AMENDMENT NO. 1 TO EXECUTIVE SERVICES AGREEMENT
Exhibit
(e)(10)
AMENDMENT
NO. 1 TO EXECUTIVE SERVICES AGREEMENT
This
Amendment No. 1 to Executive Services Agreement is made as of May 3, 2004 by and
between Simon Worldwide, Inc. (the “Company”) and Xxxx Xxxx (the
“Executive”).
Introduction
The
Company and the Executive have previously entered into an Executive Services
Agreement dated May 30, 2003 (the “Agreement”). The Company and the
Executive have also previously entered into a letter agreement dated February 7,
2003 whereby the Company agreed to compensate the Executive for, among other
things, the additional obligations, responsibilities and potential liabilities
of serving as the Company’s chief financial officer, including those under the
Xxxxxxxx-Xxxxx Act of 2002. The Executive has been instrumental in
helping the Company satisfy its liabilities and attain solvency over the
preceding years and is being asked to perform a significant role in determining
the future course of the business. In order to (i) ensure that the
Company might retain his knowledge, expertise and services in such endeavor,
(ii) induce the Executive to remain as chief financial officer since the
aforesaid letter agreement has expired and will not be renewed and (iii) retain
the continuing commitment of the Executive to provide the Company with the
substantial time and attention necessary to meet the needs of the Company, the
Company and the Executive agree that the Agreement shall be amended as
follows:
I. Section 2
of the Agreement shall be amended in its entirety to read as
follows:
“2. Compensation. For
Services rendered during the term of this Agreement, the Executive shall be
entitled to compensation in the amount and on the payment terms set forth on
Schedule A. The Executive shall also be entitled to reimbursement of
reasonable and necessary out-of-pocket expenses incurred by the Executive in the
ordinary course of business on behalf of the Company in accordance with Company
policy, subject to the presentation of appropriate documentation. In
addition, during the term of this Agreement the Executive and any dependants
shall be entitled to participate at no cost to the Executive in a health
insurance plan maintained by the Company at substantially the same benefit level
as of the date hereof, and along with any dependents shall be eligible to
participate in C.O.B.R.A. coverage at the expense of the Company following
termination of employment hereunder for as long as then permissible under
C.O.B.R.A. and at the same benefit level as of the date hereof.”
II. Section 3
of the Agreement shall be amended in its entirety to read as
follows:
“3. Term. The
Executive’s engagement by the Company hereunder shall commence on the date
hereof and continue until terminated by either party in accordance with this
Section 3. Such engagement may be terminated by either party without
cause as follows: The Company may terminate this Agreement at any
time by giving notice of termination to the Executive and making a lump sum
payment to the Executive equivalent to one (1) year compensation at the rate set
forth on Schedule A, and no further Services will be required. The
Executive may terminate this Agreement by giving one (1) year prior written
notice to the Company and during such one (1) year notice period the Maximum
Hours Per Week set forth on Schedule A shall be applicable. Following
termination of this Agreement, the Company shall pay to the Executive all
compensation and benefits that had accrued, and shall reimburse all expenses
incurred by the Executive, prior to the date of termination in accordance with
Section 2 hereof, and the Company will provide at its sole expense health care
insurance to the Executive under C.O.B.R.A. as provided in Section 2
above. The provisions of Section 4 through 13 hereof and the
C.O.B.R.A. obligations set forth in Section 2 shall survive the termination of
the Agreement and shall continue thereafter in full force and
effect.”
III. Section 4
of the Agreement shall be amended in its entirety to read as
follows:
“4. Termination By Executive Under
Certain Circumstances. Notwithstanding any other provision
hereof, in the event that (i) the composition of the Company’s Board of
Directors changes from the date hereof by the addition or deletion of a total of
two or more Directors, (ii) the Company fails to maintain D&O insurance as
provided in Section 6 below or (iii) there is a change of control of the
Company, defined as (a) the acquisition by any person or group of beneficial
ownership, direct or indirect, of securities of the Company representing 50% or
more of the combined voting power of the Company’s then outstanding equity
securities or (b) the merger or consolidation of the Company with or into, or
the sale or assignment of all or substantially all the assets of the Company to,
another person or entity, provided that following such transaction the holders
of voting stock of the Company immediately prior to such transaction do not own
more than 50% of the voting stock of the company surviving such transaction or
to which such assets are sold or assigned, then, in any of such events, in
addition to any other rights of the Executive under this Agreement, the
Executive may at any time within six (6) months following such change of control
terminate this Agreement and the Company shall then pay to the Executive a lump
sum payment equivalent to one (1) year compensation at the rate set forth on
Schedule A, and no further Services will be required. The Executive
shall also be entitled to receive C.O.B.R.A. health insurance at the Company’s
expense and any other payments as provided in Section 2 above.”
All other
terms and provisions of the Agreement shall remain in full force and
effect. This Amendment No. 1 to Executive Services Agreement has been
executed and delivered as of the date first above written.
SIMON
WORLDWIDE, INC.
By: /s/ Xxxxxx
Goellher
Xxxxxx
Goellher
Director
By: /s/ Xxxxxxxx X.
Xxxxxxx
Xxxxxxxx
X. Xxxxxxx
Assistant
Secretary
The
Executive
/s/ Xxxx
Xxxx
Xxxx
Xxxx
