EX-10.3








    Exhibit 10.3



 


	 	 	 
	
 
	
 
	
    August 12, 2008










    Mr. Philip L. Rugani




    459 Old Woods Roads East




    Wyckoff, New Jersey 07481



 


 



    RE: Amendment to Offer of Employment Letter



 



    Dear Phil:



 



    You and AXS-One Inc. agree that, in light of changes to the law
    concerning severance and deferred compensation, including
    Internal Revenue Code Section 409A and related Treasury
    Regulations, it is in our mutual best interest to amend your
    offer of employment letter from the Company, dated
    September 4, 2007, (the “Offer Letter”) as
    follows:



 



    1.  The section of the Offer Letter entitled
    “Bonus” is hereby amended by the addition of the
    following at the end thereof:



 



    “Any bonus payable by the Company shall be paid by no later
    than the
    15th day
    of the third month following the end of the calendar year in
    which the right to the bonus is no longer subject to a
    substantial risk of forfeiture (as defined for purposes of Code
    Section 409A, including Treasury Regulations
    Section 1.409A-1(d)).”



 



    2.  The first two sentences of the section of the
    Offer Letter entitled “Severance Package” are deleted
    and the following substituted therefor:



 



    “Severance Package: If the Company terminates your
    employment for any reason other than Cause and under
    circumstances constituting an Involuntary Separation from
    Service within the meaning of Treasury
    Regulation Section 1.409A-1(n),
    and such termination is not on or within 12 months
    following a Change of Control, the Company will pay you a
    separation pay benefit (the “Severance Payments”)
    equal to three months of your annual rate of base salary (as of
    your Separation from Service date) and will make available a
    subsidized healthcare benefit, as described below.



 



    (i) Payment of the Severance Payments shall commence as of
    your Separation from Service date, and shall continue thereafter
    in equal fixed installments over a three month period in
    accordance with the Company’s standard payroll procedures
    and normal payroll dates then in effect. Notwithstanding the
    foregoing, no Severance Payments shall be paid during the
    30 days immediately following your Separation from Service
    date; any Severance Payments that would have otherwise been paid
    during such 30 day period shall be withheld and paid on the
    31st day
    following your Separation from Service, without adjustment for
    the delay in payment.



 



    (ii) In the event the value of the Severance Payments shall
    exceed two times the lesser of your annualized compensation or
    the maximum amount that may be taken into account for qualified
    plan purposes (in each case, as determined in accordance with
    Treasury Regulation
    Section 1.409A-1(b)(9)(iii)(A)),
    the excess shall not be paid as provided in (i), above, but
    instead shall be withheld and paid on the first regularly
    scheduled payroll date immediately following the date that is
    six months after your Separation from Service date, without
    adjustment for the delay in payment.



 



    (iii) In no event shall Severance Payments be accelerated,
    nor shall you be eligible to defer payment of Severance Payments
    to a later date.



 



    (iv) If COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to you for the period of the COBRA coverage
    or three months, whichever is shorter.”













 






    3.  The first paragraph of the section of the Offer
    Letter entitled “Change of Control” is deleted and the
    following substituted therefor:



 



    “Change of Control: In the event of a termination of
    your employment hereunder by the Company without Cause or by you
    for Good Reason (as defined below) and, in either case, under
    circumstances constituting an Involuntary Separation from
    Service within the meaning of Treasury
    Regulation Section 1.409A-1(n)
    on or within 12 months following a Change of Control, the
    Company will pay you any earned but unpaid salary and any
    unreimbursed business expenses, plus a Change in Control
    Severance Benefit equal to one-half of your annual rate of base
    salary (as of your Separation from Service date). The Change in
    Control Severance Benefit shall be paid on the
    30th day
    following your Separation from Service date, in a lump sum. In
    addition, if COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to you for the period of the COBRA coverage
    or six months, whichever is shorter.”



 



    4.  The third paragraph of the section of the Offer
    Letter entitled “Change of Control” is deleted and the
    following substituted therefor:



 



    “Termination for Good Reason means a resignation of
    employment and Separation from Service (as defined for purposes
    of Code Section 409A) within 180 days following the
    initial existence of one or more of the following conditions
    arising without your consent:



 



    (i) a material reduction in your base salary or benefits,
    other than an across-the-board reduction affecting all members
    of senior management;



 



    (ii) a material reduction in your duties and significant
    responsibilities hereunder (not including reasonable changes in
    title or in corporate structure); or



 



    (iii) the Company requires you to change the location of
    your principal office, so that you will be based at a location
    more than 50 miles from the Company’s current
    executive offices located at 301 Route 17 North,
    Rutherford, New Jersey 07070;



 



    provided, in any such case, that (1) a prior written notice
    specifying the reasons within ninety (90) after the initial
    existence of the condition and an opportunity to cure such
    condition (if curable) shall be afforded the Company, and
    (2) “Good Reason” shall exist only if the Company
    shall fail to cure such condition within 31 days after its
    receipt of such prior written notice. In addition, until the
    actual Separation from Service you must remain willing and able
    to continue to perform services in accordance with the terms of
    this Offer Letter and you must not be in breach of any of your
    obligations to the Company.”



 



    5.  A new section is hereby added to the Offer Letter
    after the section entitled “Benefits” and before the
    section entitled “Covenant Not to Compete” to read as
    follows:



 



    “Code Section 409A Compliance: Certain
    compensation that you may become entitled to in connection with
    your employment with the Company may be affected by
    Section 409A of the Internal Revenue Code and guidance
    issued thereunder. The parties hereto intend that this Offer
    Letter, as amended, be consistent with IRS Notice
    2007-78, IRS
    Notice
    2007-86 and
    other Code Section 409A transition relief, and it shall be
    interpreted accordingly. Notwithstanding anything herein to the
    contrary, it is expressly understood that at any time the
    Company (or any related employer treated with the Company as the
    service recipient for purposes of Code Section 409A) is publicly
    traded on an established securities market (as defined for
    purposes of Code Section 409A), if a payment or provision
    of an amount or benefit constituting a deferral of compensation
    is to be made to you on account of a Separation from Service at
    a time when you are a Specified Employee (as defined for
    purposes of Code Section 409A(a)(2)(B)(i)), such deferred
    compensation shall not be paid to you prior to the date that is
    six (6) months after the Separation from Service or as
    otherwise permitted under Treasury Regulations
    Section 1.409A-3(i)(2).”













 





 



    6.  Exhibit A of the Offer Letter is amended by
    deleting the last sentence of the first paragraph thereof and
    substituting the following therefor:



 



    “In the event that Company Payments must be reduced, Change
    of Control Severance Payments shall be reduced to the extent
    necessary.”



 



    Except as expressly amended herein, all provisions of the Offer
    Letter remain in full force and effect.



 



    If you concur with all of the above, please indicate your
    agreement by signing and dating a copy of this letter in the
    spaces indicated below.



 



    Sincerely,



 



    AXS-One, Inc.



 


			
	 	    By: 
	
    /s/  William
    P. Lyons









    William P. Lyons




    Chief Executive Officer




    AXS-One Inc.



 



    Acknowledged and Accepted:



 


			
	     
	
    /s/  Philip
    L. Rugani

	 







    PHILIP L. RUGANI



 



    Date: August 12, 2008