AMENDMENT TO EMPLOYMENT AGREEMENT
AMENDMENT
TO EMPLOYMENT AGREEMENT
This
Amendment to the EXECUTIVE EMPLOYMENT AGREEMENT dated 5/1/05 (the “Agreement”)
is entered into as of June 30, 2005, by and between International Microcomputer
Software, Inc., a California corporation, (“IMSI”) and Xxxxxx X. Xxxxxxx
(“Executive”).
Whereas,
IMSI
desires to retain the services of Executive in an active capacity until certain
dates or conditions are met; and
Whereas,
Executive
is willing to accept continued employment by IMSI on the terms and subject
to
the conditions set forth in this Agreement;
NOW,
THEREFORE,
in
consideration of the premises and the covenants contained herein, the Parties
agree as follows:
1
Employment - IMSI
hereby agrees that, effective as of the earlier of February 28, 2006, or
voluntary resignation Executive shall be considered “terminated without cause”
under paragraph 3 (a) of the Agreement between IMSI and Executive. The terms
of
employment of Executive before such termination and severance, and upon
severance, shall be as set out in the Agreement as amended by this Amendment.
Executive agrees to full time employment by IMSI until 2/28/06. Executive shall
have the position of President until one of the dates in paragraph 2 below.
After Executive ceases to be President, Executive shall become a non-executive
employee until the earlier of 2/28/06 or his voluntary resignation.
2
Dates - Executive
shall continue to be employed as President of IMSI until the earliest of the
following:
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(a)
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The
date of the sale of substantially all of the CAD or other software
product
assets of IMSI.
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(b)
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The
date that the “IMSI” name of the company is changed.
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(c)
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The
closing date of any future transaction resulting in an issuance of
10
million or more shares of common stock of
IMSI.
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(d)
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February
28, 2006.
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(e)
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A
date on which the Executive becomes deceased or
disabled.
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3
Compensation -
IMSI
shall compensate Executive as follows:
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(a)
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Base
Salary
-
IMSI shall pay Executive $195,000 per year ($16,250 per month) in
salary
payable on the 15th
and the last day of each month as regular pay until 2/28/05 and shall
begin to pay severance pay to Executive as of March 1, 2006.
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(b)
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Options
- Effective
2/28/06, all unvested options and warrants held by Executive shall
immediately vest and the right to exercise them shall survive for
three
years thereafter, unless the option or warrant granted has longer
expiration terms, in which case the longer term shall be the time
available for exercise.
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Bonuses
-
Executive will earn quarterly bonuses for the September and December quarters
of
2005 based upon reaching the Company Operating, Net Income or Balance Sheet
goal
for the then-current fiscal year. Any unearned bonuses from previous quarters
in
that fiscal year shall be payable to Executive 45 days after the end of full
time employment. In the event IMSI sells off all or substantially all of the
CAD
products or completes a transaction that would result in more than 10 million
shares being issued, Executive shall be deemed to have earned the full amount
of
the quarterly bonus for the September and December 2005 quarters. During the
2006 fiscal year of employment, Executive will be entitled to earn additional
cash bonuses as follows: a) $100,000 for the sale of any asset, company or
product line of IMSI where the net sales price is in excess of $2,000,000 but
less than $5,000,000; and b) 2.0% for the sale of any asset, company or product
line of the company where the net sales price is in excess of $5,000,000.
Payment of bonuses earned by Executive as a result of the sale of assets,
products or companies shall be made to Executive 15 days after the effective
sale date of such assets. In the event of a sale, merger or consolidation of
the
Company with or into another entity or any other corporate reorganization which
results in a net share price of IMSI greater than $1.50 immediately following
completion of the transaction, Employee shall be entitled to and paid a bonus
of
$150,000, which shall be immediately due and payable.
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(c)
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Executive
Benefits
-
Shall remain the same until 2/28/05 as in the EXECUTIVE EMPLOYMENT
AGREEMENT dated 5/1/05.
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(d)
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Incentive
Plans
-
Executive shall be covered under and participate in any incentive
compensation, bonus, discretionary pay, or performance award plans,
programs, polices, arrangements, or any stock option or stock appreciation
rights plans which IMSI may have or put into effect for its execu-tives
(Incentive Plans).
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(e)
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Severance
-
Upon Executive’s completion of his employment through February 28, 2006,
IMSI shall pay Executive i) his full base salary for an additional
twenty
four (24) months, and ii) Executive Benefits and Incentive Plans
for an
additional twenty four (24) months, such payment to be paid to Executive
on a semi-monthly basis beginning as of
3/1/06.
