Amendment No. 1 to Offer Letter
EXHIBIT 10.35
Amendment No. 1 to Offer Letter
This Amendment No. 1 dated July 22, 2010 to Offer Letter dated March 30, 2010 (the “Offer Letter”)
is made by and between Xxxxxxxx.xxx Inc. and Xxxx Xxxxx.
The Offer Letter is amended to delete all the text of the letter following the phrase “you will be
eligible for a severance package as follows:” to, but not including, the paragraph that begins
“This letter sets forth the key terms of your proposed employment by the Company,” and substituting
the following in its entirety:
The Company will pay you a severance amount equal to six (6) months of Salary paid out over regular
Company payroll periods, commencing on the first regular Company payroll period after the Release
Deadline (defined below). In addition, following any such termination of employment you will be
entitled to an additional lump sum severance payment equal to 80% of your Average Annual Bonus,
prorated based on the number of months you were employed during the year of termination, payable on
the first regular Company payroll period after the Release Deadline (and in no event later than 70
calendar days after your “separation from service” within the meaning of Section 409A). For
purposes of this offer letter, “Average Annual Bonus” means the average annual bonus earned by you
under the Company’s Performance Incentive Program (or any successor annual bonus program) for the
year of termination for performance over the two (2) years preceding the year of termination or the
previous bonus payment if less than two (2) years.
In each case outlined above, the severance payments are contingent upon your signing a general
release of claims in favor of the Company and such release of claims becoming irrevocable within 45
calendar days following your separation from service (such 45th day, the “Release Deadline”).
Additionally, in the event of such a termination of employment the Company will reimburse you and
any covered dependents for your medical benefit COBRA premiums for a period of six (6) months
following your termination, subject to (1) your providing the Company with adequate proof of
payment of such COBRA premiums as determined by the Company and (2) the taxation of such
reimbursements to the extent advisable under Section 105(h) of the Internal Revenue Code of 1986,
as amended, or other applicable law.
In the event that within three (3) months before or within twelve (12) months following a Change of
Control you are terminated by the Company without Cause (other than as a result of your death or
disability), or you resign for Good Reason, you will be entitled to the aforementioned severance
package and immediate vesting as to a total of fifty percent (50%) of your then unvested equity and
equity-based awards. In addition, the period for which you will be eligible to receive
reimbursement for COBRA medical premiums will be increased to a total of twelve (12) months.
For purposes of this offer letter, “Cause” means gross negligence in carrying out your duties for
the Company or any breach of fiduciary duties to the Company, conviction of, or plea of guilty or
no contest to any felony, any act of fraud or embezzlement, material violation of a Company policy
or any unauthorized use or disclosure of confidential information or trade secrets of the
Company or its affiliates, or failure to cooperate in any Company investigation. Neither bad
judgment nor mere negligence nor an act of omission reasonably believed by you to have been in, or
not opposed to, the interests of the Company, shall constitute examples of gross negligence.
For purposes of this offer letter, “Change of Control” results when: (i) any person or entity other
than a stockholder of the Company (or any parent corporation) as of the date of this offer letter
becomes the beneficial owner, directly or indirectly, of securities of the Company (or any parent
corporation) representing fifty percent (50%) or more of the total voting power of all of the
Company’s (or any parent corporation’s) then outstanding voting securities, (ii) a merger or
consolidation of the Company (or any parent corporation) in which the Company’s (or any parent
corporation’s) voting securities immediately prior to the merger or consolidation do not represent,
or are not converted into securities that represent, a majority of the voting power of all voting
securities of the surviving entity immediately after the merger or consolidation, or (iii) a sale
of all or substantially all of the assets of the Company (or any parent corporation) or a
liquidation or dissolution of the Company (or any parent corporation).
For purposes of this offer letter, you can resign for “Good Reason” within twelve (12) months
following a change of control and within ninety (90) days after the occurrence of any of the
following without your consent: a material reduction of your compensation, duties, authority or
responsibilities, relative to your compensation, duties, authority or responsibilities or the
assignment to you of such reduced duties, authority or responsibilities.
For purposes of this offer letter, you can resign for “Good Reason” within ninety (90) days after
the occurrence of any of the following without your express written consent in circumstances not
involving a change of control: (i) a material reduction of your base compensation, or (ii) a
relocation of your principal place of employment to a facility or location more than one hundred
(100) miles from the current location of the Company’s San Francisco, California offices as in
effect on the date upon which this offer letter is executed. Notwithstanding anything herein to
the contrary, no event described above in this paragraph and the preceding paragraph shall
constitute Good Reason unless (x) you provide the Company notice of such event within thirty (30)
days after the first occurrence or existence thereof, which notice specifically identifies the
event that you believe constitutes Good Reason and (y) the Company fails to cure such event within
thirty (30) days after delivery of such notice.
Any other changes to our at-will employment relationship will be effective only if contained in a
written agreement for that purpose, signed by you and the Company’s CEO.
The payments hereunder are intended to be exempt under Treasury Regulation Section 1.409A-1(b)
(9)(iii). Notwithstanding the foregoing, to the extent (i) any payments to which you become
entitled under this agreement, or any agreement or plan referenced herein, in connection with your
termination of employment constitute deferred compensation subject to (and not exempt from) Section
409A and (ii) you are deemed at the time of such termination of employment to be a “specified”
employee under Section 409A, then such payment or payments shall not be made or commence until the
earlier of (i) the expiration of the six (6)-month period measured from the date of your
“separation from service”; or (ii) the date of your death following such separation from service;
provided, however, that such deferral shall only be effected to the extent required to avoid
adverse tax treatment to you, including (without limitation) the additional twenty percent (20%)
tax for which you would otherwise be liable under Section 409A(a)(1)(B) in the absence of such
deferral. Upon the expiration of the applicable deferral period, any payments which would have
otherwise been made
during
that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid
to you or your beneficiary in one lump sum. For purposes of this agreement or any agreement or plan
referenced herein, with respect to any payment that is subject to (and not exempt from) Section
409A of the Code, termination of your employment shall be a “separation from service” within the
meaning of Section 409A, and Section 1.409A-1(h) of the regulations thereunder.
| XXXXXXXX.XXX INC. | ||||||
| By | /s/ Xxxxxxx Xxxxxxxx | |||||
| Name: | Xxxxxxx Xxxxxxxx | |||||
| Title: | Chief Executive Officer | |||||
Accepted and agreed as of the date first above written.
/s/ Xxxx Xxxxx
|
