prorated through the date of his termination; and (c) a pro
rata portion of the Option and any other stock options granted to the
Executive under the Company's option plan or any
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successor plan that were scheduled to vest during the year of termination
shall vest as of the date of such termination of his employment.
9. No Other Amendments. Except as specifically set forth in this
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Amendment, all other provisions of the Agreement shall remain in full force and
effect during the Employment Period and, as applicable, thereafter to the extent
set forth in the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first set forth above.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇, Executive
ON COMMAND CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Chairman of the Board
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