Exhibit 10.2
CITADEL SECURITY SOFTWARE INC.
AMENDMENT TO AGREEMENTS WITH XXXXXXX XXXXXXXX
This agreement is made and entered into as of November 3, 2006, by and
between Citadel Security Software Inc., a Delaware corporation ("Citadel"), and
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Xxxxxxx Xxxxxxxx ("Xxxxxxxx").
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WHEREAS, Citadel, and certain of its subsidiaries, have entered into an
Asset Purchase Agreement, dated as of October 2, 2006, with McAfee, Inc. and
McAfee Security LLC (the "Asset Purchase Agreement");
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WHEREAS, under: (a) that certain Change of Control Agreement, dated as of
December 23, 2005, between Citadel and Xxxxxxxx and (b) that certain Employment
Agreement, dated as of April 1, 2003, between Citadel and Xxxxxxxx as amended by
Amendment No. 1 to Employment Agreement, dated as of March 12, 2004, between
Citadel and Xxxxxxxx (collectively, the "Employment Agreements"), Xxxxxxxx is
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entitled to receive certain payments in connection with the closing of the
transactions contemplated by the Asset Purchase Agreement (the "Closing");
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WHEREAS, each of Citadel and Xxxxxxxx desire to amend each of the
Employment Agreements (and any similar agreements or arrangements) to provide
that, contingent upon the occurrence of the Closing, Xxxxxxxx will receive only
the payments specified in this Amendment To Agreements With Xxxxxxx Xxxxxxxx in
connection with the Closing; and
WHEREAS, each of Citadel and Xxxxxxxx desire that, contingent upon the
occurrence of the Closing, Citadel shall issue to Xxxxxxxx 50,000 shares of its
common stock in exchange for the termination of all outstanding obligations of
Citadel under the stock option agreement to purchase 50,000 shares of Citadel's
common stock dated September 30, 2003 (the "50,000 Share Option Agreement");
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NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Citadel and Xxxxxxxx
hereby agree as follows:
1. Amendment of Employment Arrangements. Notwithstanding any terms
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contained therein to the contrary, each of the Employment Arrangements (as
defined below) are hereby amended to provide that, upon the Closing, provided
Xxxxxxxx does not accept an offer of employment from McAfee, Inc. at, as of, or
in connection with the Closing, Xxxxxxxx shall be entitled to receive from
Citadel, a single payment, in a lump sum, of $191,114 (which amount will not be
grossed-up) to be promptly paid to Xxxxxxxx by Citadel upon the earlier to occur
of: (i) the written request of Xxxxxxxx or (ii) the one month anniversary of
the date on which the Closing occurs. Except as set forth herein, effective on
the Closing, Xxxxxxxx agrees that he will not be entitled to any additional
Severance Payment, Special Severance Payment, Special Bonus Payment, Termination
upon Change of Control Amount, Bonus or similar or other special payment or
benefit under the Employment Arrangements as a result of or in connection with
the Closing; provided however, that Xxxxxxxx shall remain entitled to any
payments or benefits under the Employment Arrangements that are not directly
related to the proposed Closing (e.g., accrued bonuses, vacation pay, expense
reimbursements, etc.). For purposes of this Amendment To Agreements With
Xxxxxxx Xxxxxxxx , "Employment Arrangements" shall mean each of the Employment
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Agreements along with any other agreements or arrangements between Citadel and
Xxxxxxxx regarding employment, bonuses, severance, payments made upon a change
of control of Citadel, tax gross-ups, benefits or similar agreements or
arrangements, but shall not include any option agreements referenced in the
Amendment to Stock Option Agreement entered into by the parties of even date
herewith.
2. Stock Options.
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(a) Xxxxxxxx hereby represents and warrants that, currently, he
is entitled to receive 50,000 shares of Citadel's common stock upon
exercise of his rights under the Stock Option Agreement. Xxxxxxxx
hereby agrees that he shall not exercise any of his rights to acquire
shares of the common stock of Citadel pursuant to the 50,000 Share
Option Agreementunless and until the Asset Purchase Agreement is
terminated. This Amendment To Agreements With Xxxxxxx Xxxxxxxx shall
not affect the other option agreements between Citadel and Xxxxxxxx
referenced in the Amendment to Stock Option Agreement entered into by
the parties of even date herewith.
