Exhibit 10.7(b)
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 (the "Amendment") to Employment Agreement dated
January 21, 1994 (the "Employment Agreement") by and between Infonautics, Inc.,
a Pennsylvania corporation formerly known as Infonautics Corporation (the
"Corporation"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇ ("Employee") is made as of the 4th day of
November, 1996.
WHEREAS, the Board of Directors of the Corporation (the "Board") has
previously determined that it is in the best interests of the Corporation and
its shareholders to assure that the Corporation will have the continued
dedication of the Employee and to provide the Employee with compensation and
benefits that meet the expectations of Employee and are competitive with those
of employees at comparable levels at other corporations.
WHEREAS, to accomplish these objectives the Compensation Committee of the
Board has authorized the Corporation to enter into this Amendment.
NOW, THEREFORE, the parties hereto intending to be legally bound, agree as
follows:
1. Paragraph 5 of the Employment Agreement is hereby amended and restated
in its entirety to read as follows:
"5. At-Will Employment
(a) Employee's employment hereunder shall be "at will" and
either party shall have the rights to terminate this Agreement at any
time, pursuant to the following terms and conditions:
(1) Termination by Employee. Employee shall have the right
to terminate his employment hereunder by providing thirty (30)
days' prior written notice to the President of the Corporation.
Upon the effectiveness of such notice, this Agreement shall
terminate except for the provisions that expressly survive
termination.
(2) Termination for Cause. The Corporation shall have
the right to terminate Employee's employment by the Corporation
at any time for "Cause." For purposes of this Agreement,
"Cause" shall mean (a) dishonesty, misconduct, conviction of a
crime involving moral turpitude, use of alcohol or drugs in
such a manner or to an extent that job performance is impaired,
drug abuse, misappropriation of funds, disparagement of the
Corporation (or its management or employees), or (b) failure of
Employee to perform or observe any of the terms or
provisions of this Agreement or to comply fully with the lawful
directives of the Board of Directors of the Corporation or any
other proper cause determined in good faith by the Board of
Directors of the Corporation; provided, however, that
Employee's conduct shall not constitute "Cause" within the
meaning of (b) above unless and until (i) the Corporation shall
have provided Employee with notice setting forth with
specificity (A) the conduct deemed to constitute such "Cause,"
(B) reasonable action that would remedy the objectionable
conduct, and (C) a reasonable time (not less than 15 days)
within which Employee may take such remedial action, and (ii)
Employee shall not have taken such specified remedial action
within such specified reasonable time.
In the event of a termination for Cause, this Agreement shall
terminate except for the provisions which expressly survive
terminations, and Employee shall vacate the offices of the
Corporation.
(3) Termination without Cause. The Corporation shall have
the right to terminate Employee's employment by the Corporation
at any time without cause. Under such circumstances, the
Corporation shall pay to the Employee in a lump sum in cash
within 30 days of the date of such termination an amount equal to
the Employee's annual salary as determined on such termination
date. Notwithstanding the foregoing, payments to be provided
pursuant to this Section shall in all respects be conditioned
upon (i) the prior receipt by the Corporation from Employee of a
general release of all claims of any nature whatsoever which
Employee had, has or may have against the Corporation and related
parties relating to his employment by the Corporation (other than
his entitlement under any employee benefit plan or program
sponsored by the Corporation in which he participated and under
which he has accrued a benefit) or the termination thereof and
(ii) continued compliance by Employee with the provisions of this
Agreement that expressly survive termination.
