Nothingshall be payable under this provision (other than accrued wages) unless and untilafter the effective date of a release that Executive executes in favor of theCompany that is satisfactory to Executive and the Company and which must beexecuted within 45 days of the Executive’s termination of employment. In the eventof a termination pursuant to Section 4.2, except for a termination for disability,all restrictions on the Restricted Stock shall lapse as of the date of termination.In the event of a termination for disability, no further restrictions shall lapseas to the Restricted Stock”     3. Section 4.3 is amended by adding the following phrase at the end thereof:“, which release shall be executed within forty-five (45) days of Executive’stermination of employment.”     4. Section 4.4 is deleted in its entirety.     5. Section 4.7 is amended in its entirety to read as follows:“4.7 Section 409A of the Code. In any case, a Change of Control must alsoat least meet the requirements of a change in ownership or effective control of theCompany in accordance with Section 409A(a)(2)(A)(v) of the Code and the applicableprovisions of Treasury Regulations § 1.409A-3(i)(5).”     6. Section 4.8(d) is amended by adding the term “material” in subsection (d) before the term“reduction.”     7. Section 4.8 is amended by adding the following subsection at the end thereof:“4.8(g) For purposes of this Agreement, Good Reason must also meet the requirementsfor a good reason termination in accordance with Treasury Regulation§1.409A-1(n)(2), and any successor statute, regulation and guidance thereto.”     8. Section 4.9(b) is amended by adding the following sentence at the end thereof:“Any Gross-Up Payment shall be paid to Executive, or for his benefit, within 30days of the determination that the Excise Tax is applicable and, in any case,within the period prescribed under and in accordance with Treasury Regulation §1.409A-3(i)(1)(v).”     9. The following new Section 12 shall be added to the EmploymentAgreement:
 

 
“Section 12 Compliance with Section 409A of the Code     12.1 Any applicable reimbursement or direct payment of Executive’s expensessubject to Section 409A of the Code, including, without limitation, under Section2.5 herein, shall be made no later than the end of the calendar year following thecalendar year in which such expense is incurred by the Executive. Any reimbursementor right to direct payment of Executive’s expense in one calendar year shall notaffect the amount that may be reimbursed or paid for in any other calendar year anda reimbursement or payment of Executive’s expense (or right thereto) may not beexchanged or liquidated for another benefit or payment.     12.2 Notwithstanding any other provision of this Agreement to the contrary, ifany amount (including imputed income) to be paid to Executive pursuant to thisAgreement as a result of Executive’s termination of employment is “deferredcompensation” subject to Section 409A of the Code, and if the Executive is a“Specified Employee” (as defined under Section 409A of the Code) as of the date ofExecutive’s termination of employment hereunder, then, to the extent necessary toavoid the imposition of excise taxes or other penalties under Section 409A of theCode, the payment of benefits, if any, scheduled to be paid by the Employer toExecutive hereunder during the first six (6) month period following the date of atermination of employment hereunder shall not be paid until the date which is thefirst business day after six (6) months have elapsed since the Executive’stermination of employment for any reason other than death. Any deferredcompensation payments delayed in accordance with the terms of this Section 12.2shall be paid in a lump sum when paid and any other payments not otherwise delayedhereunder will be paid in accordance with the applicable regular schedule.     12.3 Notwithstanding any other provision of this Agreement, if any of thebenefits set forth in this Agreement are deferred compensation under Section 409Aof the Code, any termination of employment or disability triggering payment of suchbenefits must constitute a “separation from service” or “disability”, respectively,under Section 409A of the Code before, subject to Section 12.2 of this Agreement,distribution of such benefits can commence. For purposes of clarification, thisparagraph shall not cause any forfeiture of benefits on the part of the Executive,but shall only act as a delay until such time as a “separation from service” or“disability” occurs.     12.4 Notwithstanding any other provision of this Agreement to the contrary,the Agreement shall be interpreted and at all timesadministered in a manner that avoids the inclusion of compensation in income underSection 409A(a)(1) of the Code.”
 

 
     10. The Agreement, in all other respects, is hereby ratified and reaffirmed.     IN WITNESS WHEREOF, each of the parties has caused this First Amendment to be executed as ofthe date first written above.   Executive: Employer: /s/ Gui Karyo /s/ Jesse Sutton   Gui Karyo Majesco Entertainment Company