EXHIBIT 10.4
AMENDMENT TO EMPLOYMENT AGREEMENT
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This Amendment to Employment Agreement (the "Amendment"), dated as of
the 31st day of December, 2008, is made by and between Ivivi Technologies, Inc.
(the "Employer") and Xxxx Xxxxxxxxx (the "Employee").
WITNESSETH THAT:
WHEREAS, the Employer and the Employee are parties to an Employment
Agreement, dated as of July 13, 2006 (the "Agreement");
WHEREAS, the Employer and the Employee desire to amend the Agreement to
comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended.
NOW THEREFORE, for and in consideration of the foregoing, the Employer
and the Employee hereby agree as follows:
1. Section 4.01(E) of the Agreement is hereby amended and restated to read, in
its entirety, as follows:
TERMINATION BY EMPLOYEE. Employee may terminate this Agreement and
Employee's employment hereunder with or without Good Reason (as defined
below) by giving thirty (30) days prior written notice of termination
to Employer; provided, however, that Employer reserves the right to
accept Employee's notice of termination and instruct him not to report
to work, but for all other purposes Employee shall be deemed to remain
an employee until the 30-day notice period provided in such 30-day
notice expires. For purposes of this Agreement, "GOOD REASON" shall
mean:
(i) the material failure of Employer or its successor to pay
any material amounts due to Employee hereunder, or any other material
breach of this Agreement by Employer; or
(ii) an action by Employer or its successor that results in a
material diminution in Employee's authority, duties or responsibilities
hereunder; or
(iii) a material change to the geographic location at which
Employee must perform his duties hereunder.
Notwithstanding the foregoing, placing Employee on a paid leave for up
to 90 days, pending a determination of whether there is a basis to
terminate Employee for "Cause," shall not constitute "Good Reason"
hereunder. Employee shall be deemed to have consented to any act or
event that would otherwise give rise to "Good Reason," unless Employee
provides written notice of termination for Good Reason to Employer
within ninety (90) days following the action or event first
constituting Good Reason. Notwithstanding the foregoing (i) Employer
shall have 30 days from the receipt of such notice to cure any of the
actions or events described in such notice, and Good Reason shall not
exist if Employer cures such actions or events during such 30 day
period and (ii) Good Reason shall not exist unless Employee terminates
from employment within 2 years immediately following the action or
event first giving rise to Good Reason.
2. The second paragraph of Section 4.02(D)(ii) is hereby deleted and of no
further force or effect.
3. A new Section 4.02(D)(iii) is hereby added to the Agreement to read, in its
entirety, as follows:
"Notwithstanding any other provision of this Agreement to the contrary,
for purposes of this Agreement, "Release" means a general release
agreement in a form determined by Employer, and substantially
equivalent to the form previously used by Employer with respect to the
termination of other recently terminated executives, and which release
agreement shall be presented to Employee within 5 days following
Employee's termination of employment and executed by Employee within 21
days following his receipt of such release agreement (or such longer
period if and to the extent required under applicable law), and which
release agreement shall include, among other things, a general release
of claims in favor of Employer, and their respective related parties
(but shall not require Employee to release any of Employee's then
existing rights to indemnification from Employer or rights to receive
payments under this Article IV). Notwithstanding any other provision of
this Agreement to the contrary, if Employee becomes entitled to the
Base Salary continuation payments as provided in Section 4.02(D)(i) or
Section 4.02(D)(ii), the commencement of such payments shall occur on
the next regular payroll date of Employer that occurs immediately
following the effective date of the Release referred to above;
PROVIDED, that (i) if the Employee's termination of employment occurred
on or before November 15 of any calendar year, then such payments shall
commence no later than the earlier of such next payroll date, and
December 31 of the same calendar year and (ii) if the Employee's
termination of employment occurred after November 15 of any calendar
year, then such payments shall commence no earlier than the later of
such next payroll date and January 1 of the following calendar year."
4. The last sentence of Section 6.04 is amended to read in its entirety, as
follows:
"Employer shall maintain Directors & Officers liability insurance
coverage in the amount that is in effect as of the Commencement Date."
5. Section 6.05 of the Agreement is hereby amended and restated to read, in its
entirety, as follows:
"6.05 Sections 280G/4999 Golden Parachute Tax.
(A) If during or after the Employee's employment with
Employer, Employee becomes subject to the excise tax imposed by
Internal Revenue Code ("IRC") Section 4999 (the "Parachute Excise
Tax"), the parties agree that if the aggregate of all "parachute
payments" (as such term is used under IRC Section 280G) exceeds 300% of
the "base amount" (as such term is used under IRC Section 280G), then,
subject to Section 6.05(B), the parachute payment shall be reduced to
299.99% of such base amount.
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(B) Prior to reducing the parachute payment as provided in
clause (A) above, Employee and Employer, and their tax respective
consultants, shall confer with respect to the calculations and compare
the taxable income to be received by Employee if all Federal, State and
local taxes payable if such reduction were to occur, and not occur. If
Employee's income, net of such taxes, would be more by at least $10,000
in the absence of such reduction, then the reduction provided in
6.02(A) shall not occur. In the event of a dispute between the
calculation of Employee and the Company, the Employee's calculation
shall control for the purpose of this Section 6.05(B).