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(f)
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Termination
by Executive
-
Executive may terminate his employment agreements with IMSI at any
time
prior to the dates listed in paragraph 2 above. In any such case,
IMSI
shall continue to pay his base salary and medical and dental benefits
for
twelve (12) months after the date of any such termination.
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4
Additional Provisions Relating to Payments - If
IMSI
finds that, at the time any payment is due under this Agreement, Executive
is
unable to care for his affairs because of illness or accident, payment (unless
a
duly qualified guardian or other legal representative of Executive has made
IMSI
an ear-lier claim for it) may be paid to any individual deemed by IMSI to be
maintaining Executive or responsible for Executive’s maintenance, and any such
payment shall be deemed to be payment for the Executive’s account and shall be a
complete discharge of any liability under this Agreement. IMSI will honor any
request made prior to his disability by Executive regarding such payments.
IMSI
may withhold from any amounts payable under this Agreement all federal, state,
city or other taxes as required under any law or government regulation or
ruling.
5
Governing Law -
This
Agreement shall be construed and its performance enforced in accordance with
the
laws of the State of California, excluding its choice of law
provisions.
6
Modifications - Any
and
all modifications, amendments, or additions to this Agreement shall be in
writing. Similarly, any and all waivers of any terms of this Agreement shall
be
in writing. Any and all oral modifications, amendments, additions, and/or
waivers shall be unenforceable.
7
Severability -
If a
court of competent jurisdiction or arbitrator finds that one or more provisions
of this Agreement is or are illegal or unenforceable, the remaining provisions
of this Agreement shall re-main in full force and effect as if such provision
or
provisions never existed.
8
Waiver -
No
Party's right to require performance of another Party's obligations under this
Agree-ment shall be affected by any previous delay in enforcing such right,
express waiver of prior similar right to require performance, or course of
dealing.
85
9
Integration Clause -
This
Agreement contains the entire agree-ment of the Parties relating to the subject
matter of this Agreement. The Parties have made no agreements, representations,
or warranties re-lating to the subject matter of these Agreements that are
not
stated herein.
10
Interpretation of this Agreement -
The
Parties acknowledge that they and their attorneys have had an opportunity to
review this Agreement in detail and to comment on and draft any and all
addi-tional terms or modifications to this Agreement. Accordingly, the Parties
agree that this Agreement shall not be interpreted against any Party under
California Civil Code § 1654 because the attorney for that Party drafted this
Agreement or any provision of this Agreement.
11
Successors - Should
any change in IMSI ownership or structure occur, this Agreement shall survive
and inure to the benefit of and be binding on the legal representatives,
successors and assigns of the parties.
12
Special Indemnity - IMSI
hereby agrees to hold harmless and indemnify Executive to the full extent
authorized or permitted by law, as such may be amended from time to time, and
by
the Articles of Incorporation and Bylaws of IMSI, as such may be amended. IMSI
shall purchase and maintain a policy or policies of directors' and officers'
liability insurance ("D & O Insurance") to cover liabilities which may be
incurred by its officers or directors in the performance of their obligations
to
IMSI, and IMSI shall include Executive within such policy.
13
Notices.
Notices
under this Agreement shall be sufficient only if sent (a) by overnight courier,
or (b) by facsimile or other electronic means and by U. S. Mail, or (c)
personally delivered to the other Party. Notices shall be addressed as
follows:
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To
IMSI:
International
Microcomputer Software, Inc.
00
Xxxxxxx Xxx
Xxxxxx,
XX 00000
Attn:
Xxxxxx Xxxx, CEO
Fax:
000-000-0000
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To
Executive:
Xxxxxx
Xxxxxxx
00
Xxxxxxxx Xxxxx
Xxxxxx,
XX 00000
Fax:
000-000-0000
With
a copy to:
Xxxxx
Xxxxxxxxx
Xxxxx
and Xxxxxxxxxx
000
Xxxxxxxx Xxxxxxxxx, 00xx
Xxxxx
Xxx
Xxxxxxx XX 00000
Fax:
310/000 0000
Tel:
310/000 0000
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Any
Party
may change the above information by giving written notice as set forth
above.
14
Counterparts.
This
Agreement may executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and
the
only Agreement.
IN
WITNESS WHEREOF, the Parties have executed this Agreement this 1st
day of
May , 2005, but as of September 1, 2001.
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International
Microcomputer Software, Inc.
/s/
XXXXXX XXXX III
Xxxxxx
Xxxx III
Chief
Executive Officer
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Executive
/s/
XXXXXX XXXXXXX
Xxxxxx
X. Xxxxxxx
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