Exhibit 10.2
First Amendment to Employment Agreement
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment (the "Amendment"), effective as of September 6, 2002
(the "Effective Date"), to the Employment Agreement (the "Employment Agreement")
executed on January 30, 2002 by and between DSET Corporation, a New Jersey
corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇, an individual (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive entered into the Employment
Agreement; and
WHEREAS, the Company's Board of Directors appointed Executive to the
position of Chief Executive Officer effective May 24, 2002; and
WHEREAS, the Company and the Executive desire to amend the Employment
Agreement to reflect changes to which the parties hereby agree.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions
Capitalized terms used but not otherwise defined in this Amendment shall
have the meanings ascribed thereto in the Employment Agreement.
2. Chief Executive Officer
The parties understand and agree that effective May 24, 2002, the Executive
shall assume all duties and responsibilities of Chief Executive Officer of the
Company. In connection therewith, the Employment Agreement, as amended hereby,
shall continue to govern Executive's employment with the Company and it shall be
further understood that: (i) each reference to the Executive's position as
President shall include reference to the position of Chief Executive Officer;
(ii) each reference to the discretion of or decision of the Chief Executive
Officer set forth in the Employment Agreement with respect to the Executive's
employment shall hereinafter reference the discretion or decision of the
Company's Board of Directors; and (iii) any ambiguity under or need for
clarification of the Employment Agreement, as amended, shall be resolved by the
Board of Directors in its sole discretion.
3. Amendments
Section 7 of the Employment Agreement shall be amended and restated in its
entirety to read as follows:
"7. Compensation Upon a Change in Control or in the Event of Termination.
Upon the closing of a transaction resulting in a Change in Control of
the Company, or in the event that the Employee's employment pursuant
to this Agreement terminates
prior to the end of the term of this Agreement, the Company shall pay
the Employee compensation as set forth below:
(a)(i) Severance Payment Upon Change in Control. Following a Change in
Control, and only if the Employee is not entitled to receive
compensation pursuant to Section 7(b)(i) hereof, the Company
shall promptly pay to the Employee an amount equal to eighty
percent (80%) of twelve times the average of the Employee's total
monthly compensation (salary, bonus and commissions, as
applicable) for the twelve months immediately prior to the
termination in a single, lump sum payment within ten (10) days
after the closing of the transaction resulting in the Change of
Control.
(a)(ii) Options and Warrants Upon Termination Surrounding a Change in
Control. In the event that the Employee is terminated during the
two-year period following a Change in Control:
1. Other than for Cause; or
2. By the Employee as a result of, or within 30 days of the
following:
(A) a reduction in his rate of regular compensation from
the Company to an amount below the rate of his regular
compensation as in effect immediately prior to the
Change in Control;
(B) a requirement that the Employee relocate to a location
more than fifty (50) miles from the Employee's current
office location with the Company immediately prior to
the Change in Control; or
(C) a change in duties or job responsibilities from those
as in effect immediately prior to the Change in
Control, which change results in the material
diminution of the Employee's status, authority and
duties, except for such subordination in duties or job
responsibilities as may normally be required due to the
Company's change from an independent business entity to
being a subsidiary or division of another corporate
entity;
then (y) all options and/or warrants then held by the
Employee to purchase equity of the Company (or any successor
or assign of the Company) shall become fully vested and
fully exercisable and (z) any stock held by the Employee
that is subject to a right of repurchase in favor of the
Company shall become fully vested and the right of
repurchase shall lapse in its entirety. In such event, the
Employee may exercise such options and/or warrants for a
period of ninety (90) days from the date of such
termination.