(C) If the reduction provided in Section 6.05(A) is to occur,
then Employer shall (i) reduce payments that are in the form of equity
before reducing any payments in the form of cash, and (ii) subject to
the provisions of clause (i), payments to be paid later, will be
reduced first. Further, should the provisions of Section 280G be deemed
by Employer's and Employee's tax consultants to permit Employee at the
time of such reduction to determine which components of consideration
be reduced first, then the Employer shall allow Employee to do so."
6.. Section 6.12 is hereby amended and restated to read, in its entirety, as
follows:
6.12 Section 409A.
(A) Full Compliance. It is the intent of the parties that all
compensation and benefits payable or provided to the Executive (whether
under this Agreement or otherwise) shall fully comply with the
requirements of IRC Section 409A such that no amounts payable hereunder
shall be subject to "additional tax" within the meaning of IRC Section
409A. Employer agrees that it will not, without Employee's prior
written consent, take any action, or refrain from taking any action,
that would result in the imposition of "additional tax", interest
and/or penalties upon Employee under IRC Section 409A.
(B) Separate Payments. Notwithstanding anything contained in
this Agreement to the contrary, each and every payment made under this
Agreement shall be treated as a separate payment and not as a series of
payments.
(C) Specified Employee. Notwithstanding anything contained in
this Agreement to the contrary (subject however to the provisions of
the last sentence of Section 6.12(A) or of 6.12(B), if Employee is a
"specified employee" (determined in accordance with IRC Section 409A
and Treasury Regulation Section 1.409A-3(i)(2)) as of the termination
of Employee's employment with Employer, and if any payment, benefit or
entitlement provided for in this Agreement or otherwise both (i)
constitutes a "deferral of compensation" within the meaning of IRC
Section 409A ("Nonqualified Deferred Compensation") and (ii) cannot be
paid or provided in a manner otherwise provided herein or otherwise
without subjecting Employee to additional tax, interest and/or
penalties under IRC Section 409A, then any such payment, benefit or
entitlement that is payable during the first 6 months following the
date of termination shall be paid or provided to Employee in a lump sum
cash payment to be made on the earlier of (x) Employee's death or (y)
the first business day of the seventh calendar month immediately
following the month in which the date of termination occurs. Employer
agrees that it will not, without Employee's prior written consent, take
any action, or refrain from taking any action, that would result in the
imposition of "additional tax", interest and/or penalties upon Employee
under IRC Section 409A.
(D) Expense Reimbursements. Notwithstanding anything contained
in this Agreement to the contrary, except to the extent any
reimbursement, payment or entitlement under this Agreement does not
qualify as Nonqualified Deferred Compensation, (i) the amount of
expenses eligible for reimbursement or the provision of any in-kind
benefit (as defined in IRC Section 409A) to Employee during any
calendar year will not affect the amount of expenses eligible for
reimbursement or provided as in-kind benefits to Employee in any other
calendar year, (ii) the reimbursements for expenses for which Employee
is entitled shall be made on or before the last day of the calendar
year following the calendar year in which the applicable expense is
incurred and (iii) the right to payment or reimbursement or in-kind
benefits may not be liquidated or exchanged for any other benefit.
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(E) Reimbursement of Expenses in Connection with a Separation
from Service. Notwithstanding anything contained in this Agreement to
the contrary, any payment or benefit paid or provided under Section
4.02 above or otherwise paid or provided due to a "separation from
service" (as such term is described and used in IRC Section 409A and
the Treasury Regulations promulgated thereunder) that is exempt from
IRC Section 409A pursuant to Treasury Regulation Section
1.409A-1(b)(9)(v) shall be paid or provided to Employee only to the
extent the expenses are not incurred or the benefits are not provided
beyond the last day of the second taxable year of Employee following
the taxable year of Employee in which the separation from service
occurs; PROVIDED, HOWEVER that Employer reimburses such expenses no
later than the last day of the third taxable year following the taxable
year of Employee in which the separation from service occurs.
(G) Dispute Resolution Payments. Any dispute resolution
payment (including related reimbursable expenses, fees and other costs)
that does not qualify as a "legal settlement" in accordance with
Treasury Regulation 1.409A-1(b)(11) (as determined by Employer in its
sole discretion) shall be paid by Employer to Employee not later than
the last day of Employee's taxable year following the year in which the
dispute is resolved.
7. This Amendment may be executed in counterparts, each of which shall
constitute an original, but both of which together shall constitute one and same
instrument. This Amendment shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New Jersey, without giving effect
to its principles of conflicts of laws. Except as specifically amended hereby,
the Agreement, remains otherwise unmodified and in full force an effect, and are
hereby ratified by Employer and Employee.
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IN WITNESS WHEREOF, the parties have signed this Amendment to
Employment Agreement as of the day and year set forth above.
IVIVI TECHNOLOGIES, INC.
By: /s/Xxxxxx Xxxxxxxxxx, CEO
Ivivi Technologies, Inc.
/s/ XXXX XXXXXXXXX, Individually
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