EXHIBIT 10.14
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
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The OTG Software, Inc. Employment Agreement dated December 20, 2001 between
OTG Software, Inc. and Xxxxxx X. Xxxxxx (the "Agreement") is hereby amended,
effective as of the date of close of the acquisition of OTG by Legato ("the
Acquisition") as follow:
1. Waiver of Option Vesting Rights
(A) Executive hereby acknowledges that Executive currently holds the
options to purchase shares of OTG's capital stock identified below. Those
options, together with any other options Executive may have to purchase shares
of OTG's capital stock, will be subject to the waiver provisions of this Section
1 and will hereafter be collectively referred to as the "Options."
Grant Date Exercise Price Number of Option Shares
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10/20/98 1.835 129,251
10/20/98 1.835 59,142
10/20/98 1.835 21,019
9/15/99 2.75 88,182
9/15/99 2.75 11,818
5/31/01 6.25 77,375
5/31/01 6.25 47,625
(B) Pursuant to the existing terms of the documents evidencing the
Options, and Sections 5 and 9.1 of the Agreement (collectively, the "Executive
Agreements"), those Options would vest, in whole or in part, on an accelerated
basis either at the time of the close of the Acquisition or upon the subsequent
termination of Executive's employment with Legato or OTG (the "Vesting
Acceleration Benefit"). In order to facilitate the closing of the Acquisition,
and in consideration for the benefits Executive will receive as a result of the
Acquisition and the cash payment described in paragraph 2 of the Amendment,
Executive, by signing this Amendment below, hereby knowingly and freely waives
any and all right or entitlement to the Vesting Acceleration Benefit; provided
however, that after the closing of the Acquisition, the Parties hereby agree and
acknowledge that Executive shall be entitled to the Vesting Acceleration
Benefits only upon (i) Executive's termination by Legato, unless such
termination is a result of Executive's termination for Cause (as defined in
Section 1.3 of the Agreement) or (ii) Executive's completion of continuous
uninterrupted service from the close date of the Acquisition through December
31, 2002, or such date prior to December 31, 2002 mutually agreed to between
Executive and Legato.
(C) Following the execution of this Amendment, Executive's Options
will continue to vest in accordance with the normal installment vesting
schedule, based on continued service, in effect under the applicable agreement
for each of Executive's Options, and no accelerated vesting of those Options
will occur at the time of the Acquisition or otherwise, except pursuant to
Section 1.B above. Legato further acknowledges that Executive's options will
continue to vest in accordance with the normal installment vesting schedule
during the period between the date of this agreement and the date of close of
this acquisition unless such vesting is modified during this period by an
agreement between the Executive and OTG.
2. Cash Payment. If (i) Executive completes continuous uninterrupted
service from the close date of the Acquisition through December 31, 2002 or (ii)
Executive is terminated without Cause (as defined in Section 1.3 of the
Agreement) prior to December 31, 2002, Executive will be entitled to a lump sum
cash payment of $60,000, subject to applicable withholding, payable by Company
check as soon as practicable following December 31, 2002 or Executive's
termination date, as applicable. This payment is in addition to any other
compensation due to Executive under Executive's current employment agreement
with OTG
Except as amended hereby, the Agreement will continue in full force and
effect, unmodified in any way.
IN WITNESS WHEREOF, the parties have caused the Amendment to be executed
effective as of the date first set forth above.
LEGATO SYSTEMS, INC.
By: /s/ XXXX XXXXXXX
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OTG SOFTWARE, INC.
By: /s/ XXXXXX X. XXXXXX
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XXXXXX X. XXXXXX
/s/ XXXXXX X. XXXXXX
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