Exhibit 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT FOR EXECUTIVE OFFICER
THIS AMENDMENT TO EMPLOYMENT AGREEMENT FOR EXECUTIVE OFFICER
("Agreement") made the 13TH day of December, 1998, between STB SYSTEMS,
INC., a Texas corporation (the "Company"), and XXXXX X. XXXXXXX
("Executive").
WHEREAS, Executive and the Company have executed an Employment Agreement
dated as of November 1, 1996 (the "Employment Agreement"); and
WHEREAS, under an Agreement and Plan of Reorganization dated as of
December 13, 1998 (the "Merger Agreement"), the Company will become a
wholly-owned subsidiary of 3Dfx Interactive, Inc., a California corporation
("3Dfx"); as of the Effective Time (as defined in the Merger Agreement) (the
"Merger"); and
WHEREAS, at the Effective Time of the Merger, 3Dfx will assume the
Employment Agreement and become the employer thereunder; and
WHEREAS, Executive and the Company desire to set forth in this Agreement
the amended terms for Executive's continued employment following the Merger.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties agree as follows:
FIRST
The terms of this Agreement shall become effective only at the Effective
Time of the Merger, at which time 3Dfx shall assume the Employment Agreement,
as amended by this Agreement, and all references in such Employment Agreement
and this Agreement to the "Company" shall be deemed to refer to 3Dfx.
Paragraphs 1 and 2 of the Employment Agreement will be amended in their
entirety to provide as follows:
"1. EMPLOYMENT. The Company hereby agrees to employ Executive and Executive
hereby agrees to serve the Company, on the terms and conditions set forth
herein, for the period commencing on the Effective Time of the Merger and
expiring on the date that is the one year anniversary of such date (unless
sooner terminated as hereinafter set forth); provided, however, that
commencing on such anniversary date, and each annual anniversary of such date
thereafter, the term of this Agreement shall automatically be extended for
one additional year unless, at least 30 days prior to any such anniversary
date, the Company or the Executive shall have given notice that it does not
wish to extend this Agreement. The term of this Agreement, as it may from
time to time be extended in accordance with this Paragraph, may be referred
to herein as the "Period of Employment."
2. POSITION AND DUTIES. Executive shall serve as the Senior Vice
President for Finance & Strategic Planning for the Company, performing the
functions and duties as shall be prescribed from time to time provided that
such functions and duties are consistent with and attendant to Executive's
position or other positions that he may hold from time to time. Executive
shall devote his full working time and efforts to the business and affairs of
the
Company and the promotion of its interests and perform all duties and
services on behalf of the Company necessary to carry out such functions."
SECOND
Subparagraph 3c of the Employment Agreement will be deleted in its
entirety. Subparagraphs 3a and 3b of the Employment Agreement will be
amended in their entirety to read as follows:
"3. COMPENSATION AND RELATED MATTERS.
a. BASE SALARY. Executive shall receive an annual base salary
("Base Salary") at the rate of Two Hundred Twenty-five Thousand Dollars and
No/100 Cents ($225,000.00) during the period ending on the first anniversary
of the Effective Time of the Merger. Thereafter, Executive's Base Salary
shall be redetermined at least 30 days before each annual anniversary in an
amount to be fixed by the Board of Directors of the Company or the
Compensation Committee thereof. The term "Base Salary" as used in this
Agreement shall mean, at any point in time, Executive's annual base salary at
such time. The Base Salary shall be payable in substantially equal
semi-monthly installments or in accordance with the Company's regular payroll
practices.
b. INCENTIVE COMPENSATION. In addition to Base Salary, Executive
shall participate in the Company's incentive compensation plan for its senior
executive management employees."
THIRD
Subparagraph 9c of the Employment Agreement will be amended to delete
therefrom Subsection (A) in its entirety. Subsection (C) of the definition
of "Good Reason" in Subparagraph 9d of the Employment Agreement will be
amended in its entirety to reflect more clearly the original intent of the
parties, to read as follows:
"(C) without Executive's consent, a reduction of Executive's Base Salary
to an amount less than previously determined and fixed for the immediately
preceding twelve-month period by the Compensation Committee in accordance
with Subparagraph 3(a) other than a reduction deemed necessary by the Board
for all executive officers;"
FOURTH
Paragraph 11 of the Employment Agreement will be amended by substituting
the following paragraph in lieu of the first paragraph thereof:
"The provisions of this Paragraph 11 of the Agreement set forth certain
terms of an agreement reached between Executive and the Company regarding
Executive's rights and obligations upon the occurrence of a Change in Control
of the Company. These provisions are intended to assure and encourage in
advance Executive's continued attention and dedication to his assigned duties
and his objectivity during the pendency and after the occurrence of any such
event. These
provisions shall apply in lieu of, and expressly supersede, the provisions of
Subparagraph 10(d)(ii) regarding severance pay upon a termination of
employment, if such termination of employment occurs within 12 months after
the occurrence of the first event constituting a Change of Control, or if
such termination of employment occurs under certain circumstances after the
Merger. These provisions shall terminate and be of no further force or effect
12 months after the occurrence of a Change of Control or, the Merger, as the
case may be, Section 11(c) shall be the sole provision under which payments
may be made in connection with the Merger; that is, to the extent Section
11(c) applies, Section 11(b) shall not."
FIFTH
Paragraph 11 of the Employment Agreement will be amended by adding the
following subparagraph (c), and by renumbering the current subparagraph (c)
as subparagraph (d):
"(c) TERMINATION OF EMPLOYMENT FOLLOWING THE MERGER. If Executive's
employment terminates during the 12 months following consummation of the
Merger for any reason (other than his Voluntary Resignation on or prior to
May 31, 1999), the Company shall pay Executive or his estate an amount equal
to the applicable Parachute Payment Amount in a lump sum on the thirtieth day
following Executive's termination. After the first anniversary of the Merger,
this Section 11(c) shall be of no-force and effect. For purposes of this
subparagraph 11(c) only, the Severance Payment Amount payable under
Subparagraph 10(d)(ii) hereof shall be computed utilizing Executive's Base
Salary in effect on October 31, 1998, Executive's incentive compensation
earned in the eight full quarters ending October 31, 1998, and Executive's
sales commissions earned in the 24 full months preceding October 31, 1998."
SIXTH
Paragraph 11(d) of the Employment Agreement will be amended by adding
the following provision:
"MERGER" shall mean the Change in Control occurring as a result of the
merger of a newly formed, wholly-owned subsidiary of 3Dfx with and into STB
Systems, Inc., in accordance with that certain Merger Agreement dated as of
December 13, 1998."
SEVENTH
Paragraph 12 of the Employment Agreement will be amended in its entirety
to provide as follows:
"12. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as
follows:
if to the Executive:
At his home address as shown
in the Company's personnel records;
if to the Company:
3Dfx Interactive, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt."
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth above.
STB SYSTEMS, INC.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxx
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XXXXX X. XXXXXXX By:
Its.: Chief Executive Officer
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