AMENDMENT NO. 2
TO
EMPLOYMENT AGREEMENT
AMENDMENT NO. 2, dated as of December 31, 2002 ("Amendment No. 2") to
the Employment Agreement, dated as of November 1, 1999, as amended to date (the
"Agreement"), by and between eAcceleration Corp., a Delaware Corporation (the
"Company") and Xxxxx Xxxxxxx ("Employee").
WHEREAS, the Company and the Employee desire to amend the terms of the
Agreement, pursuant to the terms and conditions set forth herein, as of the date
hereof.
NOW, THEREFORE in consideration of the premises and of the mutual
covenants contained herein, and intending to be legally bound, the parties
hereto agree as follows:
1. Paragraph 2 of the Agreement is hereby deleted in its entirety and
replaced with the following:
" Term. Subject to earlier termination on the terms and
conditions hereinafter provided, and further subject to
certain provisions hereof which survive the term hereof, the
term of this Agreement (the "Term") shall be comprised of a
five (5) year period of employment commencing on January 1,
2003, and shall be extended thereafter for additional one-year
periods unless or until the Company or the Employee provides
sixty (60) days' notice to the other party of the termination
of this Agreement."
2. Subparagraph (b) of Paragraph 4 of the Agreement is hereby deleted
in its entirety and replaced with the following:
"(b) In addition to the salary provided in clause (a) above,
not later than one hundred ten (110) days after the end of the 2002
fiscal year of the Company, the Company shall pay to Employee, as
incentive compensation, an amount equal to two and one-half percent
(2.5%) of the Company's Cash Flow (as defined below) for such
fiscal year. For all quarterly periods during the Term, beginning
with the first quarter of the Company's 2003 fiscal year, the
Company, not later than sixty (60) days after the end of each such
quarterly period, shall pay to Employee an amount equal to two
and one-half percent (2.5%) of the Company's Cash Flow for
such quarterly period; provided, however, that for the fourth
quarter of each fiscal year, such amounts are required to be
paid not later than one hundred ten (110) days after the end
of such quarterly period. For purposes of this Agreement,
"Cash Flow" shall mean, during any fiscal period, an amount
equal to (i) the net income of the Company before taxes,
depreciation, amortization, and extraordinary items, in each
case computed in accordance with United States generally
accepted accounting principles, consistently applied, plus
(ii) the Company's deferred revenue minus (iii) the Company's
deferred expenses. The Company agrees to furnish to Employee a
copy of the Company's annual
audited financial statements not later than one hundred and
five (105) days after the end of each fiscal year of the
Company, and quarterly unaudited financial statements not
later than fifty-five (55) days after the end of each fiscal
quarter during the term of this Agreement."
3. The first sentence of Paragraph 10 of the Agreement is hereby
deleted in its entirety and replaced with the following:
"10. Notices. Any notice to be given to the Company hereunder
shall be deemed sufficient if addressed to the Company in writing
and delivered or mailed by certified or registered mail to it at
0000 XX Xxxxxxxx Xxxxxx 000X, Xxxxxxx Xxxxxxxxxx 00000, Attention:
President, or to such other address as the Company may hereafter
designate, and a copy to Xxxx X. Xxxxxxx, Esq., Xxxxxxx &
Associates, LLC, 00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxx Xxxx 00000."
4. Affirmation of Agreement. Except as expressly amended hereby, the
terms and provisions of the Agreement shall remain in full force
and effect.
5. Counterparts. Amendment No. 2 may be executed in counterparts,
which taken together shall constitute one and the same instrument,
and either of the parties hereto may execute Amendment No. 2 by
signing either such counterpart.
IN WITNESS WHEREOF, the undersigned have executed and delivered
Amendment No. 2 as of the date first above written.
eACCELERATION CORP.
By: /s/ E. Xxxxxx Xxxxxx
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E. Xxxxxx Xxxxxx
Chief Financial Officer
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
