Exhibit 10.5
FIRST AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 13th day of January, 1999 by
and between Xxx Xxxxxx, a resident of 000 Xxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (the "Employee"), and BLUESTONE SOFTWARE, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
and successor by merger to Bluestone Consulting Inc., a New Jersey corporation.
BACKGROUND
A. On April 18, 1997, Employee and the Company entered into an
Executive Employment Agreement (the "Employment Agreement"); and
B. The Company and Employee now desire to amend the Employment
Agreement, subject to the terms and condition hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:
1. Section 1 of the Employment Agreement shall be amended such
that the term "Position" shall mean Chairman of the Board and the term "Initial
Term" shall continue until June 30, 1999. Effective as of the date hereof,
Employee shall no longer hold the title of President or Chief Executive Officer.
2. The first sentence of Section 1(b) of the Employment
Agreement shall be deleted and replaced as follows:
"This Agreement may be renewed on or before June 30, 1999, for
such time (the "Renewal Period") and upon such terms as are approved by the
Board of Directors of the Company (the "Board") after recommendation by the
President of the Company. The recommendation for renewal shall include an
objective compensation and bonus plan for twelve months, together with an
evaluation of Employee's performance against reasonable objectives for the first
six months of 1999."
3. Schedule A shall be deleted.
4. Section 3.2 of the Employment Agreement shall be amended to
delete the first sentence and replace it as follows:
"Within thirty days of the date hereof, Employee and the
President of the Company will agree in writing on reasonable performance
objectives for Employee for the first six months of
1999. Employee's bonus and management stock options will be based upon these
objectives, drawn from the management compensation and stock option pools that
will be used in 1999 for other management employees."
5. Employee's Contingent Shares, as defined in the Stock
Repurchase Agreement, dated as of April 18, 1997 (the "Repurchase Agreement")
shall continue to vest in accordance with the terms of the Repurchase Agreement
for as long as Employee remains in the Position, subject to the provisions
regarding termination herein.
6. If Employee is terminated from the Position, or the
Employment Agreement is not renewed in accordance with Section 1(b) of the
Employment Agreement as amended in paragraph 2 herein, he shall retain his
position as a director on the Board as long as he: 1) retains at least ten
percent (10%) ownership of the issued and outstanding Common Stock of the
Company, determined on a fully converted basis assuming conversion of all
outstanding convertible securities and exercise of all outstanding options,
warrants or rights to acquire Common Stock; or 2) until June 30, 2000, whichever
is later.
7. If Employee is terminated from the Position in accordance
with Section 8.5 of the Employment Agreement, or the Employment Agreement is not
renewed in accordance with Section 1(b) of the Employment Agreement as amended
in paragraph 2 herein, he will receive twelve (12) months of 1998 base salary as
severance, grossed up for benefits and taxes. Such severance will be payable in
accordance with the Bluestone payroll schedule.
8. If Employee is terminated from the Position in accordance
with Section 8.5 of the Employment Agreement, or the Employment Agreement is not
renewed in accordance with Section 1(b) of the Employment Agreement as amended
in paragraph 2 herein, his Contingent Shares under the Repurchase Agreement will
immediately become Vested Shares, as defined in the Repurchase Agreement.
9. The receipt of the payments and benefits to be provided to
Employee under Sections 6, 7 and 8 of this Agreement are conditional upon
Employee executing and delivering to the Company a mutual release in the form
attached hereto as EXHIBIT A.
10. If Employee is terminated from the Position in accordance
with Section 8.3 of the Employment Agreement, he will not receive any severance
and will immediately forfeit his Board seat and any other employee title in the
Company.
11. The Employment Agreement will terminate automatically if
the shares of the Company are registered in a public offering of its securities,
or there is a merger where the Company is not the surviving company, a sale of
all the Company's stock, or a sale of substantially all the assets of the
Company.
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12. Employee shall not, in connection with any matter relating
to his employment with the Company, knowingly and intentionally disparage the
Company or its predecessors, successors (by merger or otherwise), parents,
subsidiaries, affiliates and assigns, together with each and every of their
present, past and future officers, directors, shareholders and employees (herein
collectively referred to as the "Company Group"). The Company represents that,
as of the date of this Agreement, there are no documents in Employee's personnel
file in which the Company has intentionally and knowingly disparaged Employee
and the Company on its behalf and on behalf of the Company Group further agrees
that neither it nor any member of the Company Group shall knowingly or
intentionally disparage Employee in the future for matters relating to his
employment with the Company.
13. The Company will reimburse Employee for reasonable
expenses in connection with a legal review of this Agreement.
14. Except as amended herein, the Employment Agreement will
remain in full force effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed on the day and year first written above.
BLUESTONE SOFTWARE, INC.
By:
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Title:
WITNESS:
/s/ Xxx Xxxxxx
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Name: XXX XXXXXX
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