(b)(i) Severance. If the Employee's employment with the Company is
terminated other than in connection with a Change in Control, and
only if the Employee is not entitled to receive compensation
pursuant to Section 7(a)(i) hereof, either:
1. By the Company for no reason or for any reason other than
Cause;
2. By the death or disability of the Employee;
3. By the Employee for Good Reason; or
4. By the Employee, in the event that Employee is not elected
to the position of President and Chief Executive Officer of
the Company, or a comparable or higher office (other than
for Cause),
then the Company shall pay the Employee (or his estate or
personal representative) an amount equal to eighty percent (80%)
of twelve times the average of the Employee's total monthly
compensation (salary, bonus and commissions, as applicable) for
the twelve months immediately prior to the termination (the
"Severance Payment"). Such Severance Payment shall be paid in
equal monthly installments on the first business day of each
month over the twelve-month period following termination,
provided, however, that in the event the Employee's employment is
so terminated on or before the first anniversary of this
Agreement, the Severance Payment shall equal two hundred fifty
nine thousand two hundred dollars ($259,200).
(b)(ii) Additional Severance. If the Employee's employment with the
Company is terminated (whether or not in connection with a Change
in Control) either:
1. By the Company for no reason or for any reason other than
Cause;
2. By the death or disability of the Employee;
3. By the Employee for Good Reason; or
4. By the Employee, in the event that Employee is not elected
to the position of President and Chief Executive Officer of
the Company, or a comparable or higher office (other than
for Cause),
then, if the Employee (or his estate or personal representative)
elects to receive any medical or dental benefits pursuant to
COBRA during the twelve months following such termination, the
Company shall reimburse the costs of such benefits to the
Employee (or pay the COBRA premium directly, at the Company's
sole option). Employee (or his estate or personal representative)
shall also be entitled to receive from the Company, for the
twelve months following such termination, the life benefits
previously received by the Employee, at the cost of the Company.
In the event that the Employee's continued participation in any
such
plans for such period is not possible under the general terms and
provisions thereof, the Company shall pay to the Employee
benefits which are substantially similar in content and value to
those which the Employee was entitled under such plans or
programs for such period. The Company may withhold from any such
severance compensation any federal, state, city, county or other
taxes.
Notwithstanding the foregoing, nothing shall prevent the Company from
terminating the Employee for Cause or not electing the Employee for Cause,
and in either such case the Company shall not be required to provide the
compensation outlined in this Section 7.
(c) Termination of 401K Matching. In the event of any termination of
the employment of the Employee with the Company for any reason,
whether by the Company or by the Employee, the obligation of the
Company to match 401K contributions, if any, shall terminate.
(d) Full Settlement. The Employee understands and agrees that any
payment or acceleration of options or acceleration of warrants
pursuant to Section 7 of this Agreement, if any, shall constitute
the full settlement of any claim under law or equity that the
Employee might otherwise assert against the Company, or any of
its employees, officers or directors on account of the Employee's
termination. The provision of payments or benefits under this
Section is expressly conditioned upon the Employee's executing a
valid general release of claims against the Company, its
officers, directors, employees and agents as a condition to
receiving any payments hereunder or acceleration of options or
warrants. This Agreement shall supersede any obligation the
Company may have with respect to the Employee pursuant to any
employment contract or other agreement relating to the prescribed
benefits. This Agreement contains the entire agreement of the
parties concerning the subject matter hereof and supersedes any
prior agreement between the Company and the Employee concerning
the subject matter hereof."
4. Reference to and Effect on the Employment Agreement
(a) On and after the Effective Date, each reference to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import shall mean and be a
reference to the Employment Agreement as amended hereby. No reference to this
Amendment need be made in any instrument or document at any time referring to
the Employment Agreement. A reference to the Employment Agreement in any such
instrument or document shall be deemed to be a reference to the Employment
Agreement as amended hereby.
(b) Except as expressly amended by this Amendment, the provisions of the
Employment Agreement shall remain in full force and effect.
5. Governing Law
The Employment Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey without giving effect to principles of
conflicts of laws.
6. Counterparts
This Amendment may be executed in two counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first written above.
COMPANY:
DSET CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXECUTIVE
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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