AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.4
AMENDMENT TO
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Amendment to the Employment Agreement (“Agreement”) between Xxxxxx Interactive Inc., a
Delaware corporation (“Company”), and Xxxxx X. Xxxxxxxx, Xx. (“Executive”), dated as of January 1,
2005, is effective as of April 28, 2006.
WHEREAS, the Company and the Executive entered into the Agreement and reserved the right to
modify the Agreement in accordance with Section 6.6 of the Agreement; and
WHEREAS, the interpretive guidance promulgated by the Treasury Department pursuant to Section
409A of the Internal Revenue Code proposes to classify certain severance arrangements as being
non-qualified deferred compensation plans subject to the provisions of Section 409A; and
WHEREAS, the Executive’s employment with the Company will be terminated by the Company without
Cause (as defined in the Agreement) effective on April 30, 2006; and
WHEREAS, certain amounts payable pursuant to Section 4.6 of the Agreement will be deferred to
satisfy the requirements of Section 409A(a)(2)(B)(i) for purposes of operating the Agreement in
good faith compliance with Section 409A (even though the parties have not determined that such
payments constitute a “nonqualified deferred compensation plan” pursuant to Section 409A); and
WHEREAS, the parties wish to amend the Agreement to memorialize such deferral and their
agreement regarding their good faith compliance with Section 409A(a);
NOW, THEREFORE, for good and valuable consideration, the receipt of which is acknowledged, it
is agreed as follows:
1. Amounts payable by the Company to the Executive pursuant to Section 4.6(a)(iii) and (iv) of
the Agreement during the period beginning May 1, 2006 and ending on October 31, 2006 (“Deferral
Period”) shall be deferred and shall be paid to the Executive in a lump sum payment on November 1,
2006. For purposes of clarification, the Executive is entitled to a pro rata bonus as set forth in
Section 4.6(a)(iii) of the Agreement for the fiscal year ending June 30, 2006. In the event that
such 2006 bonus would normally be paid to the Executive before November 1, 2006, such bonus payment
shall be deferred and paid to the Executive on November 1, 2006. Notwithstanding the foregoing, in
the event that additional guidance is issued pursuant to Section 409A that provides that all or a
portion of the amounts payable to the Executive pursuant to Section 4.6(a)(iii) and/or (iv) of the
Agreement can be paid prior to November 1, 2006 without causing such payments or any other payments
to be come subject to Section 409A(1), such amounts shall be paid to the Executive as soon as
practicable following the issuance of such additional guidance (but not sooner than as originally
required by Section 4.6(a)(iii) and (iv), and subject to the timing requirements set forth in such
additional guidance).
2. Amounts payable by the Company to the Executive pursuant to Section 4.6(a)(iii) and (iv) of
the Agreement on or after November 1, 2006 shall be paid as set forth in the Agreement (i.e., the
base compensation payments due on or after November 1, 2006 shall be paid as set forth in the
Agreement and the pro-rata performance bonus for the fiscal year ending June 30, 2006, to the
extent not payable pursuant to Section 1 above, shall be paid when such fiscal year performance
bonuses are paid to the other Company senior executives).
3. Pursuant to Section 4.6(a)(v) of the Agreement, the Executive and his spouse and dependents
are eligible to continue to participate in the benefit plans set forth in Section 3.3 of the
Agreement. For the purposes of avoidance of doubt as to the interpretation of 4.6(a)(v), the
benefits to which the Executive is entitled are the following and only the following listed
benefits. Executive (including as applicable his spouse and dependents) shall continue to receive
coverage under the Company’s health and dental insurance plans, and the Company’s accidental death
and dismemberment and travel accident plans and programs, with same coverages as are provided to
other executive officers. Executive also shall continue to be covered by the Company’s long term
disability plans, and because salary replacement coverage under such plans will not be available at
the same level as is available to currently employed executive officers, Executive shall receive a
$10,000 compensatory lump sum payment payable on November 1, 2006, or if earlier the first date on
which payments are made pursuant to section 1 hereof. Executive shall remit to the Company amounts
equal to the contribution toward premium payments under the foregoing benefit programs for which
executives of the Company are generally responsible, such remittances being due at the same time as
similar amounts are paid by or withheld from
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compensation of other Company executives and being due without regard to the pre- or post-tax
effect of any such contribution payment. Following the Deferral Period, the Company may deduct the
applicable contribution payments from the base compensation payments that are payable to the
Executive pursuant to Section 4.6(a)(iv) of the Agreement. In the event that during the Deferral
Period, the Executive and his spouse and dependents are no longer eligible to participate in the
foregoing listed benefit plans and the Company determines that it will provide the “economic
equivalent” as a cash payment or other payment or benefit that is not exempt from the requirements
of Section 409A(a)(2)(B)(i), the Company shall not make such payments to the Executive during the
Deferral Period and shall remit such payments to the Executive on November 1, 2006.
4. No amounts are payable to the Executive pursuant to Section 4.6(a)(ii) of the Agreement
with respect to the Company’s fiscal year that ended in 2005.
5. The parties acknowledge and agree that this Amendment has been made in accordance with
Section 6.6 of the Agreement.
6. In the event the Executive’s employment is not terminated effective as of April 30, 2006,
this Amendment shall be void, ab initio.
7. Except as expressly modified herein, the parties acknowledge and agree that the terms and
conditions of the Agreement remain in full force and effect. This Agreement may be signed by
electronic facsimile or by fax and any such signature shall be binding upon the parties in the same
manner as an original.
IN WITNESS WHEREOF, this Amendment has been executed and delivered as of the date first above
written.
| XXXXXX INTERACTIVE INC. | ||||
By:
|
/s/ Xxxxxxx X. Xxxxx | |||
Name:
|
Xxxxxxx X. Xxxxx | |||
Title:
|
President and CEO | |||
| /s/ Xxxxx X. Xxxxxxxx, Xx. | ||||
| XXXXX X. XXXXXXXX, XX. | ||||
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