(b) Provided the Closing occurs and effective as of the Closing:
(i) the 50,000 Share Option Agreement will terminate and be of no
further force or effect, and (ii) effective on the earlier of (x) the
date requested by Xxxxxxxx after the Closing or (y) the date that is
immediately before the record date established for Citadel's first
distribution to common stockholders of the proceeds of the Asset
Purchase Agreement (which is contemplated to occur shortly after the
expiration of the 30-day indemnification period set forth in the Asset
Purchase Agreement), Citadel shall issue to Xxxxxxxx 50,000 shares of
its common stock.
3. Post-Closing Employment. After the Closing, Xxxxxxxx will remain as an
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at-will employee of Citadel to provide services during the wind down phase of
Citadel's operations after the Closing at his current salary (less applicable
withholding), without any bonus or severance payments provided in the Employment
Arrangements; provided that Citadel will pay an additional retention bonus equal
to one half of Xxxxxxxx'x annual base salary if Xxxxxxxx remains employed by
Citadel to assist with the winding down of Citadel's business through the
earlier of March 31, 2007 or the date Citadel determines his services in
connection with the wind down are no longer required.
4. Effect of this Amendment To Agreements With Xxxxxxx Xxxxxxxx.
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(a) Nothing contained in this Amendment To Agreements With
Xxxxxxx Xxxxxxxx shall be deemed to limit Xxxxxxxx'x rights in his
capacity as a current stockholder of Citadel including his right to
receive distributions on his shares of Citadel's common stock
following the Closing.
(b) Except as expressly provided herein, this Amendment To
Agreements With Xxxxxxx Xxxxxxxx shall not be deemed to further modify
or terminate any Employment Arrangement.
(c) If the Asset Purchase Agreement is terminated in accordance
with its terms or otherwise, this Amendment To Agreements With Xxxxxxx
Xxxxxxxx shall terminate in its entirety.
5. Other Provisions.
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(a) This Amendment To Agreements With Xxxxxxx Xxxxxxxx shall
inure to the benefit of and be binding upon (i) Citadel and its
successors and assigns and (ii) Xxxxxxxx and his heirs and legal
representatives.
(b) All notices and statements with respect to this Amendment To
Agreements With Xxxxxxx Xxxxxxxx shall be made or delivered as set
forth in that certain Employment Agreement, dated as of April 1, 2003,
between Citadel and Xxxxxxxx as amended by Amendment No. 1 to
Employment Agreement, dated as of March 12, 2004, between Citadel and
Xxxxxxxx.
(c) This Amendment To Agreements With Xxxxxxx Xxxxxxxx sets forth
the entire present agreement of the parties concerning the subjects
covered herein; there are no promises, understandings,
representations, or warranties of any kind concerning those subjects
except as expressly set forth in this Amendment To Agreements With
Xxxxxxx Xxxxxxxx .
(d) Any modification to this Amendment To Agreements With Xxxxxxx
Xxxxxxxx must be in writing and signed by all parties; any attempt to
modify this Amendment To Agreements With Xxxxxxx Xxxxxxxx , orally or
in writing, not executed by all parties will be void.
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(e) If any provision of this Amendment To Agreements With Xxxxxxx
Xxxxxxxx , or its application to anyone or under any circumstances, is
adjudicated to be invalid or unenforceable in any jurisdiction, such
invalidity and unenforceability will not affect any other provision or
application of this Amendment To Agreements With Xxxxxxx Xxxxxxxx
which can be given effect without the invalid or unenforceable
provision or application and will not invalidate or render
unenforceable such provision or application in any other jurisdiction.
(f) This Amendment To Agreements With Xxxxxxx Xxxxxxxx will be
governed and interpreted under the laws of the United States of
America and of the State of Texas as applied to contracts made and
carried out entirely in Texas by residents of that state.
(g) No failure on the part of any party to enforce any provisions
of this Amendment To Agreements With Xxxxxxx Xxxxxxxx will act as a
waiver of the right to enforce that provision.
(h) Section headings are for convenience only and shall not
define or limit the provisions of this Amendment To Agreements With
Xxxxxxx Xxxxxxxx
(i) This Amendment To Agreements With Xxxxxxx Xxxxxxxx may be
executed in several counterparts, each of which is an original. A copy
of this Amendment To Agreements With Xxxxxxx Xxxxxxxx manually signed
by one party and transmitted to the other party by FAX or in image
form via email shall be deemed to have been executed and delivered by
the signing party as though an original. A photocopy of this Amendment
To Agreements With Xxxxxxx Xxxxxxxx shall be effective as an original
for all purposes.
(j) Capitalized terms used by not defined herein shall have the
meanings assigned to such terms in the Employment Agreements.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment To Agreements With Xxxxxxx Xxxxxxxx as of the date first above
written.
CITADEL SECURITY SOFTWARE INC.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: CEO
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
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