EXHIBIT 10.31.2
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September 2, 2003
Re: Amendment to Employment Agreement
Dear ▇▇▇▇:
The purpose of this letter is to amend your current employment
agreement with Extended Systems of Idaho, Incorporated, an Idaho corporation
("ESI"), a copy of which is attached hereto as EXHIBIT A (the "Agreement").
Please read this letter carefully and acknowledge your approval and consent by
signing the enclosed copy of this letter and returning it to ESI as soon as
possible.
By signing this letter, you agree to continue to abide and be bound by
the terms and conditions of the Agreement that is amended as follows:
1. Section 3 of the Agreement is hereby deleted in its entirety and the
following shall be put in its place and stead.
3. COMPENSATION. Effective as of July 1, 2003, the EMPLOYEE shall
receive as compensation for his/her services the amount of $9360 per
month, based on full-time employment (which amount may be increased
from time to time, "Base Salary"), plus all employee benefits as set
forth in the current issue of the Extended Systems Employee Handbook.
2. Section 12 of the Agreement is hereby deleted in its entirety and the
following shall be put in its place and stead:
12. SEVERANCE.
(a) Termination Without Cause; Constructive Termination. Except as
provided in Section 12(b), in the event EMPLOYEE is terminated without
cause, or in the event any of the following events occur without
EMPLOYEE'S consent: (i) EMPLOYEE is relocated; (ii) EMPLOYEE'S overall
compensation package (including but not limited to salary, bonus,
commission structure, fringe benefits, perquisites, and vacation time)
is detrimentally changed or modified other than in connection with a
general change in compensation for all ESI employees or for all ESI
employees in any group or classification that includes EMPLOYEE
(provided that any reduction in compensation is made as a result of a
decline in ESI's economic conditions, is temporary, and is no greater
than twenty percent (20%) of Base Salary); or (iii) EMPLOYEE'S position
within ESI (including EMPLOYEE'S officer status with ESI or its
parent), or any of the duties, responsibilities or requirements of
EMPLOYEE'S position, are substantially changed or modified, THEN
EMPLOYEE shall be entitled to receive the following: (A) an amount
equal to six (6) months of Base Salary at EMPLOYEE'S then current Base
Salary; (B) $3,000.00 in lieu of fringe benefits; (C) all salary,
vacation time and other benefits earned and accrued to the date of
termination; and (D) a pro rata bonus for the year in which termination
occurs assuming the EMPLOYEE would have received a bonus. In order to
receive the severance payment under this Section 12(a), EMPLOYEE must
execute a mutually agreeable form of "Release of All Employment
Claims." Participation in all stock option plans, stock purchase plans,
and other company personnel benefits shall cease on the EMPLOYEE'S date
of termination, subject to the specific provisions of option agreements
or plans that may extend EMPLOYEE'S rights beyond the date of
termination.
(b) Change in Control. Notwithstanding the foregoing, if within 12
months following a Change in Control, EMPLOYEE is terminated for any
reason other than for cause or any of the following events occur
without EMPLOYEE'S consent: (i) EMPLOYEE is relocated; (ii) any
component of EMPLOYEE'S compensation package (including but not limited
to salary, bonus, commission structure, fringe benefits, perquisites,
and vacation time) is detrimentally changed or modified; or (iii)
EMPLOYEE'S position within the surviving entity, or any of the duties,
responsibilities or requirements of EMPLOYEE'S position, are changed or
modified in relation to EMPLOYEE'S position within ESI (including
EMPLOYEE'S officer status with ESI or its parent), THEN EMPLOYEE shall
be entitled to receive the following: (A) an amount equal to twelve
(12) months of Base Salary at EMPLOYEE'S then current Base Salary; (B)
$6,000 in lieu of fringe benefits; (C) all salary, vacation time and
other benefits earned and accrued to the date of termination; and (D) a
pro rata bonus for the year in which termination occurs assuming the
EMPLOYEE would have received a bonus. In order to receive the severance
payment under this Section 12(b), EMPLOYEE must execute a mutually
agreeable form of "Release of All Employment Claims." Furthermore, all
unvested ESI stock options held by EMPLOYEE shall automatically vest
upon termination (or the occurrence of an event described in Sections
12(b)(i)-(iii)) and, on or before the ninetieth (90th) day following
termination (or the triggering event, as the case may be), EMPLOYEE
shall have the option, exercisable by delivery of written notice of
exercise to ESI or its successor, of converting any incentive stock
options into nonqualified stock options with an exercise period
extending until the earliest of twenty-four (24) months following such
date, or the expiration date of such option.
For purposes of this Agreement, a "Change In Control" shall mean the
occurrence of any of the following events:
(x) A third "person," including a "group," but excluding an
existing stockholder of ESI who is the "beneficial owner" (as
these terms are defined in or for the purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended, and as in
effect on the date hereof) of more than 20% of the total number
of votes that may be cast for the election of directors of ESI,
(A) becomes the beneficial owner of shares of ESI having more
than 50% of the total number of votes that may be cast for the
election of directors of ESI, or (B) otherwise is able to
appoint, designate or control, by proxy, agreement or otherwise,
a majority of the directors of ESI;
(y) The merger or consolidation of ESI with or into any other
corporation or entity or the merger or consolidation of any other
corporation or entity into or with ESI, in which case those
persons who are stockholders of ESI immediately prior to such
merger or consolidation do not receive, as a result of such
merger or consolidation, more than 50% in voting power of the
outstanding capital stock of the surviving corporation; or
(z) Any sale or transfer in a single transaction or series of
related transactions of more than 50% of fair market value of
ESI's assets.
Notwithstanding the above, ESI and EMPLOYEE acknowledge that this
Section 12(b) shall be triggered and EMPLOYEE shall be entitled to
severance thereunder if after execution of a definitive agreement but
prior to the actual closing of a Change in Control, EMPLOYEE is
terminated in relation to the Change in Control.
(d) Payments. Severance payments may be paid in one lump sum or in
installments at the option of EMPLOYEE.
(e) Excess Parachute Payments. If any portion of the payments or
benefits under this Agreement or any other agreement or benefit plan of
the Company (including stock options) would be characterized as an
"excess parachute payment" to the Employee under Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), the Employee
shall be paid any excise tax that the Employee owes under Section 4999
of the Code as a result of such characterization, such excise tax to be
paid to the Employee at least ten (10) days prior to the date that he
or she is obligated to make the excise tax payment. The determination
of whether and to what extent any payments or benefits would be "excess
parachute payments" and the date by which any excise tax shall be due,
shall be determined by recognized tax counsel selected by ESI and
reasonably acceptable to the Employee.
3. Except as specifically set forth herein, the Agreement shall remain
in full force and effect. This Amendment shall be governed in all respects by
the internal laws of the state of Idaho (without regard to its conflicts of laws
principles). This Amendment may be executed in counterparts, each of which shall
be an original and all of which together shall constitute the same document.
This Amendment shall be binding upon, and inure to the benefit of, the parties
and their respective permitted successors and assigns.
Very truly yours,
Extended Systems of Idaho, Incorporated
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Its: President and CEO
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Accepted and Approved By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Employee
Dated: 9/4/03
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