April 2, 2007 Mark McMillan Insignia Solutions, Inc.
Exhibit
10.2
April
2,
2007
Xxxx
XxXxxxxx
Insignia
Solutions, Inc.
00
Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx,
XX 00000
RE:
Amended Restated Bonus and Change of Control Letter Agreement
Dear
Xxxx:
As
you
know, Insignia Solutions plc (the “Company”)
entered into that certain Asset Purchase Agreement by and among Xxxxx Micro
Software, Inc., IS Acquisition Sub, Inc., the Company and certain subsidiaries
of the Company, dated February 11, 2007 (the “Asset
Purchase Agreement”)
whereby the Company will sell substantially all of its assets to Xxxxx Micro
Software, Inc. (“SMSI”) or certain of its wholly owned subsidiaries (the
“Asset
Sale”).
You
entered into a letter agreement with the Company, dated December 11, 2006 (the
“Prior
Letter”),
providing for the payment of a bonus and change of control benefits in the
event
of a change of control of the Company, such as the Asset Sale, and providing
for
severance payments under certain circumstances. A copy of the Prior Letter
is
attached hereto as Exhibit A. This letter agreement (the “Agreement,”)
is
intended to clarify the Company’s obligations with respect to such payments in
connection with the Asset Sale, and supersedes in its entirety the Prior Letter.
Terms not otherwise defined herein shall have the meaning ascribed to them
in
the Asset Purchase Agreement.
Bonus
Initial
Bonus Payments
As
soon as is administratively practicable (and in no event later than fourteen
(14) business days) following the Closing Date, you will be entitled to receive,
and the Company shall pay to you, a lump-sum cash payment equal to $180,000.
As soon
as is administratively practicable thereafter (and following determination
or
estimation of th amount of any Excluded Liabilities), but in no event greater
than eight weeks following the Closing Date, you will be entitled to receive,
and the Company shall pay to you, a second lump-sum cash payment equal to four
percent (4%) of the product of (a) the
Purchase Price less (b) the sum of (i) the Holdback Amount, (ii) $180,000 and
(iii) the dollar amount, determined as of the Closing Date, and in accordance
with GAAP, of the Excluded Liabilities (the
“Post-Closing
Bonus Payment”),
in no
event shall this second payment exceed $27,000.. You will be required to repay
any portion of the Post-Closing Bonus Payment to the Company in the event that
the Company shall be required to make any indemnification or other payments
to
SMSI or any of its affiliates.
Holdback
Bonus Payment.
You
will also be entitled to receive, and the Company shall pay to you, an
additional lump-sum cash payment equal to four percent (4%) of such portion
of
the Holdback Amount that is paid to the Company, to be paid to you as soon
as is
administratively practicable following the payment to the Company of such
portion of the Holdback Amount (the “Holdback
Bonus Payment”).
Change
in Control Benefits
In
connection with the Asset Sale, you will be entitled to receive, and the Company
shall pay to you, a lump-sum cash payment equal to $345,000 (which represents
the sum of (i) twelve (12) months’ of your annual base salary as in effect on
the date hereof plus (ii) 100% of your Company target bonus for fiscal year
2007
(collectively, the “CiC
Payment”).
The
Company will pay you the CiC Payment as soon as is administratively practicable
(and in no event later than fourteen (14) business days) following the Closing
Date. You expressly acknowledge that you will not be entitled to any accelerated
vesting of your options to purchase ordinary shares of the Company in connection
with the Asset Sale. Further, to the extent that you do not participate in
an
SMSI health insurance plan, then the Company will pay you the monthy amount
of
the COBRA premiums for the period that you do not participate for you and your
eligible dependents calculated as if you had terminated employment with the
Company as of the day immediately prior to the Closing Date (the “COBRA
Payment”).
Subsequent
Transaction Bonus.
In the
event that, following the Closing, a third party shall acquire all of the
capital stock of the Company, or shall merge with or into the Company (the
“Subsequent
Transaction”),
and at
the closing date with respect to such Subsequent Transaction, you continue
to be
a member of the board of directors of the Company, then you shall be entitled
to
an additional bonus (the “Subsequent
Transaction Bonus”)
equal
to four percent (4%) of the amount of the aggregate increase in value returned
to the Insignia Shareholders. The “aggregate increase in value returned to the
Insignia Shareholders” shall equal the amount of cash consideration payable to
the shareholders of the Company in such transaction, if the Subsequent
Transaction is a transaction in which cash consideration is paid to the
shareholders of the Company, and in any other type of transaction, the
“aggregate increase in value returned to the Insignia Shareholders” will equal
the product of (a) the average closing price of the Company’s shares over the
ten days following the closing of the subsequent transaction, minus (b) the
product of (i) the Purchase Price minus (ii) such portion of the Holdback Amount
as has not been paid to the Company, and minus (iii) the dollar amount,
determined as of the Closing Date, and in accordance with GAAP, of the Excluded
Liabilities. The Subsequent Transaction Bonus shall be paid to you as soon
as is
administratively practicable following the consummation of such Subsequent
Transaction.
Escrow.
If
you
should so request following the Closing Date, upon a change in management of
the
Company or if a majority of the members of the Board of Directors of the Company
should cease to consist of persons who were directors or officers of the Company
on the date hereof, funds sufficient for payment in full of the Holdback Bonus
Payment shall be placed in escrow at a bank under terms that provide for payment
to you within fourteen business days of receipt of any portion of the Holdback
Amount by the Company.
Witholding.
The
Post-Closing Bonus Payment, the Holdback Bonus Payment, the CiC Payment, the
COBRA Payment and the Subsequent Transaction Bonus Payment shall each be subject
to applicable witholding taxes, and the amount thereof to be paid to you shall
be net of any amounts that the Company is required to withold under applicable
law.
Parachute
Payments
In
the
event that any of the payments hereunder, including, without limitation, the
Post-Closing Bonus Payment, the Holdback Bonus Payment, the CiC Payment, the
COBRA Payment and the Subsequent Transaction Bonus received by your or to be
received by you would constitute a “parachute payment” within the meaning of
Section 280G of the United States Internal Revenue Code of 1986, as amended
(the
“Code”)
or any
similar or successor provision would be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise
Tax”),
then
any such payments shall be payable, at your election, either in full or in
such
lesser amount (as specified by you) as would result, after taking into account
the applicable federal, state and local incomes taxes and the Excise Tax, in
your receipt on an after-tax basis of the greatest amount of any of such
payments.
Miscellaneous
This
Agreement expressly supersedes in its entirety the Prior Letter and any other
prior arrangement that you may have that addresses the subject matter discussed
herein. The terms of this Agreement may only be changed by written agreement
between you and the Company.
Very
truly yours,
/s/
Xxxxxxxx Bearsted_
Chairman
of the Board of Directors
I
agree
to the terms as set forth in this Agreement.
/s/
Xxxx McMillan___________________________ Date:
April
2, 2007___
Xxxx
XxXxxxxx
