EXHIBIT 10.14
AMENDMENT NO. 1
TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment") is entered into by and between
XXXXXX INTERACTIVE SYSTEMS, INC. (the "Company") and XXXXXXX X. XXX
("Executive"), effective March 4, 1998.
WITNESSETH
WHEREAS, the Company and Executive entered into an Executive Employment
Agreement effective June 25, 1995 (the "Employment Agreement");
WHEREAS, the parties desire to modify certain provisions in the Employment
Agreement in order to provide Executive greater benefits than those provided by
the Employment Agreement in return for Executive's continued service to the
Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto:
2. SUBSTITUTION OF PROVISIONS. The following provisions shall replace Sections
7.1(a) and 7.1(b) of the Employment Agreement:
7.1 COMPANY INITIATED TERMINATION.
10.16.1 If within the first six (6) months of
Executive's employment with the Company, the Company
terminates Executive's employment without cause or
Executive terminates employment because the Company has
reduced Executive's responsibilities, functions, titles,
or overall compensation package, Executive shall
receive, as severance: (i) continued payment of
Executive's base salary for twelve (12) months from the
Effective Date, (ii) continued health care benefits for
twelve (12) months from the Effective Date following
Executive's date of termination under the federal COBRA
law; (iii) accelerated vesting of any and all shares
pursuant to any and all stock options granted to
Executive such that all shares which otherwise would
have vested on or before the end of the twelfth month
following the Effective Date had Executive's termination
not occurred until the end of such period will be deemed
vested as of the date of the Executive's termination;
and (iv) six (6) months after the date of Executive's
termination to exercise any and all vested shares
subject to any and all stock options granted to
Executive (provided that any such extension shall not
extend the maximum term
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during which any such option may be exercised beyond ten
(10) years).
If after the first six (6) months of Executive's employment with the
Company, the Company terminates Executive's employment without cause or
Executive terminates employment because the Company has reduced Executive's
responsibilities, functions, titles, or overall compensation package, the
Executive shall receive, as severance: (i) continued payment of Executive's base
salary for twelve (12) months; (ii) continued health care benefits for twelve
(12) months following Executive's termination of employment under the federal
COBRA law; (iii) accelerated vesting of any and all shares pursuant to any and
all stock options granted to Executive such that all shares which otherwise
would have vested on or before the end of the sixth month following the date of
Executive's termination, with respect to all stock options granted to Executive
prior to March 4, 1998, and the twelfth month following the date of Executive's
termination, with respect to all stock options granted to Executive on or
subsequent to March 4, 1998, will be deemed vested as of the date of the
Executive's termination; and (iv) with respect to all stock options granted to
Executive prior to March 4, 1998, six (6) months, and with respect to all stock
options granted to Executive on or subsequent to March 4, 1998, twelve (12)
months, after the date of Executive's termination to exercise any and all vested
shares subject to any and all stock options granted to Executive (provided that
any such extension shall not extend the maximum term during which any such
option may be exercised beyond ten (10) years). For purposes of this Section
7.1 (a), the second option as described in Section 2.d. shall be considered to
have vested at the rate of 2.0833% per month over 48 months beginning from the
Effective Date.
10.16.2 Notwithstanding Section 7.1(a) above,
if the Company (i) merges or combines with any other
company or entity in a manner which produces a change of
control; (ii) sells all or substantially all its assets
to any other company or entity; (iii) has forty percent
(40%) or more of its stock acquired by a person and/or
affiliates of such person, the Executive shall receive:
(i) continued payment of base salary for twenty-four
(24) months following Executive's date of termination
for any reason; (ii) continued health care benefits for
twenty-four (24) months following Executive's
termination of employment under the federal COBRA law;
(iii) accelerated vesting of any and all shares,
pursuant to any and all stock options granted to
Executive; and (iv) with respect to all stock options
granted to Executive prior to March 4, 1998, twelve (12)
months, and with respect to all stock options granted to
Executive on or subsequent to March 4, 1998, twenty-four
(24) months, after the date of Executive's termination
of employment for any reason to exercise any and all
vested shares subject to any and all stock options
granted to Executive (provided that any such extension
shall not extend the maximum term during which any such
option may be exercised beyond ten (10) years). For the
purposes of this agreement, "change of control"
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means a merger or consolidation in which the Company is
not the surviving corporation, or in which the
shareholders of the Company immediately prior to the
merger or consolidation do not hold a majority of the
shares of the resulting corporation.
3. TAX CONSEQUENCES. Executive acknowledges that he has been advised by the
Company to consult with a tax advisor or attorney with respect to the tax
consequences, if any, of these amendments to his stock option grants.
4. AFFIRMATION. Subject to the foregoing modifications to Section 7.1(a) and
7.1(b), the Company and Executive each hereby affirm all of the terms and
conditions of the Employment Agreement, and acknowledge that the Employment
Agreement is a binding agreement between the Executive and the Company.
5. ENTIRE AGREEMENT. This Amendment, together with the Employment Agreement,
contains the entire agreement between the parties and constitutes the
complete, final and exclusive embodiment of their agreement with respect to
the subject matter. This Amendment is executed without reliance upon any
promise, warranty or representation, written or oral, by any party or any
representative of any party other than those expressly contained herein and
it supersedes any other such promises, warranties or representations.
IN WITNESS WHEREOF, the parties have duly authorized and caused this
Amendment to be executed as follows:
XXXXXXX X. XXX XXXXXX INTERACTIVE SYSTEMS, INC.
/s/ Xxxxxxx X. Xxx By: /s/ Xxxxxxx X. Xxxxxx
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Date: May 15, 1998 Title: Chair, Comp. Committee, BOD
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Date: May 15, 1998
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