Exhibit 10.2
CMG INFORMATION SERVICES, INC.
AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
October 25, 1996
Xx. Xxxxx X. Xxxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000
Dear Xxxx:
This Amendment No. 2 to Employment Agreement amends the Employment
Agreement between you and CMG Information Services, Inc. (the "Company") dated
as of November 9, 1993 (the "Employment Agreement"). In connection with the
amendment of the Employment Agreement, you and the Company agree as follows:
1. Amendment of Employment Agreement. Section 4 of the Employment
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Agreement is hereby deleted in its entirety and replaced with the following
which is effective as of October 25, 1996, with respect to the entire 300,000
share option (all numbers are split-adjusted as of October 25, 1996):
4. Grant of Non-Qualified Stock Option. On November 9, 1993, the
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Company granted to you a non-qualified stock option (the "Option") under
its 1986 Stock Option Plan (the "Plan") to purchase, under the conditions
herein stated, up to three hundred thousand (300,000) shares of the
Company's Common Stock at an option price of $4.00 per share (amended in
January of 1994 to be $2.67 per share), which prices were determined by the
Compensation Committee to be fair market value on November 9, 1993 and in
January, 1994, respectively. This Option was granted by the Company
pursuant to, and subject to the terms and conditions of, the Plan (which
terms and conditions are hereby incorporated herein by reference as fully
as if set forth herein, except if contrary or supplementary terms are set
forth in this Employment Agreement, in which case such terms shall take
precedence over those in the Plan). As of October 25, 1996, this Option
shall became exercisable as follows:
(a) This Option shall become exercisable as to 30,000
shares on each November 1 of the Term of Employment upon the
attainment of annual performance milestones determined from time to
time by the Compensation Committee in its sole discretion with respect
to the performance of the Company and its affiliates during the prior
fiscal year, and, in any event, shall become exercisable (to the
extent not previously exercisable) as to the first 150,000 shares on
November 1, 1998, and as to the second 150,000 shares on November 1,
2003, if you are employed by the Company on such dates. As of
November 1, 1996, this Option is exercisable as to ninety thousand
(90,000) shares.
(b) In the event of termination of the Term of Employment
pursuant to subparagraph (iv) of paragraph 2 above, or in the event
the Term of Employment is not extended for an additional five years as
provided in Section 2, the Option shall become exercisable on the date
of such termination as to a percentage of 30,000 shares of the
Company's Common Stock for each July 31 following the date of such
termination up to and including July 31, 2003 (but not to exceed three
such dates or 90,000 shares), equal to the percentage of the maximum
number of options which could have become exercisable represented by
the number of those options which have become exercisable, after
giving effect to the following paragraph (c). For example, if your
employment were terminated on September 1, 1999, with a remaining term
hereof ending July 31, 2003, and your Option had as of that date
(after giving effect to the following subparagraph (c)) become
exercisable for 60% of the aggregate maximum of 180,000 shares as to
which it might have become exercisable with respect to the fiscal
years ending prior to the termination date, it would become
exercisable under this clause (b) for 60% of 30,000 shares, or 18,000
shares for a maximum of three of the July 31sts following termination,
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or an additional 54,000 shares (all numbers are split-adjusted as of
October 25, 1996).
(c) In the event that your Term of Employment hereunder is
terminated pursuant to subparagraph (iv) of paragraph 2 during August,
September or October of any year, the portion of the Option becoming
exercisable on the succeeding November 1 shall be deemed to have
become exercisable on the date of such termination.
Whenever any formula determined by the Compensation Committee relating
to the vesting of your Option results in a fraction of a share, it shall be
rounded up to the next full share.
This Option shall terminate as to the unexercised portion thereof on
November 30, 2003; or on November 30, 1998, if the Term of Employment is
not extended for five years under Section 2.
The Company may, if so determined in the sole discretion of its Board
of Directors, pay to you cash for the purpose of enabling you to provide
for your income tax obligation arising out of any vesting or exercise of
your Option, in lieu of such number of shares (or a portion thereof)
becoming vested or issued to you upon such exercise, all as the Board of
Directors may determine. Cash paid to you hereunder shall be in an amount
equal to the fair
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market value of shares retained following exercise or cancelled following
vesting, valued on the date on which the amount of tax is determined. You
shall also have the benefit of Articles 14 and 17 of the Plan.
2. Conforming Amendments. The reference to paragraph 4(g) in Section 5 of
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the Employment Agreement shall be changed to a reference to paragraph 4(c). The
reference to paragraph 4(f) of the Employment shall be changed to a reference to
paragraph 4(b).
3. Continuing Effect of Employment Agreement. Except as amended hereby,
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the Employment Agreement shall remain in effect according to its original terms.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized represented and its corporate seal to be hereunto affixed
and you have hereunto set your hand and seal this 25th day of October, 1996.
CMG INFORMATION SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx
By: /s/ Xxxx X. XxXxxxxx
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Xxxx X. XxXxxxxx
ACCEPTED AND AGREED TO:
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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