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EXHIBIT 10.10
[DIGITAL LAVA INC. letterhead]
July 11, 2001
Xxxxx Xxxxxx
c/o Digital Lava Inc.
00000 Xxxxxxxx Xxx, Xxxxx 000
Xxxxxx Xxx Xxx, Xxxxxxxxxx 00000
Re: Change of Control Arrangements
Dear Xxxxx:
This letter agreement amends and supplements the letter agreement dated
as of January 2, 2001 between you and Digital Lava Inc., a Delaware corporation
(the "Company").
In recognition that the future growth, profitability and success of the
Company's business will be substantially and materially enhanced by your
continued employment by the Company, and to further incentivize you to remain an
employee of the Company, we mutually agree as follows:
Upon the occurrence of a "Change of Control (as defined below), you
shall receive a bonus in an amount equal to fifty percent (50%) of your
then-applicable annual base salary (less any applicable withholding or similar
taxes), provided that you are employed by the Company as of the date of such
Change of Control. A "Change of Control" means:
(i) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended) (each, a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
more than 50% of either (i) the then outstanding shares of common stock
of the Company that are not owned by the Company or any entity
controlled by the Company ("Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
("Outstanding Company Voting Securities"); provided that this clause (i)
shall not include any acquisition by the Company, any entity controlled
by the Company, or any employee benefit plan or related trust sponsored
or maintained by the Company or its affiliates;
(ii) consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company or the acquisition of assets of another
entity (a "Business Combination"), in each case, unless, following such
Business Combination, all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of either the then
outstanding shares of common stock or the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or
all or substantially all of the Company's assets either directly or
through one or more subsidiaries).
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Such bonus shall be payable, at the option of the Company, in cash or
shares of Common Stock of the Company, valued at the price established as a
result of such transaction, immediately upon consummation of such Change of
Control.
You understand that any shares of Common Stock which you may acquire
pursuant to the terms hereof will not be registered under the Securities Act of
1933, as amended, or under state securities laws and that the resale by you of
such shares will, therefore, be restricted. You will be unable to sell or
dispose of such shares without either registration under such Act and compliance
with applicable state securities laws or the availability of an exemption
therefrom. You represent and warrant to the Company that all shares of Common
Stock which you may acquire pursuant hereto will be acquired by you for your own
account for investment and that you will not sell or otherwise dispose of any
such shares except in compliance with all applicable federal and state
securities laws. You agree that the Company may place a legend upon each
certificate representing shares acquired by you pursuant to the terms hereof,
which legend will refer to the restrictions on transferability contained, or
referred to, herein.
You hereby agree to keep the terms of this Agreement confidential to the
same extent that the Company maintains such confidentiality (except with regard
to any disclosure by you or the Company required under applicable securities
laws).
This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties, including, but not limited to,
your heirs and the personal representatives of your estate; provided, however,
that neither party shall assign or delegate any of the obligations created under
this Agreement without the prior written consent of the other party.
Notwithstanding the foregoing, the Company shall have the unrestricted right to
assign this Agreement and to delegate its obligations hereunder to any of its
subsidiaries or affiliates or any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company. Nothing in this Agreement shall confer
upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.
Any waiver, alteration, amendment or modification of any of the terms of
this Agreement shall be valid only if made in writing and signed by the parties
hereto; provided, however, that any such waiver, alteration, amendment or
modification is consented to on the Company's behalf by the Board of Directors
or a duly empowered committee thereof.
This Agreement, together with the Employment Agreement, constitutes the
entire understanding and agreement of the parties regarding the subject matter
hereof. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
This Agreement shall be construed, interpreted and the rights of the
parties determined in accordance with the laws of the State of California
(without regard to the conflicts of laws principles thereof).
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which together shall be considered
one and the same agreement.
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If the foregoing reflects our understanding, please sign and date a copy
of this Agreement where indicated below.
DIGITAL LAVA INC.
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: Director
Acknowledged and Xxxxxx as of July 11, 2001:
/s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
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