(4) Excess Parachute Payments. Notwithstanding anything in
this Agreement to the contrary, if it shall be determined that
any payment or distribution by the Corporation to or for the
benefit of Employee pursuant to the terms of this Agreement or
otherwise (a "Payment") would constitute an "excess parachute
payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), as a result of a
"Change of Control" of the Corporation as defined in Section 11
of the Corporation's 1996 Equity Compensation Plan and that it
would be economically advantageous to the Corporation to reduce
the Payment to avoid or reduce the taxation of excess parachute
payments under Section 4999 of the Code, the aggregate present
value of the amounts
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payable or distributable to or for the benefit of Employee
pursuant to this Agreement (such payments or distributions
pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to
the Reduced Amount. The "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate present
value of Agreement Payments without causing any Payment to be
subject to taxation under Section 4999 of the Code. For purposes
of this Paragraph 5, present value shall be determined in
accordance with Section 280G(d)(4) of the Code. The calculations
under this Paragraph 5(a) shall be made as follows:
(i) All determinations to be made under this Paragraph
5(a) shall be made by the Corporation's independent public
accounting firm (the "Accounting Firm"), which firm shall
provide its determinations and any supporting calculations
to the Corporation and Employee within 10 business days of
the event that gives rise to the "excess parachute payment."
Any such determination by the Accounting Firm shall be
binding upon the Corporation and Employee. Employee shall
in his sole discretion determine which and how much of the
Agreement Payments shall be eliminated or reduced consistent
with the requirements of this Paragraph 5(a)(4). Within
five business days after Employee's determination, the
Company shall pay (or cause to be paid) or distribute (or
cause to be distributed) to or for the benefit of Employee
such amounts as are then due to Employee under this
Agreement.
(ii) As a result of the uncertainty in the application
of Section 280G of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is
possible that Agreement Payments will have been made by the
Corporation which should not have been made ("Overpayment")
or that additional Agreement Payments which have not been
made by the Corporation could have been made
("Underpayment"), in each case, consistent with the
calculations required to be made hereunder. Within two
years after the event that gives rise to the "excess
parachute payment," the Accounting Firm shall review the
determination made by it pursuant to the preceding
paragraph. If the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Employee which
Employee shall repay to the Corporation, together with
interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Code (the "Federal Rate");
provided, however,
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that no amount shall be payable by Employee to the
Corporation if and to the extent such payment would not
reduce the amount which is subject to taxation under
Section 4999 of the Code. In the event that the
Accounting Firm determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by
the Corporation to or for the benefit of Employee, together
with interest at the Federal Rate.
(iii) All of the fees and expenses of the
Accounting Firm in performing the determinations referred to
in subsections (i) and (ii) above shall be borne solely by
the Corporation. The Corporation agrees to indemnify and
hold harmless the Accounting Firm from any and all claims,
damages and expenses resulting from or relating to its
determinations pursuant to subsections
(i) and (ii) above, except for claims, damages or expenses
resulting from the gross negligence or willful misconduct of
the Accounting Firm.
(iv) The limitations of this Paragraph 5(a)(4) shall
only apply if payments under this Agreement are subject to
Section 280G at the time of the Change of Control.
(5) No Mitigation. Employee shall not be required to
mitigate the amount of any payment provided for in paragraph (3)
above by seeking other employment or otherwise. No other
employment or compensation from other sources or employers (such
as workers compensation) shall affect or reduce the amounts or
obligations of the Corporation to make payments to Employee under
this Agreement."
(b) This Agreement and all of Employee's rights hereunder shall
terminate upon the death of Employee, and neither Employee nor his estate shall
have any further rights hereunder, except for any unpaid compensation and
expense reimbursements through the date of death and except to the extent
otherwise provided in any applicable welfare or benefit plan of the Corporation
in which Employee is a participant at the date of death.
3. Paragraph 8(b) of the Employment Agreement is hereby amended to
replace all references to "Paragraph 5(a)(2)" with "Paragraph 5(a)(1)," all
references to "Paragraph 5(b)" with "Paragraph 5(a)(2)" and all references to
"Paragraph 5(a)(1)" with "Paragraph 5(a)(3)."
4. All references to "this Agreement" in the Employment Agreement shall
refer to the Employment Agreement as amended by this Amendment.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Amendment as of the date first above written.
INFONAUTICS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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Name:
Title:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇
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